The Federal Government, through the Department of Social Services, has released an Options Paper setting out options for the replacement of the Australian Charities and Not-for-profits Commission (ACNC).
Based on the Government’s premise that the abolition of the ACNC will remove unnecessary regulation, the Options Paper assumes the return of the primary functions of the ACNC to the Australian Taxation Office (ATO) and the Australian Securities and Investment Commission (ASIC).
The Options Paper is divided into the following four primary sections:
A key element of these changes will be the requirement for all charities to maintain a publicly accessible website, which will detail the names of responsible persons (presumably using the ACNC definition), funding received from Government (any of the three tiers) and financial reports (but only for such charities as would be required to produce such reports under current regulations). ASIC would also assume the powers relating to reporting obligations previously transferred to the ACNC, such as collecting directors and company secretary details.
As anticipated, it is proposed that responsibility for determining eligibility for charitable status and related tax concessions will be returned to the ATO, which is expected to establish a dedicated unit and provide a mechanism for an appeals process.
The abolition of the ACNC will also see a return to the compliance framework in place prior to the establishment of the ACNC, being a mix of ASIC, ATO and State and Territory regulatory bodies.
Upon the passing of the legislation abolishing the ACNC, the ATO and ASIC will resume their previous roles but charities will have until 1 July 2015 to ensure their websites comply with the information requirements.
Written submissions relating to the Options Paper can be provided to the Department of Social Services via its website up to 20 August 2014.
Heather Watson, Partner, comments “For many within the charities sector, the abolition of the ACNC will be seen as a ‘back to the future’ moment and will be a lost opportunity for the sector to have a single and dedicated regulator and voice. Nevertheless, the changes in the Option Paper appear to be destined to occur and it is important for all participants that they are aware of the changes and are ready for their implementation.”