Yesterday, the Federal Government introduced a Bill into Parliament to abolish the Australian Charities and Not-for-Profits Commission (ACNC).
The Australian Charities and Not-for-Profits Commission (Repeal) (No 1) Bill 2014 will be debated in next week’s sitting of Parliament. You can read the Bill, associated explanatory material, and the Minister’s speech here.
Two-part repeal; return of functions to ASIC and ATO
The Bill is the first of a proposed two linked Bills. This first Bill would repeal the ACNC legislation in its entirety. The second Bill, which is yet to be released, will detail arrangements for transfer of ACNC functions to other agencies. The explanatory material confirms that functions of ASIC and the ATO ‘previously transferred to the ACNC …will return to those bodies’. This is likely to mean that:
- the ATO will be responsible for determining charity status; and
- elements of the Corporations Act 2001 ‘turned off’ by the ACNC legislation, relating to directors’ duties and reporting to ASIC, will be reinstated.
Other roles may be given to other agencies at the Minister’s sole discretion, including a proposed new ‘National Centre for Excellence’.
The Federal Government appears committed to its policy of removing the ACNC and returning its functions to the ATO and ASIC. The explanatory material released with the Bill states that ‘[a]s this proposal is implementing an election commitment, there is no requirement to examine alternative options’.
Possible consultation on future second Bill?
There is some suggestion that some kind of consultation might take place on the finer details of the transfer of functions from the ACNC to other bodies, but it is not clear what form this would take.
When would it take effect?
This first Bill to abolish the ACNC would not come into force until the second Bill, setting up transfer arrangements, has been introduced and passed.
What does this mean for my charity?
- Charities should remember that reporting obligations to the ACNC remain in force and will continue until and unless the ACNC is abolished.
- Keep up to date with the progress of the legislation; the repeal Bill is likely to be passed by the current Senate. The upcoming fresh elections for Western Australia Senators may prove decisive in determining the fate of the ACNC after September 2014.
I’m still confused!
There have been many changes to the laws affecting Australian charities in the last two years. It can be hard to keep up! If you are feeling overwhelmed by the changes and you would like legal advice to help you navigate the evolving landscape of the law, call us on (07) 3837 3600 or send us an email at reception@ntlawyers.com.au.
DISCLAIMER: This update contains general information only and should not be considered legal advice. You should always obtain legal advice for your specific circumstances before relying on general information.