Australian charities are being obstructed by red tape because of inconsistency and duplication between state and federal regulators.
Shadow Assistant Treasurer, Andrew Leigh, called for charity regulation to be standardised between state and federal governments:
“There is real momentum among state governments and stakeholders to reform and streamline regulations for Australia’s charities and not-for-profit organisations in 2017”.
“Unfortunately, the [Federal] Government has no plan to assist operators within this key area of social policy.”
A 2016 report by the Australian Charities and Not-for-Profits Commission (ACNC) found that legislative inconsistencies, primarily in the areas of fundraising, incorporated association laws and state tax concession administration, cost the sector $34.9 million in red tape every year. However, a further $13.6 million could be saved by abolishing the ACNC itself.
The ACNC was created in 2012 to “help charities understand and meet their obligations through information, guidance, advice and other support”, but in reality it simply creates more red tape that charities have to comply with.
Charities are forced to register with the ACNC in order to be eligible for tax concessions, and then must submit an “Annual Information Statement” to the ACNC, providing information regarding their operations and finances. Failure to do this can result not only in a charity being fined up to $4,260, but with its tax concession status being revoked.
The ACNC had been targeted for abolition by the Abbott Government as part of its red tape reduction policy. However, efforts gradually stalled, and in 2016 the successive Turnbull Government formally reversed this position and endorsed the ACNC.
On the creation of the ACNC, IPA Research Fellow Peter Gregory stated:
“The ACNC is one of the worst examples of government involving itself where it is not needed or wanted.”
“Far from making things easier for charities, the ACNC will make things harder and more expensive.”
The IPA calls for reducing red tape on charities, particularly through the abolition of the ACNC. Charities and volunteerism are defining features of Australia’s culture of generosity, and should be valued and encouraged, not undermined by bureaucracy.