AUSTRALIAN CHARITIES AND NOT-FOR-PROFITS COMMISSION BILL 2012, AUSTRALIAN CHARITIES AND NOT-FOR-PROFITS COMMISSION (CONSEQUENTIAL AND TRANSITIONAL) BILL 2012
September 18, 2012
Mr CHESTER (Gippsland) (21:09): I join the debate, like all of my colleagues on this side of the House, to express my great concerns about the Australian Charities and Not-for-profits Commission Bill 2012 and the related bill. We have had speaker after speaker on this side of the House raise their concerns. Like the member for Kooyong, I make the point that this is not intended to be a partisan debate; it is more about speaking on behalf of our communities, where, quite rightly, the not-for-profit sector and charitable organisations have expressed their concern about the direction being taken by the government. We are not taking our position lightly or, as I said, for any party-political reason. We simply do not believe this government has got it right, and we do not trust this government to get it right during the regulation stage either. We simply do not believe the not-for-profit sector will flourish under the proposed reform.
The not-for-profit sector and charitable organisations in a community like Gippsland are critically important for emergency services, aged care, education, faith based communities and churches, and sporting organisations. The government quite naturally relies very heavily on the goodwill of the millions of Australians who are prepared to donate their time to, or work in, the not-for-profit sector. The sector is based on the goodwill of Australians who are prepared to make a commitment to helping those in their society who are less fortunate or in need.
While the government should be encouraging and empowering people who are prepared to make that sort of commitment to their community, this legislation is in fact placing more obstacles in their way. Time is one of the most precious gifts that a person can give to their community. It is a resource that should be treated with respect by our government. If people give their time willingly, it is because they want to try and make a difference in their community; it is not because they want to do more paperwork for a federal bureaucracy. Adding to the compliance burden adds to administration costs and reduces the amount of good work these organisations are able to do on the ground.
I think the member for Solomon made a valid point when she looked at the issue from the other side of the equation, from the perspective of people who are prepared to make donations to the not-for-profit sector. When people make a donation to a not-for-profit organisation, they expect it to be used to make a difference on the ground, not to be absorbed in administration costs.
It bothers me—and the member for Kooyong touched on this in his speech here tonight—that since 2007 the Rudd and Gillard governments have managed to introduce 18,000 new regulations. That is a staggering record, and it is a shameful record. The Australian people have every right to be sceptical when this government claims it is reducing red tape when, in fact, since 2007 it has introduced 18,000 new regulations.
The coalition oppose the government’s proposed big new regulator for charities and not-for-profits because we fear it will not reduce red tape. We believe it treats the sector as untrustworthy and that the people involved in it are somewhat tainted by the approach being taken by the government. We fear also that it is going to hinder the activities of our charities and not-for-profit organisations and actually discourage involvement in those organisations into the future. I do not make that point lightly. At a time when it is already difficult to attract and retain volunteers or people prepared to work in the not-for-profit sector, placing any more barriers in front of them will just make it more difficult into the future.
We believe that the government should be getting out of the way of this sector and letting them do what they do best, and that is helping people and helping our communities. I fear that this government—and I am not for a second suggesting that it is its deliberate intention—is actually creating a roadblock to the operation of the charitable and not-for-profit sector and people’s involvement in it.
The states also generally do not support the direction being taken by the government of a new regulator. In fact, they have not actually wound back the compliance burden as was intended by the government in this place. The states have not agreed to hand over any of their powers with respect to charities and not-for-profits to the Commonwealth, so the new regulator will be an additional layer of red tape and thus not achieve its primary objective of reducing regulations.
My concern directly relates to my community of Gippsland, where we have an extraordinary number of people who are prepared to give their time and effort to volunteer and to work in the charitable and not-for-profit sector, but, as I said, it is getting harder and harder to attract and retain those people. Anything we do in this place that makes it more difficult to volunteer or work within the not-for-profit sector should be opposed.
The coalition believes we should be trusting the voluntary sector and trusting those working in charitable endeavours, whereas this approach from the government reverses that cornerstone assumption of trust. Essentially we are creating legislation that assumes people who are involved or who volunteer are untrustworthy and tainted. I believe that the government has taken quite a punitive approach to this matter. I believe the coalition’s approach to help the sector to support a small commission to focus on innovation, education and advocacy is a better way to go.
I refer to the shadow minister’s contribution in the debate when he made many important points that I think the government should take on board. In his contribution the shadow minister highlighted that what was proposed as simplification by the minister in his address turns out to be costly and burdensome additional reporting requirements with no reduction in red tape and no reduction in duplication. He gave the example of the Baptist Church, which said in its submission to the legislation that it had estimated that it alone will have to spend an additional $1 million per annum of scarce resources to meet the new requirements. That is a staggering amount of money for an organisation which is set up to help our communities. If the Baptist Church alone is expecting to spend an additional $1 million per annum of its resources to meet these requirements, imagine what the compliance costs will be if we extrapolate that across all the associations upon which this regulatory system will be enforced. The cost to the community will be enormous both in direct monetary costs and also in the opportunity cost in what is lost and what could have been delivered with those resources.
As I also pointed out in my opening remarks, the other great concern of the sector is that much of the burden of this new legislation will be in the regulatory requirements. The government is really asking the Australian people and asking this parliament to take them on trust. The government’s record in relation to trust is not one that anyone should be proud of. No-one in the Australian community, if asked the question, ‘Do you trust this government to get it right in relation to this legislation?’ would be confident in saying that, yes, they can trust this government.
We view the government’s approach as both heavy handed and unnecessarily intrusive to such an extent that we believe that it would diminish the work of charities and of the not-for-profit sector. We are concerned that the government has failed to consult properly with the sector and we fear it needs to go back to the drawing board. That is not just our view; that is the view that many organisations have raised concerns about.
I will refer to a few of those comments for the benefit of the Leader of the House. We had the Australian Conservation Foundation—
Mr Albanese interjecting—
Mr CHESTER: It is not my view, Leader of the House; it is actually the view of the Australian Conservation Foundation, which said:
ACF is concerned that rather than remove duplication, the ACNC bills will duplicate reporting obligations.
The Australian Baptist Ministries made a submission to the inquiry and said:
The reporting requirements for medium sized entities are too onerous. In our view the increase in compliance obligation will make it more difficult to fill volunteer roles within local congregations as well as requiring more time to be spent on compliance matters and therefore less time on matters that will provide a benefit to the community.
This is direct feedback from people directly impacted by the government’s legislation and highlights the point that has been raised by the coalition and by the many, many speakers who have spoken against the legislation over the past 24 hours. Catholic Health Australia said:
… the effect of the Bills would be to add additional regulation to the operation of most not-for-profit organisations.
That is in direct contrast to the government’s claims. We have Catholic Health Australia saying that the effect of the legislation would be to add additional regulation. This is meant to be a streamlining process and this is meant to be reducing red tape and reducing regulation. But the feedback from the people directly affected, like Catholic Health Australia, is that they will be faced with a higher regulation burden and higher compliance costs. The CEO, Martin Laverty, said:
… we cannot look to the bill today and have any confidence or indeed certainty as to how in the future those organisations currently governed under the corporations law would be governed in the future.
He went on to say:
Companies would not settle for governance standards being changed by way of regulation. BHP Billiton and Rio Tinto would not allow a government to create an ability to use regulation to change the way in which their governance operates. Why should the not-for-profit sector be any different to that?
I have a long list of similar comments and I will not prolong the House any further by reading them out.
Mr Albanese interjecting—
Mr CHESTER: I can if the Leader of the House would like me to. Mission Australia said that the legislation:
… is not sufficiently well balanced by a commitment to enable the not-for-profit sector to reduce duplication of reporting and to provide public confidence in the sector.
The National Disability Service said:
NDS supports the concept of a national regulator but is concerned that during the early stage of implementation it is possible that the reporting burden will increase for those organisations that retain a requirement to report to a state or territory regulator. Negotiations between governments to eliminate or minimise any duplication of reporting requirements arising from dual regulation need to be fast-tracked.
It goes to the heart of our concerns. The government claims to have consulted, but it is not consultation if you are not listening. It is not consultation if you are not prepared to take the submissions from organisations raising legitimate concerns to do with the compliance burden, duplication and additional costs that are going to be incurred. It is not consultation at all if you are not prepared to look at the very real issues raised by people on the ground dealing with this government’s heavy-handed approach to compliance.
Adding to the red-tape burden and adding to the compliance costs means that every dollar diverted for compliance with this new regulatory environment and the duplication involved will result in fewer services in our communities. Like the member for Parkes said earlier this evening, I fear that it is the services in regional areas, which tend to have smaller staff numbers, that will suffer the most as precious staff resources are diverted away from the core business of those organisations. I say again, every single dollar diverted, every staffer or volunteer that is tied up in red tape and compliance burdens enforced upon it by government, in this case possibly the duplication of state and federal government burdens, will result in less service, less support and less activity in the not-for-profit and charitable sector in our community.
I will close by referring to the minister’s second reading speech. He said:
The introduction of this bill represents a significant milestone in delivering reforms that strengthen and support the sector so it can continue to grow and flourish into the future.
I genuinely believe the minister was well intentioned but I do not believe this legislation achieves his claimed objectives. He went on to say:
Ensuring that the sector can consolidate its standing in the community through enhanced transparency and accountability is essential to its ongoing growth and sustainability.
A regulatory system that promotes good governance, accountability and transparency for NFP entities will help to maintain, protect and enhance the public trust and confidence that underpins the sector.
In closing, the sector already has good standing in the community. It does not need the heavy hand of this government driving people out of the sector. There is a great amount of public trust in the sector already and there is also a great amount of confidence. I acknowledge the sector is not perfect and the coalition does support reforms but this heavy-handed, overly regulated approach will create more problems than it solves. I oppose the bill.