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Sector welcomes ACNC review findings

By Matthew Schulz, journalist, Our Community

Thirty recommendations from a wide-ranging review into the operation of the Australian Charities and Not-for-profits Commission (ACNC) have been largely welcomed by the social sector following their release last month.

The Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislation Review was commissioned by the former minister for the sector, Michael Sukkar, with the review conducted by Patrick McClure, a respected figure in the fields of leadership, governance and reform in the sector.

The review - required under law every five years - aimed to ensure the ACNC acts were delivering "on their policy objectives" and not preventing the ACNC Commissioner, currently Gary Johns, from being able to conduct his work.

The report covered the following areas:

  • Objects, functions and powers
  • Regulatory framework
  • Red tape reduction
  • Additional amendments.
Patrick McClure

Patrick McClure (pictured) conducted the review.

The report noted the "major opportunities and disruptions" the sector had faced in recent years in the areas of outsourcing, outcomes measurement pressures, new "consumer directed care services" such as in the NDIS sector, fundraising and new technology.

The authors acknowledged the sector was facing issues caused by red tape and accountability requirements, as well as "high profile cases of misconduct".

The review panel recommended the ACNC's approach of being "collaborative and educative" should continue, while recommending that it broaden incentives for good behaviour and employ the law to tackle misconduct.

A common theme through the report was the need for a national scheme for the sector, although in practice this would require a referral of state powers to the Commonwealth. The panel noted the fact that Australia had "eight separate jurisdictions whose regulatory regimes impact upon charities and not-for-profits".

Gary Johns

ACNC Commissioner Gary Johns. Picture: Supplied

The Commonwealth's regulatory requirements - including the ACNC and tax regimes - have an overarching role in all of this.

"This results in inconsistency, complexity and inefficiency for charities. The Panel is strongly of the view that a national scheme is the best option for the sector going forward, especially in areas such as governance, fundraising and registration. In the absence of a national scheme, the sector will continue to be subject to an unacceptable level of unnecessary red tape."

The panel made a series of other recommendations that aimed to assist the sector in the short term.

Community Council for Australia (CCA) chief executive David Crosbie praised the 151-page examination of the ACNC.

"We believe the review panel has produced a good report that reflects careful consideration of the various issues," Mr Crosbie said.

He said the CCA welcomed most of the recommendations, which, if adopted, would enhance the role of the ACNC.

He said the CCA hoped to work closely with the government to push ahead with the recommendations, which he said would simultaneously "enhance the role of charities, reduce red tape and compliance, and improve governance of the ACNC".

"We are particularly pleased that the report acknowledges the unnecessary imposition of reporting requirements in a number of areas - as reflected in recommendations arguing for referral of state powers and increasing thresholds for definition of small medium and large charities."

Mr Crosbie said the panel's review had highlighted: "The absurd level of administration and compliance involved in our fundraising regulatory system in Australia".

He welcomed the move to reaffirm the existing purpose of the current laws.

"The decision to support the current objects of the ACNC, which were arrived at after considerable consultation with sector, is also welcomed, as are measures to improve governance within the ACNC by formally recognising both the role of the Advisory Board and the Assistant Commissioners."

Mr Crosbie said the panel's decision to reject changes to the ACNC's objects were sensible.

"The rejection of Dr Gary Johns' suggestion that the objects of the ACNC needed to be revised is a welcome admission that all the work done in establishing the ACNC and the extensive consultations within and outside the charities sector have delivered a world-leading regulator," he said.

He said recommendations to improve the ACNC's internal governance structure to reduce the focus and reliance on the Commissioner reflected previous practice by the inaugural commissioner, Susan Pascoe.

He said Ms Pascoe had actively involved the Deputy Commissioners and senior staff, "as well as drawing quite extensively on the views of the initial ACNC Advisory Board chaired by Robert Fitzgerald in setting organisational priorities and strategies".

Mr Crosbie said the panel's suggestion that the government boost the ACNC's capacity to report its investigative work - currently restricted by law - would also "enhance public trust and confidence".

He said the CCA would continue discussions about the review with members before taking a final position on areas such as the removal of exemptions for some religious charities and the reduction in enforcement powers of the Commissioner.

He urged community organisations to consider becoming members of the CCA to assist its work, but stressed the CCA would be interested in hearing from any organisations concerned that recommendations could adversely affect them.

MORE: Read the final report | About the review, including submissions

Contact the CCA: info@communitycouncil.com.au

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