Senator Penny Wong, the Minister for Finance and Deregulation, has announced that the Federal Government will introduce the Not-for-Profit Sector Freedom to Advocate Bill 2013 (the “no gag clause” bill) in the next sitting of Parliament. This change is intended to remove any threat of Federal funding being stopped to NFPs that engage in advocacy. The announcement was made in a speech Senator Wong delivered on 4 March 2013 at the UnitingCare NFP Forum in Brisbane.

In September last year, the Federal Government announced that it will move to ban gag clauses in Commonwealth contracts with the NFP sector.1 It now looks like this will come to fruition with the recent announcement by Senator Wong.

‘Gag clauses’ refer to the condition placed on NFPs that in order to receive government funding the NFP will not engage in any advocacy for State and or Federal government change.

The Not-for-Profit Sector Freedom to Advocate Bill 2013 will remove all gag clauses from Commonwealth contracts with the NFP sector.

In her speech, Senator Wong said that the no gag clause bill “recognise and supports the independence of the not-for-profit sector and declares that your advocacy cannot be impinged upon by the Commonwealth”.

Senator Wong said that the Federal Government will write to State and Territory leaders asking them to match the Federal Government’s commitment to no gag clauses for the NFP sector. However, it remains to be seen whether other States and Territories will in fact do the same.

Recent changes to the Commonwealth Grant Guidelines support the objectives of the no gag clause bill. Under the Commonwealth Grant Guidelines, government agencies must not use criteria in a grant application and selection processes or clauses in grant agreements which limits, prevents or bans NFPs from advocating on policy issues. The revised Commonwealth Grant Guidelines are to take effect from 1 June 2013.

How the changes may affect you

NFPs party to any government funding agreements should be aware of any limitations to their activities imposed under those agreements, including whether any gag clauses currently apply to that NFP.