Australian Charities and Not-for-Profits Commission now a reality
The fate of the long-debated Australian Charities and Not-for-Profits Commission is finally resolved, with the Australian Parliament passing both ACNC Bills earlier today. As anticipated, the Senate made further changes to the Bills yesterday before sending the legislation back to the House of Representatives for approval.
A start date for the ACNC is yet to be announced, but is likely to be some time in December 2012.
Amendments
The ACNC legislation as passed has the same structure as the original Bills. None of the important concepts in the Bill have changed, but several important amendments were made to improve the ACNC’s focus on red tape reduction, and increase the new law’s benefits for charities. These include:
- Warning and breach notices will usually be published on a charity’s public Register record. Where a charity has breached the ACNC Act or failed to comply with a compulsory standard, but the breach was an honest mistake, the Commissioner can choose to not publish the notice, or to remove an existing notice. This is to protect charities’ reputations where the breach is minor or has been fully resolved, and there is no pressing reason why the information should either be published or remain published.
- Regulations setting or changing governance or external conduct standards must be approved by Parliament, or at least not disapproved within the time limit for disapproval. In addition, governance or external conduct standards must only be made after appropriate consultation with the sector, experts in the field, the Commissioner, and entities likely to be affected by the standards.
- Standards must be based on achieving an end result (for example, accountability to members) or following a principle (for example, natural justice), rather than prescribing how charities are to achieve the result. This is an attempt to cater for the great diversity of Australian charities.
- The Commissioner will report on the ACNC’s progress in reducing red tape as part of the annual ACNC report to Parliament.The maximum annual revenue allowed for the DGR funds of basic religious charities will increase in line with indexation of the ‘small registered entity’ thresholds.
- Better transitional arrangements for entities which have associated public benevolent institutions (PBIs) or health promotion charities, to ensure the attached PBIs and health promotion charities keep their tax concessions.
These are in addition to the previous amendments made by the House of Representatives.You can read our summary of those changes by clicking here.
Important dates
When ACNC opens: Organisations registered with ATO as income tax exempt automatically registered with ACNC; organisations seeking Commonwealth tax concessions for first time able to register with ACNC. ACNC will only determine charitable and PBI status – all other concession decisions remain with ATO.
2012-2013: No reporting of financial information to the ACNC this financial year. Existing charities and other organisations registered with the ACNC will be expected to report basic operational information – the ‘annual information statement’.
2013-2014: All registered entities will report to the ACNC on both operational and financial matters. The exact nature of the financial reporting framework is yet to be finalised, but obligations will vary according to ‘small’, ‘medium’ and ‘large’ thresholds.
Beyond: The ACNC will develop the ‘charity passport’ – charities will report information required by other government agencies to the ACNC, and the ACNC will pass it on to agencies as it is required. The goal is to rationalise reporting and grant acquittals, beginning with Commonwealth agencies.
Note: This information may change in coming weeks as operational arrangements for the ACNC are finalised.
What this means for you
We will be progressively publishing more information about the ACNC and the new reporting and compliance standards.
If you need specific advice on how these developments will affect you or your organisation, you can contact us on (07) 3837 3600.
Disclaimer: This update provides an overview only of the new legislation, and is not all inclusive. It should not be considered to be legal advice. You should obtain legal advice for your specific circumstances before relying on general information.