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Insights

Not-for-Profit Client Alert

Stage one legislation introduced to abolish the Australian Charities and Not-for-profits Commission

After months of speculation, yesterday the Federal Coalition introduced into Parliament legislation which, if enacted, will abolish the Australian Charities and Not-for-profits Commission ("ACNC").

The Australian Charities and Not-for-profits Commission (Repeal) (No. 1) Bill 2014 (Cth) ("First Bill") provides for a two-staged process to abolish the ACNC.

The First Bill will repeal the Australian Charities and Not-for-profits Commission Act 2012 (Cth) and provide transitional arrangements to transfer records, outstanding investigations and certain annual reporting requirements to a "successor agency".  However, the First Bill will not commence until the introduction and enactment of a second Bill, which will provide detailed transitional arrangements to replace the ACNC.  The Explanatory Memorandum to the First Bill envisages the establishment of the National Centre for Excellence.

At the moment, we have limited information about the transition arrangements which will follow the dissolution of the ACNC.  The Minister would determine the "successor agency" under the First Bill, but there is no indication of which agency that might be.  We speculate that the Australian Taxation Office or Australian Securities and Investments Commission will be responsible for matters relating to charitable tax endorsements and governance respectively.

It appears that the real purpose of the First Bill is for the Coalition to affirm its intention to abolish the ACNC, while it consults with stakeholders regarding the legislative and administrative issues involved in winding down and replacing the ACNC.

Given that Labor and the Greens have expressed their intention to oppose any plan to abolish the ACNC, it is unlikely that the First Bill or any related legislation (including legislation to repeal the statutory definition of "charity" under the Charities Act 2013 (Cth)) will pass the Senate before 30 June 2014.  Further, with the Western Australia Senate re-election it remains to be seen whether the Bill will be passed from 1 July 2014.

To view the First Bill and Explanatory Memorandum, click here.

If you have any questions, please contact Michael Gorton, Solomon Miller, Jonathan Teh or Daniel Bell.