In our January 2011 update, we reported on the Treasury
Consultation for a national Not-For-Profit (NFP)
Regulator (a copy of this article can be accessed here).
Following the announcement in the Federal Budget 2011-2012 to
create the Australian Charities and Not-For-Profits Commission, the
Assistant Treasurer released its Final Report on the consultation
on 4 July 2011.
The Final Report makes findings from the responses of
stakeholders to the consultation and makes recommendations for the
national NFP regulator.
Some of the key recommendations in the final report are:
Scope of National Regulator
The final report proposes that the national regulator will be
responsible for things such as:
the governance and transparency of all NFPs;
determining the NFP status of entities, including charities and
public benevolent institutions;
producing educational materials for the sector, phone
assistance and referral services; and
educating the public about the sector.
Once introduced, all entities will need to be registered by the
regulator to gain support and subsequently concessions from the
Definition of "charity"
The definition will be harmonised across all Australian
jurisdictions and will be based on the:
2001 Charities Definition Inquiry;
the 2010 Senate Inquiry into the Tax Law Amendment (Public
Benefit Test) Bill 2010; and
findings of recent judicial decisions.
The Government is to undertake further consultation in relation
to the definition of charity.
A public information portal will be created for registered
entities that will be operated in consultation with the Australian
The information portal will hold information such as:
income and expenditure;
trustees reports; and
details of those managing the entities.
These recommendations signal a move toward the regulator playing
an educating role for the sector similar to the Charities
Commissions of New Zealand and the United Kingdom respectively.
Funding of a national NFP regulator
NFP's may need to pay a fee once they are brought into the
new framework. It has not yet been determined how much the fee will
be or whether it will replace existing fees payable by NFPs.
There is not yet any confirmation that the recommendations put
forward by The Treasury will be adopted.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
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