NFP sector on tenterhooks

 The federal government’s plans for an omnibus bill to cut red tape will have serious implications for the not-for-profit sector, according to the director of Curtin University’s not-for-profit initiative.

David Gilchrist is calling for the government to rethink dumping two pieces of legislation that have been in effect for less than 18 months.

Mr Gilchrist said growing uncertainty about the effects on the sector of the government’s actions was already being felt among NFP organisations.

Abolishing the regulatory body Australian Charities and Not for Profits Commission (ACNC) is one part of the omnibus bill expected to be introduced to parliament on Wednesday ahead of what has been called ‘repeal day’ on March 26.

Social Services Minister Kevin Andrews has also indicated the legislation will abolish the Charities Act, which came into effect on January 1.

The Act provides a common law definition of a charity, which Mr Gilchrist said was a rare example of clarity being introduced to an increasingly uncertain sector.

“(The Act) makes it much more comprehensive and much more clear, particularly for non-legal people in the not-for-profit sector being able to work out whether they’re doing the right thing or not,” Mr Gilchrist told Business News.

“While people say the Act has some flaws to it, obviously acts and laws evolve over time and there’s room for improvement.”

Mr Gilchrist said removing the Act was short-sighted, as was the plan to abolish the ACNC, which had been operating for just over a year and required organisations to file information annually.

“While the ACNC has added to some red tape requirements … we need to look at this with a medium to long-term view,” he said.

“A five-year timeframe is much more thoughtful and useful … if you simply knock things on the head because they haven’t achieved their goal in 12 months, that’s pretty short-sighted.”

The NFP sector is estimated to be worth about $43 billion annually, and running the ACNC costs about $14 million, which Mr Gilchrist said was extremely cost effective.

He said increasing uncertainty was reducing the talent pool of people willing to join NFP boards.

“Our research points to directors feeling much more responsible and (their involvement) being much more onerous than before,” Mr Gilchrist said.

“That sense of onerousness means that people don’t want to be directors so much anymore and, while it’s always been hard to recruit good people to boards, I think it’s becoming increasingly difficult.”

He said organisations in the sector didn’t have the necessary resources to speak out and so were at the mercy of politically motivated changes in legislation.

“I think this set of issues needs to be approached apolitically; it’s not an area where it’s good to have two sides of politics shirt-fronting each other and second-guessing,” Mr Gilchrist said.

“I would love to see a focus on what’s needed and an apolitical response to that as far as both regulation and support go.”

He said such a response, particularly with regulation, could help improve the transparency of the sector, which was needed to encourage philanthropy funding.