Summary - The ACT has followed the move by South Australia to sign up to the ACNC legislative framework. Who will be next?
It has been announced that the Australian Capital Territory (ACT) will be signing up to the Australian Charities and Not-For-Profit Commission (ACNC) regulatory framework by making changes which will carve out the charities registered by the ACNC from regulatory requirements under relevant ACT legislation.
The ACT is the second Australian State or Territory to sign up to the ACNC regulatory framework after South Australia became the first in October 2012 to announce that it would also progress changes to align its regulatory framework for incorporated associations and fundraising with the ACNC.
In accordance with regulations before Parliament most charities registered with the ACNC must comply with certain standards (Governance Standards) in order to maintain registration under the Australian Charities & Not-For-Profits Commission Act 2012 (the Act). Of particular importance is Governance Standard 5 which closely reflects a number of obligations presently imposed on charities registered as incorporated associations under relevant State & Territory enacted legislation.
There is therefore an obvious concern that, when the transition period expires on 1 July 2017 and most charities must comply with Governance Standard 5, many charities will be required to comply with two sets of similar reporting standards resulting in duplication and excess red tape.
Each State and Territory may develop measures to address these issues of duplication and the announcement by South Australia and more recently the ACT is positive news for the Not-For-Profit (NFP) sector which has long been calling for a streamlined national regulatory framework, rather than the complex and fragmented system that has been allowed to develop over time in an ad hoc manner. It will be interesting to see if any more States and the Northern Territory also sign up to the ACNC legislative framework.
The cornerstone of the Government's reform of the NFP sector is the ACNC which as the first national regulator for charities in Australia is seen as the first step to building a more streamlined approach to NFP regulation. The ACNC registers and regulates charities seeking Commonwealth support including access to tax concessions and other Commonwealth exemptions, concessions and benefits. It is also developing a "Charity Passport" as a mechanism to share information across Commonwealth government departments and reduce duplicated reporting.
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