House debates

Tuesday, 18 June 2013


Charities Bill 2013; Second Reading

4:42 pm

Photo of Bert Van ManenBert Van Manen (Forde, Liberal Party) Share this | | Hansard source

I have the pleasure to rise this afternoon to speak on the Charities Bill 2013 and the Charities (Consequential Amendments and Transitional Provisions) Bill 2013. For some 400 years the definition of charity has been recognised through common law but today this bill seeks to introduce a definition of charity and charitable purpose from 1 January 2014 across all Commonwealth legislation and to enshrine it in statute. These changes, as with many other changes we see from this government, risk disadvantaging the very charities that we are seeking to support and creating a new wave of legal disputes and test cases at great cost to the sector and ultimately of no benefit to our communities.

Currently, charitable purposes are commonly categorised, following the terminology of the Commissioners for Special Purposes of Income Tax v Pemsel rulings as the four 'heads of charity'. These are: the relief of poverty; the advancement of education; the advancement of religion; and other purposes beneficial to the community. For a purpose to be charitable within the legal meaning under the common law, the purpose must be within the 'spirit and intendment' of the Statute of Elizabeth, and for the public benefit.

But now we see a change in all of that. The government say that they want to provide greater clarity and certainty for charities, the public and regulators in determining whether an entity is charitable—because they obviously do not believe in the people, the unpaid workers and volunteers who run these organisations. Through trying to provide 'greater clarity', the proposed amendment to the charitable purposes has been changed from the four 'heads of charity' to a list of 12. I do not know how that provides any greater clarity, so let us go through them for the sake of discussion:

                          That is wonderfully clear. When I examined this legislation, one of the biggest issues I had, particularly because there are many people in the electorate of Forde relying heavily on this particular form of charity at present, was that nowhere in this legislation was the issue of housing reflected and it failed to list it as a defined charitable purpose.

                          Just this week, an article in the Albert & Logan News highlighted the issue of homelessness and the need for housing. The article stated:

                          TEN homeless people a week are being turned away at a Waterford homeless shelter before the harshest period of winter even begins.

                          The general manager, Jason Loakes, said that homeless people are trying to injure themselves, to get into a warm hospital bed, or are committing petty crimes to get a jail cell for the night. I spoke today to Lisa Loakes, the director of this not-for-profit shelter, Sheltered by Grace. She said that, unfortunately, at this time of year this happens. It is true that they have had to turn away at least 10 people on average each week. In Lisa's own words she described the Labor government's fiddling with the charity sector as a 'red-tape bonanza.' She said that the doubling-up of paperwork is unnecessary. She said that the fiddling with charitable purposes does not make any sense. Under existing charitable purposes 'housing' would sit under 'the relief of poverty' but under the new purpose guidelines the only place she could see where it could possibly fit was under 'advancing social or public welfare.' Lisa went on:

                          In many cases, advancing social or public welfare can only come after the relief of poverty. I don't believe that in Australia we are at the level of advancing social or public welfare. Changing the focus or not putting enough emphasis on preventing or relieving poverty, distress or disadvantage and instead focusing on "advancing" social or public welfare is not enough.

                          Lisa also went on to comment about some of the features of the new definitions. One of those was:

                          An entity must have only charitable purposes and must not have an independent, non-charitable purpose. An entity may have incidental or ancillary purposes that may be non-charitable when viewed in isolation but which must aid or further the charitable purpose.

                          Lisa commented on this particular provision:

                          Sometimes the independent, non-charitable component will actually fund or prop up the charitable purposes—there is a need to use discretion here so as not to stymy or restrict the work that NFP


                          can actually do.

                          Another definition:

                          The purpose of preventing and relieving sickness, disease or human suffering, the purpose of advancing education, the purpose of relieving the poverty, distress or disadvantage of individuals or families, the purpose of caring for and supporting the aged or people with disabilities, and the purpose of advancing religion are presumed as being for the public benefit, unless there is evidence to the contrary.

                          Lisa further commented:

                          There is a need to ensure that the definition incorporates the housing of individuals at risk of homelessness or domestic violence. Safe and appropriate housing is the first step in relieving poverty, distress or disadvantage and it may need to be listed independently to ensure that it is included in the new definition.

                          I am sure that Lisa would much rather be spending her time working on fundraising towards the $100,000 goal to expand the shelter to be able to provide more services but, as I have touched on and as we saw with the Australian Charities and Not-for-profits Commission Bill 2012, this sector is getting buried in more and more red tape.

                          A spokesman from the Salvation Army in Beenleigh was also quoted in this article in the Albert & Logan News, saying that over the past weekend she had been contacted by three families looking for accommodation. She was only able to find one of those families a home because nearby facilities were stretched ahead of winter.

                          She said, 'Most families are really only a pay packet away from homelessness' and she is not the only person in the electorate of Forde to tell me that.

                          It is people such as Lisa and the wonderful volunteers at Sheltered by Grace who are part of a terrific community of volunteer workers in Forde. They include organisations such as Nightlight, NAPCAN, Helping out Children, Fishers of Men, the Queensland Youth Housing Coalition, Eagleby Salvation Army, Soroptomist, local Lions Clubs, Rotary, the Eagleby Community Association, the Benevolent Society, St Vincent de Paul, On the Edge, Rosies, Quota, Junior Quota, Beenleigh PCYC, Tudor Park PCYC, local Probus clubs, Neighbourhood Watch, Beenleigh Scouts and the Loganlea Community Centre.

                          It is these organisations that provide such tremendous services in our community to those who are struggling. Our local food welfare services include Lighthouse Calvary Care, the Twin Rivers Centre, the Soul Centre, Upper Coomera Community Pantry and Centro Care. Together these organisations support hundreds of locals doing it tough.

                          I would like to take this opportunity to thank all of the wonderful volunteers of these organisations and many others for being the backbone of our local charities and the saviours of those who are less fortunate. Without their dedication, selflessness and devotion to improving the lives of others, the community as a whole would suffer.

                          As we have seen frequently over the past six years, we face a Labor government that believes in big government and small communities. Yet there is an alternative: the coalition side of politics, where we believe in small government and big communities. I remain passionate about continuing to work out how we can all get these wonderful community organisations and charities together in our community so we can continue to identify and solve problems as they arise—hopefully without the need for the government to get involved. But, as we have seen with the legislation last year and this bill today, we keep facing hurdles of increased red tape at the very time when these organisations are working their hardest to solve the problems in our community. I call on the government not to proceed with this legislation and to allow our community and charity sectors to do the work that they are there to do: to look after and care for the needy in our community, not to get caught up in the unnecessary regulatory burden that this government keeps imposing on our community. This legislation 'appears' to be doing something for our charities; but, at the end of the day, it is not solving the problems for this sector. It is only creating more.

                          As has been said by the previous coalition speakers on this bill, we will be opposing this legislation because of the negative impact it has on the people who are doing some of the best work in our communities to fix up problems that are being created in our communities by the failed policies of this Labor government.

                          4:54 pm

                          Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

                          Ronald Reagan famously said:

                          … government is not the solution to our problem; government is the problem.

                          That cannot be much truer than on this piece of legislation. I rise to speak on the Charities Bill 2013 and the Charities (Consequential Amendments and Transitional Provisions) Bill 2013—bills which encompass everything that is wrong with the Gillard Labor government and the general labour movement. This is bad legislation from a bad government; and, if the coalition is fortunate enough to be elected on 14 September, we will repeal it. Big, centralised government, red tape, regulation—that is what this bill is all about. It seems that not even the charities are safe from this Labor government. Our priceless volunteers are being picked on by this Labor government.

                          The definition of charity is hundreds of years old, a common law that is older than the settlement of Australia itself, and yet here we have a Labor government less than five years old that thinks it knows best about these sorts of things. It knows better than the test of time.

                          So on this side of the House we support civil society. We trust and want to empower civil society because we know how fundamentally important that is to our freedom. In the coalition we are so proud that we stand to protect the institutions that have shaped modern society as we know it today and that will support the growth of civilisation into the future.

                          If we look into the bill a little bit further we see that it 'appears' that, as part of this new charity order, opposing a political party or candidate may very well be a disqualifying purpose, the purpose mechanism being that which defines what constitutes a charity. So I pose the question: does this mean that, if a charity is to express dissatisfaction with and/or oppose a government decision, they will be disqualified as a defined charity? Our strong democracy is the root of our society. It defines what we are as a people, and we are a great people. It is of great concern that this is a government that wants to interfere with charities.

                          I am involved in a number of charities myself, including SIDS and Kids NT and the Cancer Council, and I know firsthand how important our volunteers and these charitable organisations are to our community. Charitable work is akin to freedom of speech. Charitable work is the way in which many fine people express themselves, so Labor now wants to vet them too.

                          There are extreme elements of both the Labor government and the union movement that I can see and I fear will want their hand on this disqualifying purpose. Would that be to see a charity supporting Israel perhaps refused registration under this mechanism? It is laughable for the Labor government to assure that its legislation has been designed—

                          Photo of Craig EmersonCraig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | | Hansard source

                          Mr Deputy Speaker, I rise on a point of order. I take deep offence personally and on behalf of the Australian Labor Party and ask that it be withdrawn.

                          Photo of Steve GeorganasSteve Georganas (Hindmarsh, Australian Labor Party) Share this | | Hansard source

                          What is the point of order?

                          Photo of Craig EmersonCraig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | | Hansard source

                          The point of order related to banning any charity that supports Israel. That is a disgraceful comment.

                          Photo of Steve GeorganasSteve Georganas (Hindmarsh, Australian Labor Party) Share this | | Hansard source

                          The minister will resume his seat. The member for Solomon, to assist this House, will withdraw.

                          Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

                          It is outrageous but, if it pleases the House, I will withdraw.

                          But it is laughable for the Labor government to assure us that this legislation has been designed to prevent this sort of discrimination. This bill is absolute nonsense. Big Brother's fingerprints are all over this bill. I believe it is also very important to look at the small charities—those charities that are there to support the families in Darwin and Palmerston when they need help. What is going to happen to them? Many of these small charities are run by volunteers who give up time to help vulnerable members of our community and who are now to be expected to spend time doing annual reports or audits to make it easier for the bureaucrats in Canberra to keep track of them. This is absolutely farcical.

                          What worries me most—and maybe you will have the answer, Mr Deputy Speaker—is who will decide what constitutes a charity? I see no evidence that will ensure that this person will be impartial, and even if this Labor government tell us that they are impartial, how can we trust them? If we just remember back to the failed Big Brother internet filter that Labor tried to introduce back when they were first elected, it was made up of a black list that was only meant to stop child pornography and other illegal content. Yet, somehow, a Brisbane dentist got onto that list. This Labor government have a terrible track record of implementing policies—we all know that. We just have to look at the pink batts, the cash for clunkers, the digital set-top boxes—just to name a few. The Rudd and Gillard experiments have failed. The socialist, Big Brother approach of Labor over the past five years has failed. Debt, deficit and waste—that is all they have to show for it.

                          I believe it is also important to raise the issues that will affect future generations. There is no evidence in the legislation that this bill will provide the flexibility to adapt the definition of 'charity' in the future. If a new issue were to arise in the future and individuals wished to set up a charity to provide for it, how would provisions be provided to allow the changing of this definition? The answer is that they do not know. This is yet another example of Labor's policy on the run. What I also find astounding is that Prime Minister Gillard and the Labor government would bring this piece of legislation through the parliament at this time. They are trying to rush it through, like they have done so many times before. We all remember the media reforms, do we not? This Labor government have such little faith in its own well-intentioned citizens that it cannot overlook the enormous problems confronting Australians to introduce such uncalled for laws.

                          This legislation should be consigned to the rubbish bin. Instead, the Labor government should be concentrating on reeling in their wasteful spending, securing our borders and solving their leadership tensions, so that the people of my electorate in Darwin and Palmerston can once again feel certain about their futures. But that will never happen. The election is only 88 days away and we are not even certain who will lead the Labor Party to the election. Will it be the Prime Minister, the member for Griffith or perhaps the Minister for Employment and Workplace Relations? The people of my electorate, of Darwin and Palmerston, tell me that 14 September, just 88 days away, cannot come soon enough. They are tired of the Gillard Labor government soap opera.

                          This legislation, as I said, needs to be put in the bin—just like the Labor government. Australians are looking for strong leadership and a plan. They are tired of the Gillard Labor government, which is mired in chaos and indecision, demonstrating day after day that it is hopelessly divided and dysfunctional. But there is another way: the coalition can deliver Australia with the strong, stable and accountable government that our country needs. We have a positive plan based on hope, reward and opportunity, and that plan will delivery a stronger and prosperous economy and a safe and secure future.

                          5:03 pm

                          Photo of Alan TudgeAlan Tudge (Aston, Liberal Party) Share this | | Hansard source

                          Perhaps the key difference between the coalition and the Labor Party is our view on the size and the role of government. The Labor Party, with its socialist roots, has always believed in big government. It believes that the government should be at the centre of economic activity, as Kevin Rudd has articulated, and that it should be the answer to almost every social ill in the nation. If there is a problem then government is the solution, according to the Labor Party. This view leads to a government which grows over time and reaches into almost every aspect of our society. On the other hand, the coalition believe in small government, but big individuals and big communities. Our view is that there is a role for government, but that it should be minimal in order to allow maximum freedom for individuals, for families and for communities. We firmly believe that a society is at its best when there is a strong, civic engagement from people acting voluntarily for the betterment of their community. That is the context in which we debate this bill: what the central role of government is and what the role of government is vis-a-vis the community sector. As I said, we firmly believe in fostering volunteerism and a strong civil society.

                          The name of the bill that we are debating today suggests that it is relatively inconsequential. It is called the Charities (Consequential Amendments and Transitional Provisions) Bill 2013, and I would imagine that this bill will not receive much media attention or publicity—there is virtually nobody on the Labor side of the House who is speaking on this bill or discussing it—and that there will not be much debate after the members of the coalition have spoken in relation to it. But this bill is actually immensely important and deserves considerable scrutiny, because it will impact hundreds of organisations, it will potentially have a significant impact on taxpayers and it will overturn 400 years of history.

                          For those three reasons, it is an immensely important bill that does deserve considerable scrutiny and I believe it deserves to be rejected. I am encouraged that so many people—at least in the coalition—are taking this bill very seriously and are debating it, analysing it and working out what it means for the Australian community. I must say that I am disappointed that the government has put this through without much debate or consultation, and that there is so little interest amongst the Labor members on the other side of the chamber to even speak on this bill or to put forward its particular case.

                          The bill seeks to introduce a definition of 'charity' and 'charitable purpose'. This definition would apply from 1 January next year and would apply across all Commonwealth legislation. Up until this point the definition of 'charity' has not previously been legislated in statute. Rather it has been based on 400 years of common law. It developed and evolved in a methodical manner through the common law system. The common law system over these 400 years has settled on a pretty clear definition of what a charity is. A charitable purpose is commonly characterised to fall within one of four categories: the relief of poverty, the advancement of education, the advancement of religion and for other purposes beneficial for the community. These definitions have served us well. Those four definitions were most clearly articulated in a British House of Lords case—the Commissioners for Special Purposes of Income Tax v Pemsel in 1891—and that has served us very well.

                          My key critique of this bill is that there has been no rationale as to where the problems with the current definition lie. My view is that if something is not broke we should not try to fix it. It is incumbent upon those who are putting forward a change to prove where the problem lies and to articulate how that proposal will fix that problem. This government have done no such thing. They have not come in here and outlined where the problems currently lie in relation to that 400-year-old definition of charity. They have not then gone and said, 'Due to those problems, we are going to introduce these measures which will fix those problems.' Far from it—they have introduced this relatively out-of-the-blue. They have had almost no speakers articulate the case for it and they will no doubt guillotine this bill through the parliament, as they have guillotined all the other bills over the last couple of weeks in the dying days of this parliament.

                          Why does this matter? The definition matters because if an organisation is characterised as a charity they get great privileges. Those privileges are largely financial ones. It means they do not have to pay income tax. It means they typically will not have to pay GST. Usually it leads to them having charitable status from the point of view of being able to receive donations and those donations being tax deductible. So it confers enormous financial privileges to be deemed a charity. At its essence, we as a parliament representing the people need to take great care in determining what actually should be the definition of organisations that should have those benefits conferred upon them so they will be getting, in essence, financial assistance to do their work.

                          As I said, that 400-year-old definition appears to have worked. There has been no outcry for it to change. There have been no great movements of people knocking on our doors to change that 400-year-old definition. It has worked. Those individual entities that have not been able to get charitable status, and hence have been unable to receive donations and be able to make donations tax deductible for donors, have been able to make a submission to the government and to the parliament to have their particular organisation listed for deductible gift status, DGR status, which then enables them to receive donations that are tax deductible. It is something which many organisations obviously seek. So the system works at the moment and I believe there is no reason to change it.

                          My second concern in relation to this bill is that it changes the definition from four categories into almost eight to 10 categories of charitable purpose. This includes advancing health, advancing culture, promoting or protecting human rights and advancing the security or safety of Australia or the Australian people. It includes advancing the natural environments and the catch-all category of promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country and furtherance for protection of one or more of the above purposes. We have gone from having a relatively narrow defined definition of charity which we can all accept to one outlined here which is enormously broad.

                          My concern with this very broad definition is not necessarily the financial aspect of it to the Commonwealth but rather because I think it will lead to the breaching of one of those core principles over which we have had bipartisan agreement for a long time and which there has been no outcry to change. That is the broad principle: that political advocacy should not attract public funding and should not attract any financial or public benefits for it. That has been the broad principle which there has been agreement on across this parliament for a long time. We have not allowed that in the past.

                          In fact, this bill specifically says that political parties will not receive charitable status, but it allows many other organisations to receive charitable status through these provisions which are not charities and really are political organisations. I think particularly many of the green groups that we know that can be aggressively political will seek charitable status under this new definition, should this bill pass this parliament. I believe that many of those green groups do not act in the interests of our nation; therefore, I do not believe that the Australian people would think that it is right that some of their taxes should go towards subsidising green activities. I raise a particular example of the Wilderness Society. It is an organisation which is known very well and which has run an enormous campaign to lock up Cape York Peninsula against the wishes of the traditional owners. And many of those traditional owners and many of the Cape York leaders, led by Noel Pearson, want to be able to have sensible development in their communities so that they can be beneficiaries—they can grow fruit, they can raise cattle, they can have other businesses and therefore help sustain their communities—and have economic developments in their area.

                          The Wilderness Society ran a huge campaign to try to make that impossible. They were so successful that they managed to convince the previous Bligh government to pass a series of laws—the wild rivers legislation—which had the practical impact that no businesses were able to start up throughout most of Cape York Peninsula. It is fine for the Wilderness Society to run that sort of political activity—we live in a free society and we allow such activities to occur—but my argument here today is that such an organisation should not receive any public support for doing such an activity, because I do not believe that their activity supports the overall benefit of the nation. In fact, it was contrary to the interests of Indigenous people who have been looking after that land for thousands upon thousands of years.

                          That is just one example, but it goes to the key principle that I have been articulating: that Australian taxpayers' funds should not be directed to organisations for political activity. I believe if we pass this legislation we will have many organisations who otherwise may not fit the present common law charitable definition that I outlined fitting under the definition of 'advancing culture', 'advancing the natural environment' or 'promoting or protecting human rights' and therefore be, in essence, recipients of special tax treatment.

                          This bill is not a good bill. We have not had a case for a change made by this government. It has not been made in this parliament. I know that many in the charitable sector are concerned about this bill. They are concerned that the charities commission that will oversee the operation of this bill, that will make decisions in relation to who is given charitable status, may not operate as well as the government says it will operate. They are concerned that it will add red tape to its activities, which will just cost those organisations money rather than that money going towards doing the good work that they do in the communities.

                          Our existing charities—the Salvation Armies of the world, the St Vincent de Pauls of the worlds, the Red Crosses of the world—do fantastic work in our community. We want to support those organisations. We want to support the volunteering in our community, but we do not think that we should be completely changing the definition of charity and, through that process, enabling a lot of political activity to, in essence, be deemed to be charitable activity, which I do not think it is.

                          5:18 pm

                          Photo of Paul FletcherPaul Fletcher (Bradfield, Liberal Party) Share this | | Hansard source

                          I am very pleased to rise to speak on the Charities Bill 2013 and the Charities (Consequential Amendments and Transitional Provisions) Bill 2013. In rising to speak, I note that this government's enthusiasm for prescriptive Canberra-led social engineering really knows no bounds. The coalition are opposed to the legislation that is before the House this afternoon. We believe that the case for these extensive changes to the regulation of charities and to the law determining the definition of charities has not been made. We believe that this is a case, yet again, of this Rudd-Gillard government deciding that officials in Canberra know best and that what we need are pages of prescriptive, detailed, intrusive microregulation setting out—in paragraph after tedious, enumerated paragraph—minor gradations of policy, which must be followed in scrupulous detail by members of the community who are trying to advance the cause of recipients of the needs that their charity serves. We believe that what this bill demonstrates once again is the profound gulf between the attitude of the Labor Party and of the coalition towards charities and towards people who are seeking, through their own voluntary efforts, to make our society a better place.

                          In the time that I have available to me, I want to make three fundamental points: first, that this bill is yet another example of this government's deep suspicion of the charitable sector and its deep hostility to the notion of people within our community making an effort themselves to improve our community, to improve our nation; second, that the specific merits of the definition that is proposed in this legislation raise serious questions; and, third, that on this side of the House we take a genuinely small 'c' conservative position. If the case has not been made out for change, then do not change. We believe, when it comes to this bill, the case has not been made out for change.

                          Let me turn firstly to the proposition that the approach of this government to the question of the regulation of charities is very different to the approach that the Liberal and National parties would take. On our side of the House, we congratulate those who carry out charitable endeavours. We congratulate all of those who serve on the boards of charities, all of those who organise raffles, all of those who organise fundraising balls and dinners and all of those who organise fun runs and sausage sizzles. There are so many other day-to-day examples of people in our communities coming together to raise money for important causes. It might be an educational cause such as funding the opportunity for children in rural and regional Australia to get education in the cities. In mentioning that, I think of one particular charity in my own electorate. It might be the running of a school, a hospital or an aged-care facility. It might be the operation of a church. All of these things are done around our country by voluntary organisations, charitable organisations.

                          We on our side of the House congratulate all involved and we ask ourselves the question: why is it that the default attitude of the Rudd-Gillard Labor government is that people who are engaging on a voluntary basis in raising money for charitable purposes and people who are engaging on voluntary basis in providing charitable services be treated with suspicion? Why is it that this government has set up an Australian Charities and Not-for-profits Commission that will dramatically increase the regulatory burden on charities, one that falls particularly upon charities that are run by volunteers, as opposed to paid employees? Why is it that this government has done that when purportedly it was going to achieve a single layer of regulation for the charitable sector? Instead, as has been conceded by officials of the new commission, in fact the premise that the states were going to vacate the field and leave it to a single, uniform national layer of regulation of charities has not been made out and the states have not agreed to do that. It is for that reason, amongst others, that the coalition have been very clear that we intend to abolish the Australian Charities and Not-for-profits Commission.

                          The point I make to the House this afternoon is that the Charities Bill 2013 before the House is redolent of the very same suspicion of the volunteers running charities around Australia which we saw in the earlier legislation establishing the Australian Charities and Not-for-profits Commission. So the point I make to the House is that the philosophical hostility of the Labor Party to self-help efforts, to community based efforts and to people doing things for themselves rather than looking to Canberra is deeply embedded in the legislation we see before us this afternoon. Inherent in it is the notion that we must have further and more detailed and more prescriptive supervision of the charitable field from Canberra, that we must have page after page of detailed enumerated rules as to what constitutes a charity and what does not, and that if a likely consequence of that is that there will need to be a wave of litigation, testing the breadth of this new definition, apparently this is a cost that simply has to be borne so that the near-infinite wisdom here in Canberra can be sprinkled like stardust over the charitable sector. We on this side of the House reject that approach. There is a clear philosophical division between the parties in our attitudes towards the charitable sector, and let nobody say that the two major political parties are coming closer and closer together because in area after area they are not. We on the coalition side of the House are pleased to stand up and nail our colours to the mast and say we reject extra prescriptive regulation of the charitable sector and we support the ordinary people of Australia who are working in so many charitable endeavours around the country. That is what we support, that is what we encourage and that is what we celebrate, and for that reason we stand opposed to the provisions in the bill before the House this afternoon.

                          Secondly, I want to turn to the merits, such as they are, of the definitions which are contained in the legislation before us and I do so against the backdrop of making the point that the meaning of 'charitable purpose' has not previously been comprehensively legislated. We have previously relied upon the common law, that golden thread based upon many hundreds of years of British and subsequently Australian jurisprudence. Under the common law, there are the famed four heads of charity, which I well remember being drummed into the heads of students of trust law at the University of Sydney in the late eighties, including me. The four heads of charity set out in the relevant case are the relief of poverty, the advancement of education, the advancement of religion, and other purposes beneficial to the community. Now the point I make is that against the simplicity of this background we have the page after page of complexity set out in this bill, demonstrating, as it does, the anxious, never-ending bureaucratic impulse to add more detail, more regulation and more prescriptive control—so more of the 'Canberra knows best mindset', which is so common in everything that this government does.

                          We have this lengthy range of charitable purposes set out in the definition before us. We have many different heads of 'advancing health', 'advancing education', 'advancing religion', 'promoting reconciliation, mutual respect and tolerance', 'promoting or protecting human rights', 'advancing the natural environment' et cetera. There is 'any other purpose beneficial to the general public that may reasonably be regarded as analogous to, or within the spirit of' the aforementioned purposes and there is also:

                          … the purpose of promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a State, a Territory or another country …

                          The length, complexity and breadth of this definition raise serious questions in the view of the coalition as to the certainty with which these provisions will operate and as to the basis on which it has been thought necessary to change the existing and well-established law as to the definition of a charity and as to the definition of a charitable purpose. I remind the House that this is a question which was considered by the previous Howard government. At that time, after an extensive investigation into the issues and after an extensive investigation into the question of whether there was in fact a need to vary the existing, well-established common law definition of a charity and the definition of charitable purposes, a view was taken that it made sense to extend the definitions in a small number of defined categories. Hence, the coalition government at the time enacted the Extension of Charitable Purpose Act, which extended the legal definition of 'charity' for the purposes of Commonwealth law to include child care, self-help groups and closed religious orders.

                          That brings me to the third point I want to make this afternoon, which is: has the onus of proof been discharged by the Rudd-Gillard government that there is now a pressing case to throw all of that long-settled and long-established law out the window—to throw out of the window 400-plus years of common law as expanded by the bill and an act passed in 2004 following careful scrutiny? Has a case been made to throw all that out the window and replace it with the extensive provisions contained in the Charities Bill 2013? That is the question which this government needs to answer and, more importantly, that is the question to which this parliament needs to turn its mind, because we are being asked this afternoon to change in a fundamental way the definitions of 'charity' and 'charitable purposes' which have served this nation and other nations under the common law so well for such a long time.

                          As the House considers the case as to whether the merits of that change have been established, as the House considers the case as to whether it makes sense for us to support this change to the law which is proposed by the Rudd-Gillard government, it would be irresponsible not to bear in mind a range of factors. The first factor that we need to bear in mind, as I have already alluded to, is the clear and demonstrated hostility of this government to the voluntary ethos on which so much of today's charitable endeavour depends. This is a government which is hostile to the notion of people in the community doing things for themselves. It is hostile to the notion of community organisations conducting their activities in an unsupervised way. What this government wants to do is extend the long arm of Canberra ever more closely into the activities of charities around the country. Against the backdrop of that proven hostility toward the charitable sector, we need to consider the proposed changes before us.

                          The other thing we need to consider is this government's proven track record of rushing legislation through without having properly consulted with the affected sectors, without having made the case and leaving things until three minutes to midnight. That is clearly what has happened here. This bill is one of a large backlog of bills which the government is rushing through. The coalition looks at this bill with clear and justified suspicion based upon the track record of this government. The government needs to make the case of why there needs to be change and that case has not been made out. (Time expired)

                          5:33 pm

                          Photo of Ken WyattKen Wyatt (Hasluck, Liberal Party) Share this | | Hansard source

                          I rise to speak on the Charities Bill 2013 and the Charities (Consequential Amendments and Transitional Provisions) Bill 2013. I believe that strong local communities are critical to the future of our nation and I believe it is our job as parliamentarians to help facilitate stronger, healthier and more vibrant local communities in our electorates. As parliamentarians we are elected to support our local communities by empowering local not-for-profits and charities to carry out their work in a way that effectively addresses the specific needs of our community.

                          Only our local community charitable organisations see day in, day out the real nature of what is happening on the ground in our communities. The people who are involved in the not-for-profits often are there at the coalface and see both the demand that is required of their charitable organisation and the challenges that people are confronted with because of decisions that are made in the context of their life and the life changes that occur, sometimes by their own doing but often not—often by policy changes and shifts. They are ideally placed to deliver targeted services meeting individuals where they need assistance. Rather than trying to deliver misplaced assistance, these local charities are the ones who offer a hand-up to our community members who are less fortunate, helping them get back on their feet.

                          In my role I have seen time and time again the difference that the charitable organisations make to the overall wellbeing of my community. I have also been a contributor and a member of many not-for-profit and charitable organisations in the endeavours to make a difference for the quality of life of people by providing opportunities for families and individuals who require support across a range of sectors. In particular, Indigenous organisations were the focus of my work in my early years but, as I became much more attuned to the needs across the diverse demographic of the community in which I lived, I contributed many hours to helping attain the goals of those organisations. In fact, only last Friday night I recognised several groups from my own electorate who were doing a great job in serving our local community in various ways.

                          What confounds me is why this government is intent on doing its very best to attack this sector. Why is this government trying to interfere with what these organisations do best? These bills are the latest incarnation of a saga that has been dragging on for a couple of years now under this government. This government has a bee in its bonnet about charities and seems determined to introduce government interference into a sector that has been quietly going about its business for many years. The whole issue of compliance and the time it takes, taking people away from frontline services and delivery in the context of already strained resources, is problematic. Many I have spoken to have no problems with the fact that there is a compliance requirement, but the degree of that compliance and the reach of Canberra into the work they do will only be a further impediment to their work and their focus on making a difference to the lives of so many people who require their help.

                          In May 2011, this government signalled that it would be making substantial changes to the NFP sector. This government announced that it would be giving the industry less than two months to understand and accommodate changes which were to come into effect in July 2012. There was such an outcry from the sector at the fact that this government would want to impose these changes without consultation and without a reasonable time frame, and this government finally bowed to pressure to extend the deadline by just a few months, and that was done. Despite this, in talking with charitable organisations and not-for-profits within my community—

                          Honourable Member:

                          An honourable member interjecting

                          Photo of Ken WyattKen Wyatt (Hasluck, Liberal Party) Share this | | Hansard source

                          Whilst you might say they are not true, I certainly take the word of those on the ground about the pressure put on them. You may not have directly done that, but certainly government agencies in the consultation may have done that. I do not have a problem with what they share with me. Despite this, when the government released the bills and the terms of reference for a committee inquiry into changes, stakeholders were given just nine days to make submissions relating to the bills. This alone illustrated this government's blatant disrespect for this sector and the contribution it makes to our nation. Perhaps this government fails to realise that our country benefits from more than 730 million hours of volunteers' time each year from over six million Australians.

                          It would be good, Minister, if you had some frank discussions upfront with people who deliver on the ground, because I am sure that they would appreciate the opportunity to let you know firsthand what it is that you are expecting of them and how there will be a drawing away from the front-line services that they deliver. Many of the hours that are contributed to our communities through volunteering are conducted through charities. This is a sector that is obviously for the most part well trusted by local communities. If we take that trust list in the paper today then they do far better than politicians do. It is a sector that has earned the dedication and generosity of many volunteers, who align themselves with the many and varied charities.

                          This government is attempting to put a spanner in the works of a system that is working well. This government is creating government interference through legislating for a sector which has been working effectively for many years. This is why I am strongly opposed to this legislation. This legislation seeks to introduce definitions for 'charity' and 'charitable purpose'. This legislation would ensure that these definitions would apply from 1 January 2014 across the entire scope of the Commonwealth government. Effectively, this legislation is attempting to regulate the not-for-profit sector through a troublesome bureaucracy that would itself make determinations on the charitable status of an organisation.

                          The definition of charity has been used for over 400 years. It is certainly not a new concept and it is not a concept that requires any redefinition in the way that it is occurring. Our understanding of 'charity' under common law has served us well for all of this time with the wisdom of those who have gone before us. Where is the sense in fixing something that is not broken, has served the community well and is there when it is required by those who have the need to draw on charities' services and support?

                          This government has pursued this legislation under the assumption that it is considering landmark changes that have not been mooted previously. Nothing could be further from the truth. In 2000, the former Prime Minister John Howard announced that there would be an inquiry into this sector. After an extensive inquiry resulting in 27 recommendations, which were then debated extensively, the coalition made the decision to legislate to add to or enhance the common law, not to overrule it. It did not make sense then to redefine charities, and it does not make sense now.

                          There is no sense in what this government is trying to achieve through this legislation, which is why, if elected, a coalition government would repeal this legislation. This Labor government seems to have an innate distrust of civil society, which is demonstrated in its repeated attempts to mandate more burdensome regulation and to create more government agencies to look over civil society's shoulder. The last thing that this sector needs is the burden of more red tape.

                          Some months ago I was speaking with stakeholders that I interact with in my electorate and through my various committee commitments. The information that was shared with me was that it appeared that this government's decision to overhaul this sector would mean that organisations would need to put on one full-time staff member simply to cover the costs incurred through the additional red tape and paperwork. It hardly seems sensible to be taking the focus of these community-oriented organisations away from the community and to paperwork simply because this government is determined to undermine a sector that is doing so much good in our local communities. Strong communities are communities that are self-sufficient. They are communities that are able to identify the needs of schools, families and individuals and are able to meet these needs through goods and services.

                          Unlike those opposite, we in the Liberal Party have a great respect for what our charitable organisations deliver into our local communities. The coalition support civil society, we trust civil society and we want to empower civil society. Labor's approach is to treat civil society with suspicion and distrust. The UK experience demonstrates how dangerous it would be to empower public servants to determine what is charity and what is not, particularly given the range of organisations that exist across a number of key areas and those that evolve in times of extreme need to provide a service for a troubled family or community. We have announced that we will abolish the ACNC and will repeal the legislation, and we certainly are not committed to creating a new army of bureaucrats looking over the shoulder of civil society. Organisations such as St Vinnie's, the Red Cross, the Brotherhood of St Laurence, the Salvation Army et cetera are trusted pillars of the community. The community trusts civil society and the coalition trusts civil society. It is Labor that assumes we should look over civil society's shoulder and force them to comply with these overburdensome regulations. Doing so takes them away from their front-line service.

                          The challenge, in terms of regulations, is that they are dependent upon interpretation at the various national, state and regional levels, and you will often get varied opinions as to where an organisation may be in contrast to what is required under those regulations and how they should proceed with respect to both their reporting and the information provided. What I am interested in is the final outcome of what those reports will mean and how they will be used, other than for the collection of data that may make not one iota of difference in the way that they operate. Alternatively, the risk is the collapse of charitable and non-profit organisations because of the compliance requirements that are enshrined in this legislation. The government have not demonstrated the mischief that the ACNC was established to deal with.

                          More broadly, we have announced that we will streamline the regulation as it applies to family service agencies. The coalition will oppose this bill and if we are elected, as I have said earlier, we will repeal it, because we believe that these organisations provide an invaluable service to the communities in which they function, operate and are located. Minister, it would have been good for you to have spent some time with some of those key organisations within the Perth metropolitan area—or certainly within my electorate—because they would have shared with you their concerns and views about a whole range of issues.

                          Mr Bradbury interjecting

                          Minister, the process can still occur if you wish to sit and listen. But I would also then expect you—

                          Photo of Deborah O'NeillDeborah O'Neill (Robertson, Australian Labor Party) Share this | | Hansard source

                          Through the chair if we can, please, Member for Hasluck.

                          Photo of Ken WyattKen Wyatt (Hasluck, Liberal Party) Share this | | Hansard source

                          Sorry, Deputy Speaker. I would certainly invite the minister, after the next election, to go back and revisit some of those organisations to get an on-the-ground sense of the frustration that they will experience because of what the government are establishing. It is a pity in a sense that the consultation process was not so comprehensive that the truth of the impact on these organisations was better understood, and it would certainly have reflected that there is strong opposition to many aspects of the increased burden of regulation and red tape, which may shift people from front-line services—away from those very things that I have heard argued about in this chamber that are making a difference for battling families and for communities who require the types of services offered by these organisations. It is a pity that the minister has not consulted much more strongly. I conclude on that comment.

                          5:47 pm

                          Photo of David BradburyDavid Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | | Hansard source

                          I am very pleased to be able to sum up the debate on the Charities Bill 2013. Perhaps it is because I am an idealist, but I really do hold very dear to my heart the notion that members who come into this place and seek to purport to represent their communities might actually read the bill that they are debating rather than reading the talking points that have been shabbily and hastily put together by the shadow minister. I know that there have been various contributions, and I want to really focus my response to those contributions around a couple of points.

                          I begin by saying that I welcome the member for Hasluck's contribution to the debate. He made a range of allegations about a lack of consultation. I am not aware of any previous efforts on his part to bring any organisations that have concerns about this legislation to my attention. Had he done so, I would have done what I am about to do now, and that is to extend to him the opportunity either to bring those organisations here to Canberra or to facilitate some sort of contact. I would be more than happy to meet with them. If he is fair dinkum, he will take me up on that offer. He made a number of claims about how people on the government's side have no understanding of charities. Indeed, he said, 'All they want to do is saddle charities with red tape.' Let me just remind the member for Hasluck—who, like me, was not in this parliament when his side of politics were in government—that I took a very close and active interest in the charitable and not-for-profit sector back then. I recall very well the treatment that the not-for-profit and charitable sector were subjected to under the coalition government.

                          I begin with gag clauses. He waxes lyrical about how they want to support the not-for-profit sector. They wanted to support them so much while in government that they slapped gag orders on them. They shut them up and shut them down. They cut their funding if they spoke out.

                          Opposition Member:

                          An opposition member interjecting

                          Photo of David BradburyDavid Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | | Hansard source

                          The member opposite said, 'Don't be so ridiculous.' Right across the charitable and not-for-profit sector people are in fear that if there were to be a change in government you characters will return to type and do exactly what Newman has done in Queensland and O'Farrell has done in New South Wales to silence these organisations. The member opposite said that this is just additional red tape and that we have a tried and tested definition of charity; it is in the common law and it has been there for 400 years. You know what? The Commonwealth of Australia has not been around for 400 years. In fact, white settlement in Australia did not begin 400 years ago. The point is that the definition of 'charity' goes all the way back to the statute of Elizabeth. I know that those opposite have a penchant for the mother country. So dear is that to them that they want to retain in place a definition of 'charity' that began with the statute of Elizabeth in 1601.

                          An opposition member interjecting

                          The member opposite said that the wheel was invented a lot earlier than that. He is contributing in his Neanderthal way. I thank the member for his contribution. The point is that this is a definition that has evolved over a period of 400 years. I want to share with the member for Hasluck a personal experience. When I first began as a tax lawyer many years ago undertaking a pro bono project for a charitable client, they came in and said: 'We want to know if we're a charity. Can you please tell us?' You would have thought that that would be a pretty simple thing to do. Listening to the member for Hasluck talk about this well-worn and acceptable notion of charity that has been developed over 400 years, you would think that that would be pretty easy to do. I have to say that working in a corporate law firm and having spent hours and hours to put together a letter of advice that was between 12 to 15 pages long, I simply ask this question: do you really think that that is good enough for the charitable and the not-for-profit sector? Any organisation out there simply wanting to know if they are a charity needs to go and get legal advice that runs to tens of pages.

                          Photo of Ken WyattKen Wyatt (Hasluck, Liberal Party) Share this | | Hansard source

                          They still will.

                          Photo of David BradburyDavid Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | | Hansard source

                          The member opposite says that they still will. I tell you what, though: they will not have to wade through case law. There will be an act of parliament that will consolidate these matters in a way that will simplify the process of determining whether an organisation is a charity.

                          The member opposite also made the point that former Prime Minister John Howard did initiate a process and did indicate that there was to be an inquiry into the definition of charities and related organisations in 2000. But what he did not say is that the then Prime Minister, John Howard, said: 'The common law definition of a charity, which is based on a legal concept dating back to 1601, has resulted in a number of legal definitions and often gives rise to legal disputes.' It was on that basis that he initiated a process of review. The member says that after having gone through the review the reason the then government decided not to legislate was because they decided that that was the better outcome. But that is not what happened at all.

                          What happened in the end was that, because they botched and mishandled that process so badly, the charitable and not-for-profit sector truly were up in arms. The member opposite says that the charitable and not-for-profit sector are up in arms now. Where are they? I do not see them in the gallery today. But I tell you what: when your side of politics was in office and you tried to do this you botched it and mishandled it so badly that in the end the then Treasurer, Peter Costello, squibbed it. He walked away with his tail between his legs after deciding that it was all too hard. They are the facts; that is what happened. Notwithstanding that, I would like to acknowledge the contributions of those who have read the bill and sought to contribute to the debate in an informed way.

                          The statutory definition of 'charity' is an important reform and a key part of our government's not-for-profit reform agenda. This agenda focuses on supporting a strong, vibrant, diverse and independent NFP sector. And, when we say 'independent', that means not slapping on gag orders and putting gag clauses into people's contracts, and making sure that if they do speak out on behalf of the disenfranchised then their funding is not ripped away.

                          This is sensible and evidence-based reform and will provide more certainty and clarity about the meaning of charity and charitable purpose. It will cut down on compliance costs. So, to those who say that this is about more regulation, I say that it will streamline the process. It will make it easier for people wishing to establish charities and will make the definition easier for the community to understand. They will not have to wade through a long list of cases that have determined what the notion of charity is. The reform has been recommended by numerous reviews and inquiries—this is something glossed over by those opposite—over many years and has widespread support from right across the NFP sector. The member opposite said that there has not been consultation. Well, the truth is that this notion has been consulted upon for a very long time. In fact, the fact that there is so much support in the charitable sector for what we have come up with is testament to the hard work of, in particular, those Treasury officials who have been in the chamber working tirelessly to make sure that we have a product that reflects the attitudes of the community.

                          A joint media statement issued yesterday by 11 organisations from across the NFP sector makes clear just how strong the support is, and I would be happy to table that document later on if that assists. These organisations include Philanthropy Australia, the Australian Environmental Grantmakers Network, and the Community Council for Australia. In the media statement the executive director of the Public Interest Law Clearing House, Ms Fiona McLeay, summarises why this legislation is so important. She says:

                          Currently small, volunteer led organisations have the unenviable task of trying to comply with laws that are unclear and sometimes inconsistent. By transferring 400 years of case law into one Plain English statute, the bill will make life easier for hard working individuals, serving the community.

                          I would simply say to those who might be listening to the broadcast of these proceedings or who might be reading the Hansard: do not listen to the false claims of those opposite about what the charitable and not-for-profit sector is saying; listen to what the sector is saying. And you have it there from Fiona McLeay.

                          The Australian Charities and Not-for-profits Commission, the ACNC, is Australia's first independent and dedicated charities regulator. It has been up and running since December last year. Those opposite opposed it, and they say they will repeal it. But it is an organisation that is adding value and supporting the sector. The statutory definition will assist the ACNC in its work, strengthening and supporting the sector as it grows into the future. The bill aims to preserve common-law principles, with some minor variations. Charities must be not-for-profit and have only charitable purposes, except for any ancillary or incidental purposes that further or aid the charitable purpose. The charitable purposes must be for the public benefit. It sets out the main purposes that the courts have considered charitable and retains the long-established presumption of public benefit for certain charitable purposes. And I want to emphasise the importance of that point, because that is where the former government got themselves into so much hot water; they wanted to tamper with that particular element of the notion of charity.

                          This reform retains the flexibility inherent in the common law that enables the courts as well as parliament to continue to develop the definition to ensure that it remains appropriate and reflects modern society and community needs as they evolve over time. Importantly, the bill incorporates the outcome of the Aid/Watch Incorporated v Commissioner of Taxation case, which extended the ability of charities to advocate and advance public debate. The government is tabling an addendum to the bill's explanatory memorandum to provide further clarity and certainty regarding charitable purposes, disqualifying purposes and the assessment of whether a purpose is for the public benefit.

                          I would like to take a few moments to address some of the other remarks made by some of the opposition speakers and in particular the member for Menzies. Despite the overwhelming evidence base for this important reform, the opposition, as they have done many times before, have decided to ignore that evidence. The member for Menzies says that this is an unnecessary bill and that since Federation the definition of charity has remained clear and consistent. Rather than pay attention to the misinformed perspective of the member for Menzies, let us have a look at the evidence. A statutory definition of charity has been recommended by numerous reviews and reports, including—and let me go through them—the 2001 inquiry into the definition of charities and related organisations, Australia's Future Tax System Review in 2010, and the Productivity Commission Contribution of the not-for-profit sector report, also from 2010. These reviews and reports were undertaken by esteemed Australians, such as Mr David Gonski, Mr Robert Fitzgerald and Dr Ken Henry. They were informed by detailed consultation and hundreds, if not thousands, of public submissions.

                          In its 2010 report the Productivity Commission stated:

                          Submissions indicated that there was considerable confusion and inconsistency around the definition of charitable purposes (including PBI) for the determination of tax concessions.

                          The member for Menzies not only seems to disagree with the Productivity Commission and those other well-informed reviews but it seems he also disagrees with former Prime Minister John Howard in his view that this was an area where we can do better and provide more clarity and certainty to Australian charities.

                          What happened after the inquiry is another matter. The Howard government not only squibbed it when it came to putting into the statute a definition of charity but they also put in place gag clauses to restrict the ability of charities to undertake advocacy, and they also in many respects intimidated those organisations that were simply seeking to represent, in many cases, the disenfranchised and vulnerable sections of the community.

                          The opposition position on this bill is once again an example of their failing to listen to stakeholders. They come into this place and talk about the impact on charities. Members opposite have said this will add to the regulation of charities, that it will add red tape. I asked them to tell me how it will add to red tape, because those charities that are already charitable—

                          An opposition member interjecting

                          The member opposite refers not to this bill but to other matters. If he is referring to this bill then I ask him to provide me even with some speculation on where there might be additional regulation. There will be no additional regulation, but this will make things a lot simpler for organisations that have not yet established as charities.

                          The government has seen the evidence, not just in the course of our consultations but those that have come before us. Also, we have worked with stakeholders and listened to their views, and now we are acting on their views. That is why we are progressing this important bill. I understand why those opposite, who failed to do this when they were in government, are determined to stop us from doing it. But we want to push ahead because we know how important this is to the charitable sector.

                          I table the addendum to the explanatory memorandum.

                          Photo of Ms Anna BurkeMs Anna Burke (Speaker) Share this | | Hansard source

                          The question is that this bill be now read a second time.