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Government Cuts “Red Tape” For Charities In Response To ACNC Review

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The Australian Government has recently issued its response to a legislation review undertaken by the Australian Charities and Not-for-profits Commission (ACNC) titled ‘Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislative Review 2018’ and released on 22 August 2018 (ACNC Review). The final report published as part of the ACNC Review made 30 recommendations for Government to consider.  

The Government’s response was founded upon the need to support the ACNC as a regulator of Australian charities and other not-for-profit entities, to reduce the complex “red tape” in this industry and to strengthen trust between the ACNC and the Australian public. Of importance is the Government’s decision to:  

  • modify in close consultation with states and territories, the current revenue thresholds for determining minimum reporting requirements to require fewer charities to provide financial reports;

  • simplify the minimum reporting requirements for small registered entities to allow for descriptions of assets to be provided in the entity’s Annual Information Statement by way of a statement of resources, as opposed to the current requirement for balance sheet reporting;

  • mandate the disclosure of related party transactions by all entities registered with the ACNC. For small registered entities this will involve making a simplified disclosure with brief details of the relevant transaction with a related party;

  • mandate a large registered entity’s disclosure of remuneration paid to any responsible persons and senior executives on an aggregated basis, where the relevant large entity has two or more key management personnel; and

  • extend the disqualifying criteria for responsible persons under the Australian Charities and Not-for-profits Commission Regulation 2013 to any individuals with a conviction for terrorism, terrorism financing, money laundering, fraud, importation or distribution of illicit drugs or a child sexual offence under Australian Commonwealth, state or territory law.

Other noteworthy items included the ACNC’s recommendation for a single, national scheme for charities and not-for-profits throughout Australia, and increased information sharing with the Australian Criminal Intelligence Commission. Whilst the Government supported the latter recommendation, it merely noted the ACNC’s recommendation for a unified scheme and highlighted its continual efforts to work closely with states and territories regarding the streamlining of reporting requirements, regulatory burden (including, for example the use of cross-border recognition arrangements) and a single, harmonised definition of “charity” across jurisdictions to replace 45 existing definitions.  

To discuss further or for more information please contact:

Henri Sheridan
Graduate Lawyer
T +61 3 9611 0194
hsheridan@sladen.com.au

Daniel Smedley
Principal | Accredited Specialist in Tax Law
M +61 411 319 327|  T +61 3 9611 0105
E: dsmedley@sladen.com.au

Daniel Smedley