Government response to the recommendations of the ACNC Legislation Review
March 2020 | News | Alex Milner
The Federal Government today released its response to the recommendations of the ACNC Legislation Review (Government Response to the Australian Charities and Not-For-Profits Commission Legislation Review 2018, 6 March 2020). The report of the review panel had been tabled in Parliament in August 2018.
Updated 20 March, 2020
Some of the key responses of interest to many of our clients in the charitable and NFP sector are:
- No change to the ACNC’s legislative objects, nor amendments of the ACNC’s functions and duties to better align with the current objects;
- Retention of the ACNC’s power to remove or replace a responsible person (for registered charities which are not basic religious charities), but with the addition of mandated criteria that the Commissioner must consider before exercising such powers and allowing both registered charity and the responsible person the right to appeal;
- Retention of Governance Standards 3 (compliance with certain Australian laws);
- Further consultation with the sector on the merits and risks of “turning on” the director’s duties under the Corporations Act 2001 (Cth) for registered charities which are also companies;
- Further consultation with States and Territories on the appropriate level of revenue thresholds for minimum reporting requirements; however, if these thresholds are changed, there will be an additional requirement introduced for large registered entities with two or more key management personnel to disclose remuneration paid to responsible persons and senior executives on an aggregated basis;
- Amendment of the Annual Information Statement for small charities to allow them to provide a simplified balance sheet or a statement of resources (particularly helpful for small charities which currently use cash accounting);
- Increased disclosure by registered charities of “related party” transactions;
- No plans to review the exemptions for basic religious charities;
- Amendments to the secrecy provisions of the ACNC Act to give the Commissioner power to disclose information about regulatory activities (including investigations);
- Amendments to authorise the Commissioner to request details on the criminal records of responsible persons and to disqualify a person from being a responsible person if they have a conviction of particular crimes including terrorism, money laundering and fraud;
- Rejection of the proposal to expand the Australian Consumer Law (ACL) as a mechanism to harmonise fundraising laws in the NFP sector; and
- Rejection of the recommendation that a registered entity should be presumed to comply with the ACNC governance standards if it already complies with other comparable governance requirements (ie ACFID Code).
We are currently reviewing the Government’s report further. We intend to publish updates in the future once proposed or exposure draft legislation becomes available.
A copy of the Government Response is available here: https://treasury.gov.au/sites/default/files/2020-03/p2020-61958-govt-response.pdf
A copy of the Review Panel’s report is available here: https://treasury.gov.au/publication/p2018-t318031