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Charities & Not-For-Profits Law in Australia

ACNC Bills: Inquiry Report issued

Posted in Compliance, General, Governance, Tax Exemptions & DGR Status

 

ACNC

Summary – The House Standing Committee on Economics has presented its Report on the Exposure Draft of the Australian Charities and Not-For-Profits Commission Exposure Draft Bills.

On 15 August 2012, after completing its Inquiry, the House of Representatives Standing Committee on Economics issued its report entitled “Report on the Exposure Draft of the Australian Charities and Not-For-Profits Commission Bills 2012”.

Subject to other recommendations in its report, the Committee recommended that the House of Representatives pass the Australian Charities and Not-For-Profits Bill 2012 (ACNC Bill) and the Australian Charities and Not-For-Profits Commission (Consequential and Transitional) Bill 2012.

The recommendations will now be presented to the House of Representatives.

It is worth noting in the current environment of a hung Parliament that the Liberal members of the Committee dissented from the majority view stating that the Bills in their current form “all serve as a threat to the strength and vibrancy of the Not-For-Profit sector going forward”.  The Liberal members recommend that the Bills not be supported in the House.

The amendments recommended by the Committee can be summarised as follows:

  • the objects of the ACNC Bill should explicitly include “the reduction of red tape”;
  • there should be an explanation of the meaning of “public trust and confidence” and an indication in the Explanatory Memorandum of how that expression might be interpreted;
  • the Guide to the ACNC Bill should reflect the educative and enabling role of the ACNC in supporting transparency and accountability;
  • existing or sector developed governance standards should be incorporated into the Bill through regulation in addition to the default set of governance standards;
  • the privacy of donors who wish to remain anonymous should be respected;
  • the obligations, liabilities and offences provisions should be re-drafted with a view to clarifying their intent and operation;
  • principles of natural justice should be incorporated into the Bill, including a written notice of intent and an opportunity to be heard before a decision is enforced to revoke registration or to suspend or remove responsible entities;
  • the legislation should provide for a review after it has been in operation for 5 years.

It is now expected that a fourth draft of the Bills will be prepared and submitted to the House – probably during the week commencing 20 August 2012.

It then remains to be seen whether the Bills will make it through both Houses of Parliament and, even if they do, whether that will occur before the intended commencement date of the ACNC on 1 October 2012.