This year the Charities Act, championed by federal Labor, will modernise our country’s definition of charity. Social services minister Kevin Andrews’ efforts to halt it should be scrutinised
The Abbott government has so far been in the business of looking in the rear view mirror rather than ahead. On everything from the national school curriculum to mining taxation and emissions trading, this is a government which is busy undoing, rather than doing. Another reform the Coalition has recently tried to sneakily unpick is Labor’s reforms to bring Australian charities law into the modern age.
People have always grappled with the meaning of charity and the practice of it. The concept – taken from the Latin and Greek to mean “unlimited loving-kindness to all others” – was linked to hope and faith by the Apostle Paul in the first century; it is also one of the five pillars of Islam. Philosophers and the laity have long tussled with what it means to be charitable; a common image of the practice of charity is of grey soup kitchens in the Dickensian era offering emergency relief for those beaten by hunger. But that image is now dated.
Australian governments have also had to grapple with the meaning of charity, because generous tax concessions are applied to organisations deemed to do charitable work. To decide which ones are eligible, governments in the past have relied on 400 years of case law to define a charity. It has resulted in confusion and costly court cases aimed at getting clarity about the meaning of modern-day charity and charitable purpose.
From the start of this year the Charities Act, championed by federal Labor, came into effect to change all that. It sets out in statute, a historic and uniform definition of “charity” to avoid the ambiguity of the past and to recognise the diversity and vibrancy of a sector that employs more than a million people. It is a sensible development, and the result of years of genuine consultation. Governments, regulators and the broader community will find it easier to define when a charity is a charity and when it is not. The Charities Act clarifies that to be a recognised as a charity, an organisation must be not-for-profit, have only charitable purposes that are for the public benefit, not have a disqualifying purpose and not be an individual, a political party or a government agency.
Modern Australian charities see the need and the cause, and so seek to build capacity and change systems that create disadvantage. The Act restates the existing (judge-made) law in plain English and also recognises charitable purposes such as the protection of human rights, the promotion of reconciliation and tolerance, and by recognising that many modern charities advance causes by preventing, educating, researching and raising awareness. In consultations, many charitable organisations have welcomed the Act’s broad support of advocacy.
Organisations that promote philanthropy say the reform will generate a new era of strong growth for charitable giving in Australia. The money foundations spend on legal advice to work out what they can legitimately fund can now be better spent on organisations doing good and lasting work, including action for the environment and human rights.
The reform also resolves a number of anomalies which stymied particular charities. For instance, the deﬁnition of disaster relief has been expanded to enable charities to go beyond the relief of individual distress after a disaster, by including rebuilding, repairing or securing not-for-proﬁt community assets after a disaster. The legislation retains the flexibility inherent in the common law that enables the courts, as well as parliament, to continue to develop and extend the definition to other charitable purposes judged beneficial to Australians over time.
Disappointingly, last year social services minister Kevin Andrews hurriedly sought, without consultation, to delay the introduction of the Charities Act until September 2014, stealthily inserting an amendment to an omnibus bill that would have scuttled the change were it not for the Opposition and minor parties in the Senate.
The sector fought hard for the Charities Bill 2013 and was conceivably alarmed that Andrews sought to delay the new definition and keep charities stuck in the 17th century. During a committee hearing late last year World Vision Australia CEO and Community Council of Australia chair Tim Costello gave evidence that the sector was very surprised by the government’s attempt to take Australian charities back four centuries. “This new definition is extraordinarily important for all of us. With the consultations and over 200 submissions made, I have not heard of anyone in the sector who was troubled by this definition,” Costello said.
And yet the reform is not out of trouble. Andrews may well seek to again scrap or amend the charity definition when the new Senate is in place after 1 July 2014. Perhaps this shouldn’t surprise us, given his determination to abolish many Australian charities amid a raft of repeals (environment advocacy charities especially appear to be in his sights).
We hope the government does not take us back to Howard-era gag clauses. Andrews appears deaf to the sector’s aspirations and hopes of making a difference with a regulatory framework that supports them.