The House Standing Committee on Economics has now invited
interested persons and organisations to make submissions addressing
the terms of reference by Friday, 20 July 2012.
We have reviewed the draft legislation and make the following
The proposed Bill is a considerable improvement upon the prior
In particular, it recognises the special role played by small
religious charities in the Not-For-Profit sector and relieves them
from some onerous and burdensome requirements. The draft
legislation creates a new concept of a "basic religious
charity". Section 205-35 of the proposed Bill sets out the
criteria required to be satisfied to qualify as a "basic
The monitoring and enforcement powers of the ACNC have been
reduced and redefined. However, the trigger for the Commissioner is
still based on the undefined and vague concept of promoting
"public trust and confidence" in charities. We submit
that this should be narrowed to focus on ensuring management of tax
payer funds that Not-For-Profit organisations utilise by way of
relevant tax concessions. We have not noted any reduction in
"public trust and confidence" of charities.
Until such time as agreement can be reached with the States and
Territories, the stated ideal of the reduction in red tape is
unlikely to be realised. In fact, in the short term it is likely
that there will be an increase in reporting requirements.
It is no longer necessary for medium registered entities (ie
revenue between $250,000.00 and $1 million pa) to have their
financial statements reviewed by a registered auditor –
these may now be performed by a member of a professional accounting
body. This is likely to result in some savings for those medium
The Bill allows for collective and joint reporting for annual
information statements, annual financial reports or both.
Unfortunately, the governance requirements have not been
specified in the Bill but will be subject to regulation. When the
regulations are made, these standards will apply from 1 July
The first financial report required for medium and large
entities will relate to the 2013-14 financial year and will need to
be lodged by 31 December 2014.
The first annual information statement will relate to the
2012-13 financial year and will need to be lodged by 31 December
2013. Registered entities may apply to the ACNC Commissioner to
report on the basis of the substituted accounting period and some
entities which are required to report under an Australian law for a
substituted accounting period (eg educational institutions), will
have their substituted accounting period grand-fathered.
The Bill is extensive and we recommend that Charities and
Not-For-Profits review its contents in detail. Should we be able to
assist in this regard, please do not hesitate to contact Mr Bill
d'Apice of our office.
Submissions to the Committee can be lodged by email to firstname.lastname@example.org
by Friday, 20 July 2012. The Committee has prepared a
Brochure to assist people in preparing a submission should this
be of assistance to you.
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