The Abbott government must remain firm in its pledge to abolish the charities commission and reduce red tape on the not-for-profit sector, says a new report from The Centre for Independent Studies. The Australian Charities and Not-For-Profits Commission (ACNC) set up by the Gillard government in 2012 is not achieving its main objectives, which were to improve public trust in the not-for-profit sector, reduce red tape, and police fraud and wrongdoing.
'The charities commission has failed as a model of regulation, and Australia would be better off following New Zealand's lead and scrapping the charities commission altogether,' says Helen Rittelmeyer, author of Independent Charities, Independent Regulators.
'The ACNC was established to enhance public trust in the not-for-profit sector, but public trust in charities was already high, and is unlikely to increase any further if the international record of charities commissions is any guide.'
'Charities now have to fill out an Annual Information Statement, ostensibly to reduce the burden of providing duplicate paperwork to different government agencies; instead, it has proven to be just an additional layer of reporting.'
'Fraud is a minor and declining problem for not-for-profits in Australia, and the types of fraud predominant in the sector are ill suited to the oversight a charities commission provides. Law enforcement fulfils its role of pursuing charity fraud, and will continue to do so after the ACNC is abolished.'
Australia should embrace new forms of oversight that would allow the not-for-profit sector to maintain its independence.
'Independent charity watchdogs - sometimes called the Charity Navigator Model - are growing worldwide, which means donors now have the means to research charities before they open their wallets,' says Ms Rittelmeyer.
'Australia is a generous country, with nearly 70% of us giving, yet by adding to the regulatory burden and taking time away from charities' primary purposes, the ACNC risks discouraging charitable giving, particularly among high-wealth donors.'
'The Abbott government must counter the excessive burden of the ACNC now by committing to a timeframe of abolishing the commission.' Helen Rittelmeyer is a Policy Analyst at The Centre for Independent Studies. She is available for comment.