What's killing the charities regulator?

31 March 2014

In the 20 years before the Productivity Commission started its work on the not for profit (NFP) sector, there was a near unanimous call from sector leaders for a single national regulator. The Industry Commission took note of the sector's concerns, and its support led to the Australian Charities and Not-for-profits Commission (ACNC), which the current Federal Government is now moving to abolish.

Charities wanted more so-called red tape because it would help to establish themselves on a more professional and protected footing, even though many had operated successfully for more than a century. The changes would include increased transparency and better accounting, and would lead to greater public trust.

In the midst of the current government's move to repeal the ACNC legislation, it's worth remembering that the analysis and consultation carried out by the Productivity Commission between 2008 and 2010 was rigorous. The Commission's report distilled many of the findings of the previous 20 years. In particular, these highlighted that the impact of Australian NFPs was being systematically hampered by the lack of a single, national regulator.

This was followed by an extensive Treasury consultation with the sector and two parliamentary inquiries before the process of consultation linked to draft legislation was pursued by the former government.

The NFP sector is diverse, and it's not surprising that there are contrasting views on the value of the ACNC. Melbourne Catholic Education executive director Stephen Elder sees it as an extra layer of red tape that takes attention away from funding and delivery of services. But St Vincent de Paul CEO John Falzon believes it is a 'move towards a more supportive and less burdensome regulatory system'.

Catholic Health Australia CEO Martin Laverty and the Catholic Bishops' General Secretary Fr Brian Lucas favour compromise. Lucas recognises the necessary expertise in charity law offered by the ACNC but is worried that the construction of a 'league tables' style public portal containing financial data is open to simplistic and misleading interpretation, particularly by the media. He told Eureka Street: 'Transparency is mediated, which is the problem. The public doesn't get the full picture.'

While it is not surprising to see such a variety of views across such an exceptionally diverse sector, there has rarely been such an extensive period of consultation and legislative in Australian history. Caritas Australia CEO Paul O'Callaghan has had extensive experience with a number of NFPs. He told Eureka Street that three independent surveys conducted

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What's killing the charities regulator?

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