What is the real intent behind plans to abolish Australia's charity regulator?

This government does not like campaigning and advocacy organisations, and the removal of the ACNC as an independent regulator simply exposes those organisations to attack.  

Greg Ogle

Excellent piece by Greg Ogle,  Independence of Charities Under Threat,  on the real intent behind Abbott Governments plans to repeal the national charity regulation body — the 18-month old Australian Charities and Not-for-Profit Commission (ACNC)- and hand back the regulation of charities to the Australian Tax Office. 

Ogle argues that repeal of the ACNC paves the way for a return to the political attacks of the Howard Government years (1996-2007), particularly attacks on environmental and campaigning groups involved in public advocacy, direct action and activism.

The Australian Charities and Not-For-Profits Commission (ACNC) was set up less than 18 months ago by the Federal Labor government to regulate the charitable sector. The governing legislation for the ACNC ensured the independence of charities and their right to advocate for charitable causes.

The objects of the Act that established the ACNC committed to ensuring a “robust, vibrant, independent and innovative” charity sector. The legislative provision ensured that the governance standards required to be met by charities did not constrain advocacy. 

In essence, the legislation gave charities some protection for pursuing advocacy and activist campaigns that challenge Government policy or corporate malfeasance.

Ogle reminds us of the Howard Government's direct attack of advocacy and campaigning by charities and NGOS: 

Under the Howard government, the tax office was used to attack and pressure charities who were advocated for policies the government didn’t like. This was at a time of recurring public and parliamentary attacks on those charities by senior Liberal politicians like George Brandis, Brett Mason and Eric Abetz, echoed by industry groups and right wing think tanks. The pressure meant that between 2004 and 2007 The Wilderness Society, for instance, faced at least 20 different public calls for them to be stripped of their charity status. They passed the three Tax Office audits of their “political” activity, but other groups like AidWatch had long court battles to secure their tax charity status.

In a separate article, Andrews leads fight to abolish Charities Commission, Mike Seccombe shows how the campaign to abolish the ACNC was driven by the self interest of the financial services sector (who administer charitable trusts) and influential parts of the Catholic Church, who are concerned about revealing financial details of the Church. 

Seccombe notes how Cardinal Pell, former Head of the Catholic Church in Australia and confidant of Prime Minister Abbott and Minister Andrews, made it clear that he opposed the ACNC.

Although there were some initial concerns among charities about the likelihood of increased compliance and regulatory costs, the majority of the charity sector now support the ACNC. Seccombe describes the campaign waged by the powerful financial services industry to abolish the ACNC

While the financial services industry claimed they are concerned about the cost of complying with its financial disclosure requirements, Seccombe shows that their real concern is the likelihood of scrutiny by the ACNC of their  administration of charitable trusts, that would reveal the grossly excessive fees they take for looking after the bequests of philanthropists.

Seccombe quotes Tim Costello CEO of World Vision Australia and Chair of the Community Council of Australia: 

“It’s pretty apparent there are only two main groups that are strongly opposed. The trustees, who handle dead people’s money, are a major source of opposition because they don’t want transparency about what they charge. The other is the Catholics".

Ogle refutes the Minister's claim that the abolition of the ACNC is designed to reduce red tape, by highlighting  other ways that the Federal Government could reduce red tape, but refuses to do so.

 Ogle gets to the heart of the matter:

This government does not like campaigning and advocacy organisations, and the removal of the ACNC as an independent regulator simply exposes those organisations to attack.

Spot on!!! 

Not for profit aged care provider Baptistcare protests Federal Government funding cuts

Always pleasing to see large Not- for- profit organizations like Baptistcare willing to make a stand  and protest against Government policy that disadvantages the people they serve.

This report describes a protest by staff at Baptistcare's Rockingham aged care facility against Federal Government funding decisions in aged care that are resulting in $500 million being cut from aged care funding.

Baptistcare is extending the protest to 13 of its residential aged care facilities and three disability and community care sites from today, in protest at the Federal government's decision

The organisation has taken the step of launching the visual protest, which includes a call to action via social media, to raise greater public awareness of the government's 1 July adjustments to the Aged Care Funding Instrument (ACFI).


The protest is part of  a larger campaign being run by not- for- profit aged care providers through Aged and Community Services WA  which represents not-for-profit aged care providers which care for 100,000 of the state's most frail and vulnerable citizens.

Flags emblazoned with “Government Neglects Aged Care” flew outside the Gracehaven facility protesting reduced federal funds for aged-care organisations to deliver clinical care services to its residents.

Baptistcare CEO Lucy Morris said the Government had made it almost impossible for not-for-profit residential care providers, like Baptistcare, to provide appropriate care for the elderly and vulnerable.

“Through its adjustment of the assessment tool used to fund high-care services, the Government has stripped money from the services needed to care for older, sicker residents, who have more complex health needs and need higher levels of care,” Dr Morris said.

But Mental Health and Ageing Minister Mark Butler said subsidies would not be reduced and they would continue to grow by 2.7 per cent a year above indexation, per resident over the next five years.

He said early data for providers’ care funding claims made in July showed average subsidies increased from $133.96 per resident per day in June to $134.83 in July.

“Leading Aged Services Australia (LASA) and Aged and Community Services Australia (ACSA) have claimed funding will be cut by hundreds of millions of dollars in 2012 and beyond,” Mr Butler said.

“These claims are clearly untrue, as these early figures show. The Government’s aged care package will increase funding for residential care. This year’s subsidies will be $310 million more than last year.”

ACSA WA chief Stephen Kobelke said WA’s not-for-profit aged care sector had struggled for years to survive in one of the world’s most expensive cities.

“There has been unprecedented stagnation in the provision of aged-care services in WA, to the point that 3368 bed licences have now not been taken up since 2007,” he said.

He said ACSWA figures showed some aged-care providers would face cuts of over $14,000 per resident.

Regulator of the Australian not-for-profit sector is in doubt

Excellent and timely piece here by El Gibbs in New Matilda on the Federal Government's  plan to set up an Australian Charities and Not-for-Profit (NFP) Commission to improve regulation of the not-for-profit sector.

The Federal Government's legislation to set up up the Australian Charities and Not-for Profit Commission to  manage all aspects of NFP governance and require annual financial reporting by organisations across the country went through the House of Representatives last week and is due to come before the Senate in the next sitting of Parliament.

The relevant bills have been through an extensive consultation process, including a formal review by a Senate Committee. The Greens, who hold the balance of power in the Senate, support the legislation in broad terms, but intend to move amendments in the Senate and may block the legislation if their amendments are not adopted.

The Opposition Liberal National Parties currently oppose the creation of the Commission. and provided over 30 speakers against the Bill when it came before the House of Representatives last week.

As El points out the main industry bodies representing the not- for- profit sector in Australia have been calling for the streamlining and improvement of the regulation of the not- for- profit sector for some considerable time and there is widespread support for the Commission.

However, despite this level of support there remain concerns that, without support from the states and territories, the impact of the Commission will be to increase, rather than decrease, the administrative burden on NFP groups, particularly smaller agencies.

I have cited El's piece in full:

Will a Charity Commission cut Red Tape 
by El Gibbs

A proposal to regulate and oversee a section of the Australian economy that employs 8 per cent of workers and comprises over 600,000 different organisations went through the House of Representatives last week. It’s due to come before the Senate in the next sitting of Parliament.

The proposed legislation will set up a commission to manage all aspects of governance and require annual financial reporting by organisations across the country.

The Australian Charities and Not-for-profit (NFP) Commission is a long-standing goal of the NFP sector and has been recommended in a series of reports into the sector since 2001. Currently, charities and NFP groups report to a myriad of government agencies. They often have to report a number of times and in different ways, creating a great deal of red tape. 

"We are at the altar of the reforms we want and need and we ask for the support of our national parliament and of the states and territories to deliver for us better and smarter regulation. We don’t want to be jilted yet again," David Thompson AM, Director of the National Roundtable of NFP Organisations, told New Matilda. 

The Commission will also oversee future changes to the definition of what is a charity and which organisations are able to claim the lucrative Deductible Gift Recipient (DGR) status, that allows donations to be tax-deductible — this has an impact on the kind of fundraising an organisation can do. The Commission could also frame the unique place the NFP sector holds in relation to the government and business sectors. 

The CEO of ACOSS, Dr Cassandra Goldie has said:

"Our sector is overly but ineffectively regulated. For the reams of paper and hours of analysis that charities put in to reporting the same information to multiple funders and regulators, we know little about the activities, size or scope of this essential sector."

The proposed Commission will, according to Senator Ursula Stephens, have three main objectives.

"Its first object is to maintain, protect and enhance public trust and confidence in the NFP sector. Its second object is to support and sustain a robust, vibrant, independent and innovative NFP sector. The third object underlines the important role that the ACNC will have to promote the reduction of unnecessary regulatory obligations on the NFP sector."

In a statement from the State, Territory and National peak groups for the sector, Goldie states that "the creation of the Australian Charities and Not-for-profit Commission is the culmination of a long process and has broad support from the community and social services sector. 

UnitingCare Director, Lin Hatfield-Dodds, told New Matilda that the opportunities offered by the Commission could be of great benefit to the community and to the sector:

"It’s important that funders can quickly and easily get an objective and transparent look at the community groups they support. The Commission could also act as a ‘Report once, use often’ tool, so that community groups report to one agency across all government. When we are spending public money, we have to be transparent. However, there is a risk that we spend more time and administration on reporting, rather than delivering innovative services."

However, there are concerns that, without support from the states and territories, the impact of the Commission will be to increase, rather than decrease, the administrative burden on NFP groups. Currently, organisations can either incorporate, and be regulated by ASIC, or form an association, which is regulated by state-based Departments of Fair Trading. The addition of a Commission, with no corresponding reduction in state-based regulation, is of concern to many groups. COAG is due to consider these issues early in 2013. 

In the interim, the Commission could drive reform of red tape within the federal government by streamlining reporting requirements across departments and agencies. For example, each time a group applies for a grant, they have to start from scratch, rather than being able to register with the Commission once for all other agencies. 

The relevant bills have been available for public scrutiny for some months, and have been through an extensive consultation process, including a formal review by the Senate Community Affairs Committee.

 The current legislation is the result of many changes, however there are still concerns held by the Greens, who intend to move amendments in the Senate in the next sitting of Parliament. 
"As I outlined in my dissenting report on this legislation, the Greens remain concerned that there’s not enough detail about gag-clauses for advocacy groups, and we think there needs to be more consultation on the governance arrangements and independence for the sector to advocate on behalf of those they look after," Greens Senator Rachel Siewert told New Matilda:

"Not-for-profit groups are an essential part of civil society and it’s important that this legislation gives transparency in dealing with government. We also want to see the Commissioner given more power to drive the red-tape reduction agenda."

The Greens confirmed to New Matilda that they will consider blocking the legislation if their amendments are not adopted by the Government. However, they stated their commitment to working with the Government to improve the bills to address the remaining issues of concern to the NFP sector.

The LNP currently opposes the creation of the Commission. Despite the broad sector support, the LNP provided over 30 speakers against the Bill when it came before the House last week. Kevin Andrews, the Shadow Minister for Families, Housing and Human Services, stated  that "this is legislation which has been foisted upon the charitable sector in Australia which they do not want, which there has been no case made by the hapless minister at the table." 

"This is simply not true," said Thompson, who leads the sector’s peak body. "The evidence is in the thousands of words in submissions from the sector, calling for this reform. The Government has taken on board a significant number of issues raised in submissions." 

Other LNP members quoted a range of charitable and NFP groups’ concerns about the Bill. However, some of these quotes were from submissions about a much earlier version of the legislation and many of these concerns have now been remedied. Several sources have confirmed that there has been considerable disquiet among those groups named by LNP members in the debate. 

One, the Australian Institute of Company Directors, is quoted as having concerns regarding the impact of the legislation on board members, most of whom are volunteers. In a recent statement, the AICD said: "if suitable amendments giving effect to these changes were to be made to the current Bill, and subsequent to our review of the revised Bill wording, we would support its passage through Parliament." They support the amendments that the Greens will be putting to the legislation. 

The Bill has been introduced into the Senate and is due to be debated in the next sitting, starting 9 October. If the legislation is not passed, Thompson says "it will be back to the drawing board in the quest to get the regulator we want. We have waited a long time and an enormous effort has been put in to get it this far."

A crises parly caused by decades of market driven reform

photo courtesy of ABC News and Micaela Rehle, file photo Reuters)

The crises in the aged care sector is indicative of what lies ahead for the human and communty service sector more broadly.

It is the culmination of 2 decades of market driven reform in which the provision of care and the delivery of human services is marketized, privatized and corporatized.

The report below is from ABC News:

The aged care sector in WA says nursing homes are sacking staff and cutting services in a bid to stay viable, following an overhaul of Commonwealth funding.

Providers predict they will receive up to $24,000 less for each elderly person in their care, under the new funding arrangements.

The head of Aged and Community Services WA, Stephen Kobelke, will attend crisis talks with dozens of stakeholders today.

He says the cuts have put pressure on an industry already struggling to cope.

"Is it sustainable to remain in residential aged care?

"They're the things they'll start to look at; WA providers are deeply concerned about their ability to operate, or in fact their desire to do so.

"They want to look after older people but they've got to have the tools."

Mr Kobelke warns companies have no choice but to cut services and staff.

"Rural providers have already needed to start some sort of downsizing," he said.

Mr Kobelke says the industry is already doing it tough thanks to WA's workforce shortages, building costs and isolation.

Mixed reaction to National Fair Pay Case

Last week Fair Work Australia upheld a pay equity claim for 200,000 community services workers in the National Community Services pay claim case but has fallen short of ordering an equal pay order, instead calling on the unions to show how much of the pay gap is caused by gender discrepancies.

Not surprisingly the decision by Fair Work Australia in the  has generated mixed responses, as outlined in this extract from an article that first appeared in Pro Bono News.

The Australian Not for Profit sector has reacted to the long-awaited ruling by Fair Work Australia in the equal remuneration case with a mixture of optimism and caution, saying it is now up to the government to commit to funding a pay rise for community sector workers.

With many in the sector hoping Fair Work Australia would finally award an equal remuneration order for 200,000 social and community sector workers, the decision by FWA to delay ordering a wage rise for workers was seen by some as an anticlimax.

Fair Work Australia upheld the pay equity claim for community services workers, saying it does recognise that there is not equal remuneration for SACS workers when compared with state and local government employment.

However FWA fell short of issuing an equal remuneration order, saying the extent to which this is based upon gender is not yet clear. FWA has instead calling on the unions to show how much of the pay gap is caused by gender discrepancies.

UnitingCare Australia says Fair Work Australia’s decision today to extend its inquiry into community sector wages is a bit of an anticlimax.

National Director, Lin Hatfield Dodds says with additional submissions due by August this year, the sector expects an outcome by Christmas.

Community services peak body the Australian Council of Social Service says that the tribunal’s finding validates the claims of those working in the sector that they do not receive equal remuneration for the work that they do, and that gender has been an important factor in creating these conditions.

ACOSS CEO Cassandra Goldie says she congratulates Fair Work Australia for getting it right.

With FWA calling for further evidence on the extent to which lower wages are due to gender considerations, Dr Goldie says ACOSS would like to see a final ruling in line with the 2009 Queensland decision that awarded pay rises to community workers of 18-42% per cent.

She says this is the bar if wage equality is to be achieved in the community sector

Community sector employer group Community Employers WA received the FWA decision with a mixture of optimism and caution.

Community Employers WA’s Executive Director, James Lawton says they still strongly caution that any increases that may be awarded by Fair Work Australia, following the next series of submissions and hearings, must be accompanied by a guarantee by the Federal and State Governments to fund these increases.

Lawton says while they are pleased that the process is continuing and the issue of fair and just pay is still on the agenda, they cannot underestimate the disastrous effect of increased pay, without a corresponding increase in funding, on the sector.

He says if this funding is not provided, there will be a reduction in community services and staff who provide those services, resulting in the most vulnerable members of the community being the real losers.

Federal Member for Melbourne Adam Bandt has backed calls for the Government to commit to funding any pay rise awarded by FWA, saying the tribunal had made a clear statement that government funding was the problem.

The Federal Budget and the not for profit sector

The Gillard Government's Federal Budget contains a raft of proposals relevant to the Australian not- for -profit sector. A detailed guide to the measures can be found here.

Third Sector e-news identifies three major provisions in the Budget relevant to the regulation and governance of the sector:

These provisions are: the introduction of a statutory definition of 'charity' to be used in all Commonwealth laws to take effect from 1 July 2013, the establishment of an Australian Charities and Not for profits Commission and the implementation of a not-for-profit income tax.

‘Charity’ definition The definition of ‘charity’ will be based on the 2001 Report of the Inquiry into the Definition of Charities and Related Organisations, taking account of the findings of recent judicial decisions, such as Aid/Watch Incorporated v Commissioner of Taxation. The Government will also consult with the states and territories with the intention of developing and introducing a definition of 'charity' that can be adopted by all jurisdictions.

Not-for-profit Commission $2.8 million over the next four years will be contributed to the new Australian Charities and Not for profits Commission. It is expected that the commission will develop guidance for the sector, implement system changes, and re-assess the charitable status of entities on the basis of the new statutory definition. It is also expected that the Commission will reduce red tape and improve transparency and accountability of the sector.

Not-for-profit tax reform Tax reforms will be introduced to ensure that concessions provided to not-for-profit entities are targeted only at those activities that directly further altruistic purposes. As such, any income retained from commercial activities that is not directed towards altruistic work will not be tax exempt. The new arrangements will commence on 1 July 2011 and will initially affect only new unrelated commercial activities that commence after 10 May 2011

Of particular interest is that the Gillard Government has allocated $53.6 million  to establish a single independent national regulator for the not-for-profit sector.

The Federal Government's Office for the Not for Profit Sector reports that:

The Australian Charities and Not-For-Profit Commission (ACNC) will improve the accountability and transparency of the sector while removing reporting overlap for general reporting requirements at the Commonwealth level.

The ACNC will be responsible for determining charitable, public benevolent institution and other NFP status for all Commonwealth purposes. It will provide education and support to the sector and implement a report-once use-often general reporting framework.

An implementation taskforce will be operational from 1 July 2011 to prepare for the commencement of the ACNC on 1 July 2012 and consult with the public, the sector and state governments on general reporting and public information portal requirements.

A perfect storm that threatens the future of the not-for-profit sector

Australian Greens Senator Rachel Siewert spoke some truths at the National ACOSS Conference this week, warning that the NFP sector faces a "perfect storm" of coinciding forces that threaten its future.

Whilst these threats have been acknowledged and recognised before by many in the the sector, they are becoming more urgent, and as Rachel points out, there is no evidence that any of the reform proposed by the Rudd or Gillard will address them. The threats identified by Senator Siewert were:

• The Social and Community Sector Workers pay equity case before Fair Work Australia, which has received no indication that Government will deliver a matching funding boost to services. She says everyone agrees a rise in wages is needed, but the sector is unable to support it without an increase in resources.
• The introduction of the Increased Super Guarantee provision – again with no promise there will be matching funds
• The increased cost of delivering services amidst increases in power, water, rent and insurance costs
• The struggle to find workers, a situation Senator Siewert says will only grow worse as the population ages, demands on services increase and the value of community sector wages continues to erode. She says in areas of Western Australia and Queensland, the Not for Profit sector – and in particular the aged care industry – is losing staff to the mining industry. She asks how can the sector hope to hold onto underpaid staff when they can get a job earning $80,000 as a cleaner in a mining town?

As Rachel points out Federal (and State Governments) have promised plenty, but delivered little. Indeed rather than deliver 'reform' Governments continue to impose inappropriate and contradictory funding and reporting requirements and fail to address the historically high levels of underfunding. Reform is done to the sector, rather than to inappropriate government policy, practices and processes.

She concluded with this:

“The Rudd and Gillard governments have continued to promise much needed reforms for not-for-profits and community services, but so far their much-vaunted compact with the sector has failed to deliver anything by way of practical reforms to address the crisis facing the sector".

 Very true.