A Framework for Charity Regulation in Australia

On 9 December 2011, Treasury released an exposure draft for legislation establishing the Australian Charities and Not for Profits Commission (ACNC), which will commence operations on 1 July 2012.  At the same time, the ACNC Implementation Taskforce has also released a discussion paper seeking input on administrative issues including the content of approved forms and the ACNC website, and what education the ACNC should provide. 
The exposure draft must be read in the context broader not-for-profit (NFP) sector reforms, and in particular, the consultation on governance released on 8 December 2011 (see our update here).
The exposure draft and the discussion paper can both be accessed here. The exposure draft and discussion paper address isues of registration, compliance and enforcement.

Registration with the ACNC allows charities and NFPs to access government support, including tax concessions previously accessed through endorsement from the ATO.  The proposed registration requirements include governance requirements to be met by charities and NFPs.  Existing charities endorsed by the ATO as exempt from income tax will not need to re-register to be a charity under the ACNC.

Compliance: A framework for reporting
Charities and NFPs will be required to report to the ACNC on a 3-tiered reporting structure for small, medium and large organisations.  All organisations will be required to provide information to the ACNC on an annual basis, comprising financial information and activities statements.
The framework resembles the current tiered reporting structure for charities and NFPs incorporated as companies limited by guarantee under the Corporations Act 2001 (Cth) framework, but impose broader and more detailed reporting requirements depending on the size of the organisation.
Enforcement: Monitoring, investigation and active enforcement
The exposure draft provides the ACNC with broad powers to ensure that the appropriate measures are available to the ACNC to address compliance issues with a view to promoting public trust and confidence in charities and NFPs.  These powers include:
  • Investigation and intervention powers enabling the ACNC to monitor compliance
  • Enforcement powers to compel compliance and protect charitable purposes including power to enter into undertakings; directions to do certain actions; revocation of registration; power to suspend, remove or appoint trustees or other responsible individuals; apply to courts for injunctions; and impose fines.
Submissions on the exposure draft to Treasury are due 27 February 2012.  The ACNC commences on 1 July 2012.
Gadens Lawyers is able to:
  • advise charities and NFP organisations seeking to make a submission to Treasury on the exposure draft
  • assist existing charities and NFP organisations seeking to assess the implications of the new compliance requirements, to ensure a smooth transition to commence reporting. 

This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.



This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.