In 2012, federal legislation was passed to establish Australia's first national regulator for charities and not-for-profit organisations (NFPs): the Australian Charities and Not-For-Profit Commission (ACNC). Five years after its establishment, the Government are required to undertake a review of the ACNC and its associated legislation.
This Review is taking place against a backdrop of numerous challenges for sector, including a concerted push by the Government to impose more red tape on organisations that speak out publicly on matters affecting the communities they serve. At the same time, the ACNC's new Commissioner has proposed expanding the scope of the ACNC's activities to focus on 'efficiency' and harnessing market forces to create a ‘donor market’, including publishing financial metrics to enable donors to compare the performance of NFPs.
Such changes would have significant implications. The outcomes of this Review – together with the fate of several legislative proposals before Federal Parliament – could fundamentally shift the operating environment for the sector, diminish our role in public policy debate, and stifle charity voices on issues important to our mission and the communities we serve.
As a national charity operating in every state and territory, the Society strongly supports an independent national charity regulator that can reduce unwieldy and unnecessary red tape, while at the same time maintaining probity and public trust in the sector. We supported the formation of the ACNC and believe it has achieved much in its first five years.
Our submission highlights both the strengths and ongoing challenges for the ACNC. Fundamentally, we view the Review as an opportunity to tweak and improve the ACNC – not to make wholesale change. While there are some areas and activities which could be strengthened, we caution against changes that would fundamentally alter the role of the ACNC or its enabling legislation. Key issues highlighted in our submission include:
- Maintaining the current objects of the ACNC Act - the current objects (which are based on supporting the sector, promoting confidence in the sector and its work, and reducing the regulatory burden on charities) were developed through extensive consultation with the sector and remain essential and relevant. Broadening the objects would serve no useful purpose and would dilute the focus of the ACNC.
- Preserving the independence of charities and their capacity to advocate - advocacy is a legitimate and important means by which organisations fulfil their charitable purpose; laws and onerous administrative requirements should not be used to direct the activities of charities and suppress advocacy.
- Reducing red tape - while inroads have been, more needs to be done to harmonise laws and regulatory processes between the Commonwealth and states and territories, and between charity law and other laws at the Commonwealth level.
- Strengthen the independence of the ACNC - The independence of the regulator (both perceived and actual) is fundamental to its effective functioning and its credibility in the eyes of the general public and the sector it regulates. To strengthen the ACNC's independence, the process for appointing the Commissioner should be revised to ensure it is a merit-based, publicly transparent and independent selection process.
- Ensuring accountability frameworks are proportionate, fit-for-purpose and not misused. Transparency and accountability should be encouraged provided it is proportionate, effective and fair. We do not support additional accountability requirements which merely add to the compliance burden, without providing meaningful benefits or addressing a demonstrated need.