Australia: The Next Step: Public Consultation for a National Not-For-Profit Regulator
Not for profits update

On 21 January 2011, the Commonwealth Assistant Treasurer released a scoping study for public consultation inviting submissions from stakeholders in relation to design options for a national not-for profit (NFP) regulator.

The public consultation is the next step in the Australian Government's NFP sector reform process, affecting community, charity and philanthropic organisations.

Issues for consultation

The issues for consultation outlined in the consultation paper follow key areas identified by the Government. The questions raised for public consultation can be summarised as follows:

1.  The role and responsibilities of a national NFP regulator

1. What are the appropriate goals for national regulation of NFPs?
2. What types of entities should be regulated by a national NFP regulator?
3. Should charitable trusts be supervised by a national regulator instead of the Attorney General?
4. Should regulation of incorporated associations be moved to a national regulator?
5. Should there be a residual role for the states in regulating incorporated associations?
6. What impacts would simplifying and streamlining the assessment, granting and monitoring of concessional tax treatment have on the NFP sector?
7. What are the likely compliance cost savings from improvements to taxation arrangements?
8. What elements of the current taxation framework are most problematic?
9. What value would educational and compliance initiatives managed by a new national NFP regulator provide to NFP entities?
10. How can the compliance burden imposed by current requirements be simplified?
11. What information might need to be provided to a national regulator but not made public through a NFP information portal?
12. What powers does the regulator require to improve governance and regulatory oversight?
13. What role should a national regulator play with respect to fundraising?
14. What problems arise from the complex interrelationship between Commonwealth, state and territory responsibilities?

2.  Form of the national regulator

1. What form of the national NFP regulator best meets the objectives of simple, effective and efficient regulation of the NFP sector?
2. Would a Commonwealth only regulator provide sufficient benefits to the sector?

3.  Funding implications

1. What level of contribution should NFP entities make to the cost of the national NFP regulator
2. Should there be a differential cost for smaller NFP entities?

4.  Definition of 'charity'

1. Would a statutory definition of 'charity' achieve the goals of greater certainty and administrative efficiency in relation to the determination of charitable purpose, particularly in relation to determining access to taxation concessions and across different jurisdictions and laws?
2. Is Parliament a more appropriate body to define charitable status that the courts, given its ability to be more responsive to changing community needs and expectations?

The consultation paper can be accessed here.

Changes on the horizon

The consultation paper provides an opportunity for NFPs including charities, community organisations, and not-for-profit retirement village operators, to provide initial views on the proposed national NFP regulator.

The consultation paper is an opportunity for NFP organisations to provide submissions with a view to balancing the need for regulation and accountability of the sector with the compliance burden that organisations bear.

The closing date for submissions is 25 February 2011. Gadens Lawyers can advise you on your submission or assist you to prepare a submission to the Government.

For more information, please contact: