| The story so far... |
As announced in the 2011 Federal Budget in May of this year, the Government has embarked on the process of reforming the law and regulation of charities and not for profit organisations in Australia. The initial stages of this reform process involve:
- The establishment of the Australian Charities and Not for Profits Commission, to become the regulator of charities and ultimately all not for profits and commence operation from 1 July 2012 – this process is well underway with the establishment of a taskforce headed by Susan Pascoe AM. It is expected that exposure draft legislation to establish the Commission will be released for consultation between now and the end of the year;
- The better targeting of tax concessions, to remove tax concessions for not for profit entities that engage in unrelated commercial activities where the profits from those activities are not directed back to their altruistic purpose. In this regard a consultation process occurred during June and ongoing consultation has occurred since this date through Treasury and the Nonprofit Reform Council. It is expected that exposure draft legislation for these reforms will be released between now and the end of the year; and
- The introduction of a statutory definition of ‘charity’.
Concurrent with this process, the Government has also been reforming the regulation of public ancillary funds, for which legislation is currently before the senate, and released exposure draft legislation on the ‘In Australia’ special conditions – a second draft is expected between now and the end of the year. Further information about the reform process and Treasury’s timetable can be found their Newsletter, released on 14 October 2011.
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| Latest Developments |
On 28 October 2011, Treasury released a consultation paper ‘A Definition of Charity’, seeking public views of possible approaches to introduce a statutory definition of charity. At the same time, Treasury released a fact sheet on the consultation paper. The consultation paper poses 20 questions for consideration and also allows for further concerns to be raised. |
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Broadly, the main issues raised in the consultation paper are:
- the use of the rejected Charities Bill 2003 as the starting point for the definition;
- the concept of dominant charitable purpose, and whether it should in fact be an exclusively charitable purpose;
- in relation to the requirement that charities are for the public benefit, the removal of the presumption of public benefit in respect of charities for the relief of poverty, charities for the advancement of education and charities for the advancement of religion;
- the definition of what constitutes a public benefit;
- the requirement that all activities of a charity are in furtherance of their charitable purpose – and the relationship of this measure with the better targeting of tax concessions measures;
- what constitutes disqualifying activities and the impact of illegal activities; and
- what purposes will be considered to be charitable.
Responses to the consultation paper are due on 9 December 2011. Treasury expects to release exposure draft legislation in respect of these measures in early 2012. Treasury is engaging in private consultation with a number of technical experts from the sector, including, from Prolegis Lawyers, Anne Robinson (Solicitor Director and a member of the Nonprofit Reform Council) and John King (Consultant and member of the Australian Taxation Office Public Rulings Panel).
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| Our response |
Prolegis Lawyers is preparing submissions on behalf of our clients in response to the consultation paper. If your organisation is considering lodging a submission in response to the consultation paper and would like our assistance, please call Prolegis Lawyers on 02 9466 5222 or email Anne Robinson, John King or Claire Jones so that we might continue the discussion. Prolegis Lawyers has been, and will continue to be, involved in consultation with Treasury in each stage of the reform process and is committed to advocating for our clients in the hope that the reforms adopted will strengthen and empower the sector to continue to provide the services it provides, to the benefit of the Australian Community. |
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Last Updated on Wednesday, 02 November 2011 05:56 |
