Summary - The Commonwealth Labor Government
intends to ban gag clauses in Commonwealth contracts with
On 19 September 2012 the Commonwealth Labor Government announced
its intention to introduce legislation to ban so-called
"gag" clauses in Commonwealth contracts with the
The introduction of legislation to expressly ban the use of gag
clauses which are considered to censor public debate is a move
which will no doubt be welcomed by the Not-For-Profit sector as a
critical part of the current reform process and the strengthening
of the independence of the Not-For-Profit sector in Australia.
The use of gag clauses in Commonwealth contracts has long been a
controversial issue since it was introduced by the Howard
Government. While in 2008 the Federal Labour Government removed gag
clauses from existing contracts between the Commonwealth Government
and Not-For-Profits which restricted those Not-For-Profits from
engaging in policy and political debate, the contentious measure
has recently been resurrected by the Newman Government in
It is indeed a positive development to see that the current
Federal Government sees the importance of officially banning these
clauses from Commonwealth contracts.
The Government is making this move as a way of ensuring
"ongoing positive engagement and open debate between the
Federal Government and the [Not-For-Profit] sector" according
to the 19 September 2012 joint
Media Release from the relevant Ministers. The Labor Government
sees this reform as an important change to reflect the fact that
the Not-For-Profit sector is "a key partner in developing and
delivering major policy reform and creating opportunities for all
The new legislation will undoubtedly build on the current
reforms to the Not-For-Profit sector, including the new Australian
Charities and Not-For-Profits Commission (ACNC). With approximately
600,000 organisations making up the Not-For-Profit sector and
accounting for 8% of national employment, the reforms recognise the
important role that the Not-For-Profit sector has in advising and
developing public policy and advocating on behalf of the
communities the sector serves.
We look forward to seeing the detail of the proposed legislation
and the scope of the protections it will afford. Hopefully the
Government will move speedily to legislate this reform as part of
the bundle of reforms currently before Federal Parliament.
The capacity for Not-For-Profits to speak out, contribute to
policy development and advocate for their causes without being
afraid of losing their funding is paramount to an effective and
independent Not-For-Profit sector in Australia. Ultimately, this
reform can only assist the Not-For-Profit sector in achieving
positive change in their communities by allowing their voices to be
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On 12th November 2016, new laws will commence to protect small businesses from unfair terms in standard form contracts.
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