The planned abolition of the Australian Charities and Not for Profit Commission and how this might unfold in 2014.

The Australian Federal Government has confirmed its plans to abolish the Australian Charities and Not for Profits Commission (ACNC).

The decision is an about-face for regulation of the sector. 

The ACNC had been established by the former Labor government with a view to enhancing accountability and improving standards of governance in the charities and not-for-profits sector. 

However critics of the Commission have cited unnecessary red tape, compliance costs and government intrusion as grounds for the abolition.

In practical terms, the decision involves a delay to the commencement of the Charities Act 2013 by 9 months to 1 September 2014. The Charities Act 2013 contains a definition of “charity” and “charitable purpose”, an issue that has been difficult and controversial to resolve. 

The Government has said that it will instead establish a centre for excellence and a possible national register for charities, and it may also consider voluntary regulation for the sector rather than Government sanctioned regulation.

The decision is frustrating for charities and not for profits who have expended resources in ensuring they are compliant with the soon to be defunct regulatory regime, however, the removal of cumbersome ongoing compliance requirements may be a positive.