Rethink of abolition of the national charity regulator welcomed

Governance Institute welcomes  the new Federal Minister for Social Services Scott Morrison’s statement that he will not make abolishing the Australian Charities and Not-for-profits Commission (ACNC) a priority and confirms that the Institute will continue to campaign vigorously to secure the ACNC’s future.

“We’ve made it very clear from the onset that we do not support the repeal of the ACNC, so we are hopeful that this announcement is an encouraging sign that the government is living up to its new commitment to listen to and engage with stakeholders,” Governance Institute’s director policy, Ms Judith Fox says.

“The ACNC’s light-touch approach, its success in lifting accountability and governance standards and its significant contribution to education have finally given the charities sector much-needed visibility. Not only that, there is near-universal support for the ACNC within the sector.

Last year, the first comprehensive, evidence-based research of the charity sector, using information held on the ACNC’s Charities Register, revealed that it contributes significantly to the nation's GDP and employs more people than the mining, agriculture, forestry and fishing industries combined.

Charities employ nearly one million people across Australia, equating to eight per cent of Australia's workforce, and have a combined total income of more than $100 billion. Despite this vital contribution to the economy and society, the sector’s call for the retention of the ACNC — 85 per cent of the sector wanted to keep its regulator — was going unheeded.

“Moreover, this and other research has shown that Commonwealth funding acquittals are imposing a greater burden on charities than reporting obligations to the ACNC. The regulator is not causing the compliance burden,” Ms Fox noted.

The ACNC was the first step in establishing a one-stop shop, national regulatory framework for the sector and moving it away from the burdensome dual compliance regime where charities that are incorporated associations are subject to both state and federal regulation.

“Importantly, the governance information collected populates the Charities Register, which is at the heart of charity regulation. It provides a free, online, credible, searchable database on charities. The public and donors can — for the first time — identify bona fide charities by searching the Register. Having finally acquired this extraordinary resource on the charity sector, which can influence our understanding of its economic and social value, research, policy development and donor decisions, the loss of the Register would have meant that we’ll go back to being in the dark about charities.

“The government’s decision to step back from abolishing the ACNC is a move in the right direction,” Ms Fox concluded. “The sector has gained a reprieve after a long period of uncertainty and the focus can move to abolishing dual regulatory compliance with the states.”

For further information contact Viv Hardy at CallidusPR on (02) 9283 4113 or Judith Fox on (02) 9223 5744 or 0408 667 246.

About Governance Institute of Australia

The Governance Institute of Australia is the only independent professional association with a sole focus on the practice of governance. We provide the best education and support for practising chartered secretaries, governance advisers and risk managers to drive responsible performance in their organisations.

MR/2015/1

Note to editor

Curtin University partnered with the ACNC to analyse data on the Charities Register from the Annual Information Statements (AISs) of more than 38,000 registered charities in their first year of reporting to the ACNC. The Curtin Charities 2013 Report shows that:

  • charities employ nearly one million people across Australia
  • they manage around two million volunteers
  • the sector has a combined total income of more than $100 billion
  • the sector has grown by two per cent annually since 1990
  • 10 per cent of charities experience about 80 per cent of the total administrative burden
  • 10 per cent of charities accounted for 90 per cent of full-time jobs and nearly $90 billion of income in the sector
  • 75 per cent of small charities do not employ full-time staff.

The report also shows that the median time spent by charities in reporting to government was 40 hours a year, most of which was in relation to government funding agreements.

Another report commissioned by the ACNC was also released in 2014. The report, Research into Commonwealth Regulatory and Reporting Burdens on the Charity Sector, by Ernst & Young specifically examined the regulatory and reporting environment faced by charities and not-for-profit organisations, and found that Commonwealth funding agreement obligations are imposing a greater burden on charities than legislative obligations.

The Ernst & Young report shows that the average Commonwealth burden was $18,000 for small charities (charities with revenue less than $250,000 per annum) and $235,000 for large charities (charities with revenue over $1 million per annum). However, the report estimates that the average annual burden imposed by ACNC reporting obligations was $150, or 0.1 per cent of total annual burden, demonstrating that the ACNC is not the red tape problem.

About Governance Institute of Australia

Governance Institute of Australia is the only independent professional association with a sole focus on whole-of-organisation governance. Our education, support and networking opportunities for directors, company secretaries, governance professionals and risk managers are second to none. 

MR/2015/18

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