COAG has established a NFP Reform Working Group to
develop an effective approach to the regulation of the NFP sector
and reducing the regulatory burden on the sector where
At their most recent meeting earlier this month, the Council of
Australian Governments (COAG) agreed to take the first steps
towards developing an effective approach to regulation of the
not-for-profit sector and reducing the regulatory burden on the
sector where possible.
What's already happened
The Commonwealth Government has previously announced
far-reaching reforms for NFPs, including:
the establishment of a national regulator, the Australian
Charities and Not-for-profits Commission (ACNC), which is now
scheduled for 1 October 2012;
reform of the governance principles applying to NFPs, both to
remove unnecessary burdens and to promote good governance,
accountability and transparency, with commencement to coincide with
the establishment of the ACNC;
reform of the tax concessions available to NFPs for their
unrelated commercial activities, to commence on 1 July 2012;
restating the "in Australia" special condition for
tax concession entities to ensure that generally such entities must
be operated principally in Australia and for the broad benefit of
the Australian community;
the introduction of a statutory definition of
"charity", which will take effect from 1 July 2013 and
replace the common law definition;
negotiation with the States and Territories for the development
of a national approach to charitable fundraising regulation (which
is currently regulated differently in every State and Territory);
review of the company limited by guarantee structure and its
continuing appropriateness for NFP entities.
The Commonwealth Government has acknowledged that the regulatory
overlap between Commonwealth, State and Territory jurisdictions has
resulted in a high regulatory burden for NFPs, and has stated its
commitment to progress national regulation through COAG.
COAG's NFP Reform Working Group
COAG has now established a NFP Reform Working Group and has
endorsed the terms of reference, work plan and initial milestones
for the group. COAG has asked the NFP Reform Working Group to
review, develop and recommend NFP regulatory reform options to
considering the adoption or application of a Commonwealth
statutory definition of "charity" for State and Territory
developing a nationally consistent approach to fundraising
reviewing legal, governance and reporting regulation for the
NFP sector; and
considering approaches to harmonise the test for determining
non-charitable activities of charities.
The NFP Reform Working Group will report to COAG at or before
its next meeting, and before the Australian Charities and
Not-for-profits Commission Bill is introduced into Federal
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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