Australian Charities Bill 2013

On June 29th the Charities Bill 2013 gained royal assent in Australia, and is now law.

The bill has been closely followed by Dialogue Ireland for two reasons. First, this bill arguably had its roots in Scientology abuses and, secondly, we believe it represents an excellent model for other nations on the regulation of charitable entities.

Prior to the Charities Bill 2013, Australian authorities had over the years conducted various reviews which looked at components of the charitable sector. These included the Industry Commission Inquiry Report in 1995, which looked in depth at the entire Australian charitable regulatory structure as well as researching the charities themselves, and the Contribution of the Not-for-Profit Sector in 2010, which looked at the role that charities played within Australia’s cultural and economic landscape.

The incentive for following up these report’s recommendations came from a very unlikely source – the Church of Scientology. This story has its origins with Bryan Seymour, a report with the Australian news network Today Tonight. Bryan has been doing excellent reporting on Scientology for some years now, and has a gained reputation of being a no-nonsense reporter on the topic. A good example of his reporting was his investigation into how they exploit a tax loophole to avoid paying tax in the UK by claiming they are an Australian charitable corporation.

Bryan’s reputation for being a no-nonsense reporter on the topic has made him approachable by ex-members, and in 2009 Aaron Saxton, Kevin Mackey, Paul Schofield, Carmel and Tim Underwood, and Anna and Dean Detheridg (all ex-members) told him their stories about their time in Scientology. They also wrote to Nick Xenophon, senator for South Australia. On November 17^th, moved by the letters he had received, senator Xenophon took the extraordinary step of addressing the Australian parliament to call Scientology a ‘criminal organisation’. In a 17 minute speech he made his case against Scientology, and questioned why the Australian taxpayer should be subsidising this enterprise. You can view Bryan Seymour’s report on the topic, and here from those who wrote to senator Xenophon here (part 1) and here (part 2).

Support for an inquiry into Scientology directly did not receive the needed support in parliament, but senator Xenophon was able to secure an inquiry into a ‘Public Benefit Test’ for organisations claiming to be charitable. Under Australian common law entities claiming to be religious were assumed to be operating in the public benefit, and there was no requirement to have to demonstrate such a benefit. The fear expressed by charitable entities who made submissions to the enquiry was that, should a public benefit be introduced, the result would be onerous and needless bureaucracy which might require the diversion of resources for compliance purposes that would otherwise be used for charitable activities.

Dialogue Ireland followed the hearings in full. You can view day 1 of the submissions and day 2 of the submissions of the hearings. Much of the submissions were substantive and relevant, but we would like to draw attention to the submissions made on day 1 of the hearings by the UK Charity Commission and the New Zealand Charity Commission. These submissions, drawn from practical experience, painted a very different picture than the fears expressed by the Australian charities. While these ‘Charity Commissions’ are primarily about regulatory enforcement (including the administration of a public benefit test), they also function as a source of information and assistance for charitable organisations in both the UK and New Zealand. The existence of ‘one-stop-shops’ for charitable functions has the effect of reducing compliance costs, while allowing additional services to be delivered to charitable organisations. A single register would also increase public access to information regarding charities, helping to make the charitable sector more transparent.

It was interesting to note how, as expressed during their submission, the UK Charity Commission considered the giving of evidence to the senate hearing to be part of their remit and mission for educating and advising on charitable issues. These submissions, in addition to further consultation and a report by the Australian treasury, laid the groundwork for the creation of the Australian Charities and Not-For-Profits Commission (ACNC). 2013 represents the first year of operation for this Australian version of the Charity Commission.

The culmination of all of this is the Australian Charities Bill of 2013, which became law in June. I think senator Xenophon brief explanation sums it up best (text version here):