Australia: What will the Australian Charities and Not-For-Profits Commission look like? Final report on NFP Regulator released

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:

1. the governance and transparency of all NFPs;
2. determining the NFP status of entities, including charities and public benevolent institutions;
3. producing educational materials for the sector, phone assistance and referral services; and
4. 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 Government.

Definition of "charity"

The definition will be harmonised across all Australian jurisdictions and will be based on the:

1. 2001 Charities Definition Inquiry;
2. the 2010 Senate Inquiry into the Tax Law Amendment (Public Benefit Test) Bill 2010; and
3. findings of recent judicial decisions.

The Government is to undertake further consultation in relation to the definition of charity.

Information Portal

A public information portal will be created for registered entities that will be operated in consultation with the Australian Business Register.

The information portal will hold information such as:

1. income and expenditure;
2. financial history;
3. annual reports;
4. trustees reports; and
5. 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.

A copy of the Final Report is available here.

For more information, please contact:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.