Senate report leaves NFPs in limbo

The not-for-profit (NFP) sector remains in limbo after a senate committee report failed to break the deadlock between the government and other parties over the future of the charity regulator, the Australian Charities and Not-for-profit Commission (ACNC).

A Bill to repeal the ACNC was referred to the Senate Economics Legislation Committee after it was introduced in the House of Representatives in March. The committee received 155 submissions, with more than 80 per cent of these opposing the ACNC’s abolition.

However, the committee’s majority report was tabled last week recommending that the Bill to abolish the ACNC be passed by the Senate. In contrast, two dissenting minority reports (from the Labor Party and the Greens) called for the continuation of the ACNC.

In their dissenting report, Labor Senators Mark Bishop and Louise Pratt say they found the evidence in favour of retaining the ACNC compelling — not only because of the sheer numbers of charities and other organisations that strongly supported the work of the ACNC, but because of the soundness of their arguments.

Liberal Senator and chairman of the Senate Committee David Bushby said the committee had formed the view that the abolition of the ACNC would, as intended, relieve the regulatory burden from many charities.

The Greens’ dissenting report was also  in favour of keeping the ACNC.

"The government's recklessness on this issue has been highlighted during the inquiry, as we have established that only ‘informal consultations' have been undertaken and that no replacement model for the ACNC has been outlined yet,” says Senator Rachel Siewert, Greens spokesperson on family and community services.

“It would be irresponsible to the sector and the community to repeal a popular and effective regulator without any viable alternative having been proposed.”

In its submission to the inquiry, the Australian Institute of Company Directors noted that it could not support the abolition of the ACNC until the government released sufficient detail on its proposed alternative model of regulation.

Meanwhile, Minister for Social Services Kevin Andrews has asked the Centre for Social Impact (CSI) to advise the government on the best models for establishing the new National Centre for Excellence (NCE) to replace the ACNC. The CSI will deliver an interim report in July, based on its research and consultations, and a final report in early September.

The CSI has launched an online survey on its website at www.civilsocietycentre.org.au and has invited all interested parties in the sector to participate. It will also conduct focus groups, interviews, workshops and a second online survey before it completes its final report.

In the past, Andrews has revealed the government’s desire to replace the ACNC with a charity evaluator model based on the US-based Charity Navigator, which provides free ratings of the finances, transparency and accountability of NFPs. This would mean that the regulation of charities would be returned to the Australian Securities and Investments Commission and the Australian Taxation Office.

In the meantime, ACNC Commissioner Susan Pascoe says the agency will continue to perform its duties until future arrangements are known. She also reminds charities that they are still obliged to meet the immediate reporting requirement to submit their Annual Information Statement which is due by 30 June.