A novacastrian argument for the charities commission

In the Newcastle Herald, I have an op-ed on the importance of the charities commission
Charities commission is a vital public safeguard, Newcastle Herald, 22 April 2014

Australians are generous people. We donate millions of dollars to charities we trust each year. Many of us volunteer our time for charitable work with organisations at the heart of our communities. As World Vision CEO Tim Costello puts it: ‘‘The charity sector isn’t just a few amateurs with goodwill.’’

So it may come as a surprise that until very recently Australia did not have an independent charities regulator, monitoring and supporting the activities of thousands of charities and not-for-profit organisations.

In 2012, the former Labor government introduced the Australian Charities and Not-for-Profits Commission. The creation of the commission followed a report from the Productivity Commission, and was broadly welcomed by the sector, with which Labor consulted closely. The commission determines the legal status of groups seeking special tax treatment on behalf of the Commonwealth. It ensures charities comply with the law and that they do not rip donors off. To protect yourself against scammers, you can check a charity’s credentials on the website (acnc.gov.au).

In the Newcastle CBD alone, there are 77 registered charities with information on the commission’s website.

The commission helps provide public accountability, which is essential given the millions of dollars in tax concessions charities receive each year.

Importantly it cuts red tape. It is administering a Charity Passport underpinned by a ‘‘report-once, use-often’’ reporting framework. Charities that work with different government departments and fund-raise across the states will find that their reporting is simplified. That means charities in Newcastle can expect to spend less time on paperwork, and more time in the community.

Despite its obvious benefits to charities and the wider public, the Abbott government intends on scrapping the commission.  It hasn’t provided good reasons for the change, nor has it explained what will replace it.

The government is heeding only a very small minority of critics of the commission. According to a recent survey, four out of five charities support the work it is doing.

More than 40 charities, including the RSPCA, Lifeline and the Hillsong Church, have signed an open letter asking the Prime Minister to keep the commission. They say it underpins the consumer benefit to charities. Carolyn Kitto, of anti-slavery charity Stop the Traffik, calls it ‘‘a dream come true for small charities’’, saying that it cut the red tape dramatically for her organisation.

On the hustings, we hear the government claiming to be cutting red tape. Yet scrapping the commission means abolishing its red tape reduction directorate – the very people in charge of reducing regulatory burdens on the charitable sector.

As the Community Council of Australia has warned, abolishing the commission would be a sign that the government is not interested in the views of the charity sector. It would harm charities, which will lose visibility and governance support. And it would be bad for the public who will be more exposed to fraud and scams.

This month visiting charity regulators and experts from around the world praised Australia’s national charity regulator for its positive reputation and high compliance rates. They rejected Social Services Minister Kevin Andrews’s view that it is heavy-handed. Kenneth Dibble, the chief legal officer with the UK Charities Commission, said the commission is ‘‘flexible and sensitive to its constituency’s needs in a way that allows the sector to thrive. In such a short time the ACNC has commanded such respect from the sector.”

The chief executive of the Scottish Charity Regulator, David Robb, also praised the commission while reflecting on the difference his national regulator has made in Scotland. “We had some high-profile scandals where significant amounts were misappropriated. The Scottish Parliament was persuaded to act.  It was a big step forward. Now basic information is provided to the public and charities appreciate that the regulator understands their business and offers advice sensitive to their situation.” When the Scottish agency was introduced in 2005, moving charities regulation from the revenue office as Australia has, some people “grumbled initially” but then it won widespread favour.

Mr Andrews has not ruled out returning Australian charities to the defacto regulator, the Australian Tax Office. When asked if they supported the move, just 6 percent of charities said yes.

The government has no real plan for this country’s charities. It pretends to consult but will not listen to the sector that helps some of our most vulnerable people.

Andrew Leigh is federal Shadow Assistant Treasurer.

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