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Government endorses changes to charity and not-for-profit laws
The Morrison government has supported recommendations that would overhaul laws for charities and not-for-profits and give the charity body discretion to disclose issues.
Naomi Neilson
The government has responded to a legislative review by the Australian Charities and Not-for-profits Commission (ACNC), which was released by the charities minister Zed Seselja on Friday. The responses will mean a renovation of current charity legislation.
The government will put in place reforms that will reduce the red tape around charities and not-for-profits (NFP), improve transparency and ensure the ACNC upholds its duty as a regulator. Part of the changes will mean the commissioner, The Honourable Gary Johns, can disclose to the public and media what investigations charities are under.
At the time of writing, the ACNC can publicise when it revokes a charity’s registration, but current legislation means it cannot tell the public the reasons for the decision.
In addition, the government has planned to lessen the compliance burden on smaller charities by reducing the financial reporting and increasing reporting thresholds. It will also ban those who are convicted of fraud, terrorism financing or child sex abuse from serving on charity or NFP boards following their convictions.
“While proven instances of criminal misconduct in the sector remain low, illicit activity could severely damage public trust and confidence in the sector,” noted the response from the government. “This recommendation will enhance the accountability of these responsible persons, thereby reducing risk of charities becoming involved.”
The government will not support a recommendation that test funding should be made available to develop the law in matters of public interest, including for any disqualifying processes. The response said the government will instead be exploring the legislative options “to address the uncertainty [around charity and NFP] law”.
The government was also hesitant to accept that the Australian Consumer Law (ACL) should be amended to clarify its application to charitable and not-for-profit fundraising and a mandatory code of conduct implemented for fundraising activities.
“The ACL is not an appropriate mechanism to harmonise laws in the NFP sector. The ACL provides broad, economy-wide protections, including against any misleading and disruptive conduct,” the Morrison government noted in its review.
It added that ACL is not designed to impose detailed licensing, reporting and conduct requirements in specified sectors, which in the case of the fundraisers include matters such as hours and location of collectors. It said that by repealing the state fundraising legislation and relying on the ACL’s broad protections “could leave regulatory gaps”.
“The ACL does not provide a mechanism for a code of conduct. Amending the ACL to provide for a code would require the agreement of the states and territories and have significant changes to state and territory legislation,” wrote the government.
“It is unclear how such a process would achieve a faster reduction in red tape than the harmonisation of state and territory laws.”
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
