Charities Voice Overwhelming Opposition to ACNC Repeal Bill

Charities and their peak bodies have expressed dismay and confusion at the Federal Government’s plan to repeal the ACNC. Social impact analyst Emma Tomkinson reviews the submissions to the Senate inquiry into the Bill to repeal the ACNC for Pro Bono Australia News.

Submissions to the Senate inquiry into the Bill to repeal the ACNC condemned the move as a retrograde step for the sector and urged the Government to reconsider.

There were 145 submissions to the inquiry, of which 119 were by organisations and 26 were by individuals. 43 of the organisations were peak bodies representing their members, 30 delivered services to the community and 28 delivered services to the sector.

118 (81 per cent) submissions opposed the Bill and 14 (10 per cent) supported it. Thirteen submissions provided information or made statements to the Senate Committee, but explicitly neither opposed nor supported the Bill.

The Australian Council of Social Services recognised: “It is unusual for an industry to be championing regulation. However, as the recipient of ineffective regulation for many years, the Australian NFP sector recognises the value of an effective, sector-centred, streamlined and proportionate regulatory regime.”

The outpouring of support for the ACNC appears to be largely due to the way it has engaged the sector over the 16 months it has been operating. Jesuit Social Services stated that, “working with the Australian Charities and Not-for-Profits Commission over the past 18 months has, if anything, further strengthened our support for a national regulatory framework. Our interactions have been positive and we commend the Commission and its staff for the useful information they have provided; for excellent online systems; and for a willingness to engage with, and listen to, the concerns of the sector.”

The most common reasons given by submissions in opposition to the Bill can be seen in the chart below. They fall into two categories, the first supporting the retention of the ACNC and the second rejecting the process that has been taken to repeal it.

The most common theme was a response to the intention of the Bill to reduce red tape. 68 submissions proposed that repealing the ACNC would increase red tape for the sector, many agreeing with Price Waterhouse Coopers that, “The ACNC has embarked on important work to standardise legislation and reporting requirements for NFP entities regardless of the state they operate in. The current reporting system for NFPs is onerous, cumbersome and inconsistent across states. If the ACNC is repealed, efforts to align legislation and reporting requirements will cease.”

Several acknowledged the achievements of the ACNC with the SA and ACT regulators. 

“The repeal of the ACNC will stop an immediate red tape reduction measure in South Australia,” wrote the South Australian Council of Social Services.

They described the state-specific situation where legislation to remove state reporting requirements and abolish the burden of fundraising licences is ready to be introduced to parliament, but is on hold as it is predicated on the existence of the ACNC.

The ACT Government submitted that “uncertainty over the future of the ACNC has made it impossible for the ACT to withdraw from the regulation of the sector in the ACT, or to continue with the development of an MOU with the ACNC. The inability of the ACT to pursue its intentions in this area will result in a significant lost opportunity to reduce unnecessary administrative impact on the sector.” It estimates the cost of this opportunity at around $2 million per annum.

The Australian Cervical Cancer Foundation expressed “that if the desired outcome is to reduce red tape and administrative cost and burden for Charities, then the ACNC should not be abolished, but instead should be strengthened and supported by all States and Territories (in the same way as proposed by SA and the ACT) to give it the greatest opportunity to be the national ‘one stop shop’ for charities utilising a ‘report once use often’ approach.”

46 organisations described the lengthy consultative process behind the establishment of the ACNC and 19 submitted that there has been a lack of consultation informing the decision to repeal it. The Community Council of Australia stated “how disappointed we are that the extensive level of consultation and engagement with the charities sector leading up to and since the establishment of the ACNC has been dismissed by a new Government intent on pursuing its own agenda.”

The Uniting Church in Australia National Assembly summarised the bewilderment of the sector. “The Church has yet to see a well-researched justification for abolition of the ACNC and its replacement by a successor body or arrangement,” it stated.

A handful of submissions assumed that the abolition of the popular regulator is inevitable and focussed on providing advice that could help shape its successor. The legislative process proposed is that there are two bills—this Bill that repeals the ACNC and a second Bill to establish its successor. Many organisations were bewildered that the Repeal Bill could be considered separately in isolation.

Thirty organisations agreed with the sentiment expressed by the Institute of Chartered Accountants. “We consider that a constructive and useful debate cannot be undertaken with respect to the first Bill, without adequate knowledge of what is proposed in the second Bill,” it stated.

There was common concern expressed over inaccurate and misleading information in the Explanatory Memorandum accompanying the Repeal Bill. The error most frequently referred to was the abolition of the New Zealand regulator, which still exists, albeit as part of a government line agency.

Support for abolition of the ACNC was voiced in 14 submissions, some of which backed returning to the previous regulatory system and some of which proposed other models of regulation. The submitting organisations included those representing hospitals, independent schools, universities, churches and medical research centres.

Most argued that their operations were already tightly regulated by at least one body.

Many submissions agreed, however, with the Australian Conservation Foundation that the regulator needed more time to realise its potential.

“The long-term benefits of the Australian Charities and Not-for-profit Commission (ACNC) as a central reporting body for the charitable sector are clear. Unfortunately, being in operation for such a short period of time, many of these benefits have not yet been fully realised. The ACNC has not been a ‘quick fix’ and it was never designed to be,” it stated.

The most frequently quoted and supported submissions came from the Community Council for Australia and the Queensland Law Society.

About the Author: Emma Tomkinson is a social impact analyst living and working in Sydney, Australia. She is particularly interested in the role of impact measurement in evidence-based policy, including policy related to social investment. She created the Social Impact Bond Knowledge Box for the Centre for Social Impact Bonds at the UK Cabinet Office and also developed the social impact bond concept for application in New South Wales, Australia. She currently works with a range of social purpose organisations.