It’s nigh on a decade since a Senate committee recommended the Australian Charities and Not-for-profits Commission (ACNC) be abolished, incredibly just a year after the body was set up.
But the ACNC is still here and many of the issues that the committee raised are continuing.
What’s going on?
First, the ACNC’s back story. It was set up in December 2012 as a ‘one-stop shop’ for charities and not-for-profits to register, and access tax concessions as well as government services and other concessions. The idea was for sector operators to report once to the ACNC and not have to repeat that to the Australian Tax Office. The original bill expected the ACNC would “reduce the compliance burden associated with duplicative, ad hoc, and inconsistent reporting”
That a Senate committee would call for the ACNC to be shut down a year into its tenure, should raise eyebrows, even now. The committee received submissions about the ACNC having increased red tape, that it had looped into its purview charities who didn’t have prior significant reporting obligations and those that did were already subject to much regulation.
For example, the Finance Services Council estimated that extra ACNC reporting obligations cost up to $150,000 annually per trustee company member organisation. The ACNC countered this saying that agencies would incur extra costs in transitioning to the new system.
The Senate committee also found the ACNC was asking for information that most organisations had already given the government.
A key issue was the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) and other Commonwealth, state, and territory regulatory schemes were not coordinated. This meant charities operating across state or territory borders experienced a “drain on resources”. The ACNC was supposed to spearhead national harmonisation, but was slow going on that, the committee found. (It’s still a disparate system of schemes.)
The Senate committee wrote: “The ACNC Act has significantly and unnecessarily increased red tape for many charities, thereby creating a burden with no apparent benefit either to those they serve or the wider community.”
In 10 years since that Senate committee urged the ACNC be banned, has the commission changed its spots? I’d argue not much has changed and I’m scratching my head as to why it’s still here.
In one of the lowlights, former charities commissioner Gary Johns came under fire for his prior ‘anti-charities’ stance, with a Labor shadow minister tabling in federal Parliament a petition for his resignation.
A federal government audit of the ACNC reported in March 2020 stated the latter had been “largely effective” in regulating registered charities. There were some holes, though. The commission was found to be only “partially effective” in maintaining the charity register. The ACNC also needed to better document its assessment processes for registration and address non-compliance. It could have done more work on cutting red tape, too.
And, this was a clincher for me from the audit: the ACNC “was less able to demonstrate its effectiveness in supporting and sustaining a robust, vibrant, independent, and innovative not-for-profit sector”.
Wasn’t that the ACNC’s remit?
Bizarrely, the timing of that audit seemed to spur the ACNC to find targets for an aggressive investigation program. At the time, the then-Morrison government handed the ACNC $1 million to review charities as part of a reform program.
Countless charities around Australia have had to divert tens — even hundreds — of thousands of dollars to answer the ACNC’s subsequent protracted ‘investigations’. For example, the Women with Disabilities Australia not-for-profit organisation was given 14 days to meet the ACNC’s demands for extensive information or risk penalties, The Saturday Paper reported.
Small charities are concerned. They don’t have funds or resources to divert to onerous protracted investigations.
Those inquisitions can be quite uneven.
Typically, the commission doesn’t name its targets, but commissioner Sue Woodward used her discretion in March last year to name Hillsong Church. It’s not clear if that’s ongoing or resolved. Amid this, we saw PRObono, a stellar independent news site covering the not-for-profit sector, stop publishing news. It’s largely just an online jobs board now.
Through my wide network in the charity sector, I keep hearing that politicians don’t want to get involved in any ACNC investigations; instead, they direct those who complain to their lawyers.
Something else is going on.
The ACNC is one of a few government agencies taking part in a six-month trial to infuse their processes with generative artificial intelligence. The Digital Transformation Agency (DTA) says the pilot allows those agencies to trial “new ways to enhance productivity and develop skills, capabilities, and preparedness” for AI. The pilot, to focus on routine, day-to-day tasks, including meeting summaries, action lists, internal memos, and presentation outlines, will conclude in June.
The DTA has set down guardrails: accountability; transparency and explainability; privacy protection and security; fairness and human-centred values; and human, societal, and environmental wellbeing. The big one for me is the need for agencies to “involve relevant communities in decision-making” where AI tools were adopted. Will that happen when it comes to the ACNC?
I’m curious to see if the ACNC’s poor performance led to it being co-opted into the DTA’s trial. I’ll wait to see what the ACNC reports about its AI improvements if that happens.
We’re at a fork in the road — either the ACNC’s functions should be absorbed by the ATO or Australia starts afresh with a world-class regulator.
Start from scratch. Get it right this time.
READ MORE:
Secrecy provisions hinder openness in the charities sector, so it’s time to act
