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Charities & Not-For-Profits Law in Australia

Abolition of the ACNC Takes Shape

Posted in Compliance, General, Governance

AbolishmentThe Coalition Government has stated that it will seek to abolish the ACNC along with more than 8000 federal laws on 19 March as part of its plan to reduce red tape. This confirms the Government’s pre-election commitment to abolish the ACNC.

Although Minister Andrews has said that the ACNC would be replaced by a National Centre for Excellence “as a fount of both innovation and advocacy” there is still much uncertainty regarding the scope and operation of this Centre. Minister Kevin Andrews has suggested that an evaluation model based on the US Charity Navigator could replace the educative and registry functions of the ACNC. This model is best known for its comparative lists of charities such as 10 super-sized charities, 10 consistently low rated charities, 10 charities overpaying their fundraisers and so on. Much debate regarding the merits of a system which ranks charities has followed and without further clarity regarding the Centre’s objectives, purpose and scope to collect data such a proposal is difficult to assess.

Minister Andrews has said that he hoped to have the proposed National Centre for Excellence up and running by early next financial year.

With the educative and information functions intended to be handled by the Centre for Excellence, it is understood that the regulatory functions of the ACNC are likely to be transferred back to the ATO.

However, the ATO has told the Senate Estimate hearing that it would need additional resources if it was to take on the charity regulator role. Despite the need for additional staff to handle charity regulation, 500 ATO staff have already been offered voluntary redundancies with up to 900 staff to receive redundancies by the end of the financial year. These redundancies include offers to staff at the ACNC who are employed by the ATO.

In order for the ACNC to be unwound and for a new Centre of Excellence to be established, the Government intends to introduce legislation to Federal Parliament in the coming week, however, as foreshadowed in our earlier blog, it is not certain whether the unwinding of the ACNC will pass through the Senate, which is not controlled by the Coalition Government.

The Future of the Charities Act

The future of the Charities Act also remains unclear.

On 5 March 2014 Senator Fifield withdrew the Government’s proposal to delay the start of the Charities Act and said “the measure is obviously no longer appropriate because the 1 January commencement date has now passed and the Act is in operation”. The Federal Opposition touted the withdrawal as a success with Acting Shadow Assistant Treasurer Ed Husic saying “the Charities Act is safe, for now”.

However, it is likely that the Government will seek to repeal the Act and the Federal Opposition has noted that it will need to work with the sector to pressure the Government in order to keep the definition.

What’s next?

We will continue to keep you informed of updates, however until the ACNC is abolished, charities will need to continue to comply with all requirements, including lodgement of their Annual Information Statements.

More information

If you would like to discuss any of the above please contact Bill d’Apice or Anna Lewis of this office.