Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

It is up to the Australian Charities and Not-for-profits Commission Commissioner to determine the size of an entity for a financial year. There are also some concerns in the industry as to how the commission will use the prescribed enforcement tools. Don't we just love that? When you read about enforcement tools you know you have something to worry about. How the commission will actually operate on a day-to-day basis is yet to be clearly established. How typical of this government—the devil is always in the detail. I note that that is quite an apt phrase to use today of all days—the devil is in the detail. We are waiting for the detail on the Murray-Darling Basin Plan. We are waiting for the detail on the Charities and Not-for-profits Commission so we can understand how this will work in practice. This government is constantly lacking.

The Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012, which are before us today, will provide the Australian Charities and Not-for-profits Commission with the authority to, amongst other things, issue warning notices, issue directions and enter into enforceable undertakings. These powers will make the commission amongst the most powerful of all of our government agencies—not a power to look at the areas of concern in our community but a power over those committed to caring for our community.

There is dispute about the role of the advisory board and its advice being provided on request. How much advising will the advisory board really get to do? The Smith Family outlined its concern in its submission to the House of Representatives Standing Committee on Economics. It stated:

While understanding the advisory nature of such a Board, the inclusion of the phrase ‘at the request of the Commissioner’ in relation to the provision of advice … is, in The Smith Family’s view, unnecessary and undesirable, as it could result in the Board not offering advice in a proactive way.

Policy direction is still decided by the Australian Taxation Office. The ATO determines charitable status and the eligibility of the not-for-profits to access tax exemptions and other concessions, but the ATO's aims may not always be the same and it therefore may not be independent enough, as it is responsible for revenue raising and deciding if a not-for-profit should be given charitable status. As I have said, the states have made their desires known around the relinquishment of their powers to the commissioner, yet large not-for-profits will have to submit the same information to a number of different agencies and so the cost of compliance obviously will be high. The Productivity Commission says a variation in legislation reporting will also add another layer of complexity. I think we can justly ask why there is a need for an increase in power. As Mahatma Gandhi said:

I look upon an increase in the power of the State with the greatest fear because, although while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality which lies at the heart of all progress…

Across civil society; that is my little added extra there. I think we need to be wary of those things. We have got an entity being established with unheard of power over people and organisations. The coalition have a better idea, one that is going to focus on innovation, advocacy and education. Above all, it will introduce measures that would make it easier to meet the reporting and contractual requirements of charities and the not-for-profit sector. I will not be supporting these bills.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I indicate that I will be supporting the second reading stage of this bill, the Australian Charities and Not-for-profits Commission Bill 2012, and I am generally supportive of the intent of these bills subject to concerns in ensuring that the bills are effective and that they will be fair on issues in terms of compliance. I think this is a significant move forward and rather than, as some members of the coalition have said, stifling the not-for-profit sector, I see this as having great potential to nurture the not-for-profit sector, and I think that it is reform that is long overdue.

I also think that these reforms will enhance the role of charities and the not-for-profit sector in this country. We have seen multiple past inquiries held by various organisations from parliamentary committees to the Productivity Commission and the Henry tax review, and they have recommended the establishment of a body to oversee the charity and not-for-profit sector. I am grateful for the briefing from the minister's office and his advisers in relation to this because that has been a very useful part of the exercise.

This is an issue that I came to largely by accident, in the sense that I became aware of difficulties with one part of the not-for-profit sector, if you like, or a religious organisation, the Church of Scientology, several years ago as a result of speaking out about the whole issue of tax concessions for the Church of Scientology. After speaking out about that particular organisation, my office was flooded with many, many letters of concern from individuals that described horrendous and quite terrifying experiences with the Church of Scientology, an organisation that receives, effectively, a subsidy from every taxpayer in the country by virtue of its tax-free status.

That prompted me to introduce legislation, the Tax Laws Amendment (Public Benefit Test) Bill 2010. It was the subject of an extensive inquiry by the Senate Economics Legislation Committee, an inquiry in the very best traditions of a Senate committee process in the sense of the cooperation between both coalition and government members and the way we all worked cooperatively to get the best outcome in terms of establishing the best way forward to deal with a public benefit test for not-for-profits for organisations that receive tax-free status. I would like to place on record my gratitude to the brave people who came forward who were involved in the Church of Scientology and gave evidence and made submissions that articulated their concerns very well. I am sure that that did have an impact, a considerable and beneficial impact on the deliberations of the committee.

Let us look at what the Economics Legislation Committee in a unanimous report said back in September 2010, just over two years ago. The report said, basically, that my bill should not be accepted. I obviously dissented from that, but coalition and government senators took the view that my bill in relation to setting up the specific public benefit test in our tax laws was not the way to go. But the committee unanimously, through every ALP and coalition senator on the committee, made a number of recommendations. They recommended that there ought to be the establishment of a commission which applies a public benefit test. In other words, what the government is doing now, effectively—the same sort of approach. The committee recommended that there be a working group to consider the functions and role of an Australian commission, and that they should include, but not be limited to, the following: promote public trust and confidence in the charitable sector; encourage and promote the effective use of charitable resources; develop and maintain a register of all not-for-profit organisations in Australia using a unique identifying number as the identifier; develop and maintain an accessible, searchable public interface and so on; allow for monitoring and promoting compliance legislation; and stimulate and promote research into any matter relating to charities.

In essence, the committee recommended—and I quote from this unanimous report—that incoming government:

… should follow the emerging international best practice and work with the Council of Australian Governments to amend legislation governing not-for-profit entities to include a definition and test of 'public benefit'.

The reason why we need a public benefit test is that if an organisation is going to receive a tax-free status, it is important that there be a benchmark. The public benefit test, as it has been applied in the United Kingdom and as it has been applied in other jurisdictions—but particularly in the United Kingdom, where the law and practice are best developed—is not an onerous test.

It is a test that effectively sets a benchmark of fairness. The organisation receiving the tax-free status has to show that on balance it does more good than harm. It does not mean that the organisation has to be perfect and it does not mean that the organisation does not make mistakes, but it means that overall the community, or a section of the community, benefits from the work of that organisation. And I want to pay tribute, at this stage, to the enormous good work that the not-for-profit sector does in this country in the many tens of billions of dollars that it provides in net terms as a result of the work of its volunteers and the work of these organisations each year.

The consequence of us not having a strong, viable, robust not-for-profit sector is that it would create a huge chasm that I do not believe any government, even with incredibly deep pockets, could fill. The work they do cannot just be measured in terms of its dollar value or the billions and billions of dollars of good work that is done; it is in terms of the impact that has on the social fabric of our community. The work of those volunteering organisations is something that is tremendous. I know that from his background in Western Australia with not-for-profit organisations and his tremendous contribution, Senator Back paid tribute to that, as he should have. My concern is that the recommendations of a committee of both coalition and government senators made it very clear that we do need not-for-profit commission and that we do need an organisation that is robust and transparent, and one that would actually enhance and benefit the not-for-profit sector.

I think it is important to look at the Charity Commission for England and Wales and to explain their approach, which is at page 19 of the Senate committee report. The charity commission sets out that it is really a question of how the organisation self manages those sorts of issues. It talks about how an organisation functions and the organisation's ability to demonstrate that it satisfies the public benefit requirement. There is, if you like, developed case law or precedents in the United Kingdom which set out how this test has been set out.

I think it is important to set out the reasons why we need a public benefit test, which is not in this legislation. That concerns me, because we simply do not know the extent of the benefits that are provided. I think that the Productivity Commission has estimated it at between $1 billion and $8 billion in tax benefits in this sector. I do not quibble with that, even if it is at the higher end, but I think that it is not unreasonable for there to be a measure of accountability and a measure of robustness; a measure that is not onerous on the sector but a measure that actually increases public confidence in the sector. It is important to make reference to Mr David Gonski, who has been quoted by a number of my colleagues in opposing the bill. Apparently Mr Gonski was concerned—or he is reported as saying—that the liabilities of directors of not-for-profit organisations are actually more onerous than those for for-profit companies—in other words, for public companies. That, to me, bears some examination

It is fair to say that there were some concerns expressed in the earlier drafts of this bill, but the amendments that I have seen from the government indicate that those issues have been dealt with and that the regulatory regime here is tailored to the size of the organisation. If it is a major charity such as World Vision, with a huge budget and huge work that it does here and around the world, there are obviously greater levels of control or scrutiny. I note that World Vision is one of the major charities in this country that is very much on board with this legislation. It welcomes this legislation. But in terms of the smaller not-for-profit organisations—the small community organisations with tiny budgets—the level of compliance is much lower. It just provides a benchmark and a framework. I see it as a support mechanism for those organisations to flourish.

It is interesting to note that there was concern expressed as recently as the end of July 2012. The Chief Executive Officer of Catholic Health Australia, Martin Laverty, expressed concerns in the context of this bill about the regulatory framework. That was at an inquiry by the House of Representatives Standing Committee on Economics into the exposure draft of the legislation. A lot has happened since then and I think that the government has listened to a substantial degree to some of these concerns. I note that a report in the Financial Standard online of 5 September, just under two months ago, said Mr Gonski:

… welcomed the government's response to revise the bill, saying they have listened to industry feedback and that there are now strong grounds for optimism that the ACNC—

the body that this bill sets up—

will not just regulate but also nurture giving in Australia.

I see this bill as having the ability and the potential to nurture giving in Australia rather than stifling it, and to encourage these organisations to do well and to effectively be able to contribute even further to the wellbeing of our society.

At this stage I move the second reading amendment standing in my name in which the Senate calls on the government to introduce legislation relating to definitions of public benefit within 12 months of the bill passing. I move:

At the end of the motion, add:

but the Senate calls on the Government to introduce legislation detailing the definition of 'charities' and 'charitable purposes' and including a public benefit test, within 12 months of the passage of these bills

My concern is that the legislative framework in its current form is somewhat too vague.

If you look at the work that the Senate Economics Legislation Committee has done on this in a bipartisan sense, in the best spirit of the way Senate committees work, it made very clear recommendations of the need to include a public benefit test in any not-for-profit or charity organisation's commission framework. That would allow an extra level of scrutiny. It would ensure that the tiny minority of organisations that are not doing the right thing or acting for the public benefit, on balance, are subject to appropriate scrutiny.

I note that the government will not be supporting the secondary amendment. I am fairly confident that the opposition will not be supporting it either. But I think it is important to put on the record that without these new definitions the commission will not have a strong foundation on which to act. It is important that there be some clarity as to what public benefit means in the context of how this commission works. These two issues are inextricably linked. There is no point in establishing a commission without a strong enough definition of charity to work from. I believe a delay in introducing a new definition will mean the commission is not working as effectively as it could. The government has dedicated $53.6 million over four years to establish the commission, and it has committed to introduce the new definitions, so there is a clear intent that this should succeed. So it is difficult to understand why the government feels it cannot support my amendment. I think it is also vital that the government expand the commission's powers to cover the not-for-profit sector as soon as possible. I acknowledge the government's reasons for this delay, and I think it is important that there be an appropriate transitional approach to ensure the smoothness with which this legislation operates.

I think also that it is worth mentioning that the economics committee's second recommendation from the inquiry into my bill two years ago was that the Attorney-General's Department provide a report on the operation of overseas agencies tasked with monitoring and controlling the activities of cult-like organisations, making specific reference to the MIVILUDES agency in France. I was lucky enough to meet the then head of the MIVILUDES agency here in Canberra at a conference on cults that Senator Sue Boyce, coalition senator for Queensland, played a key role in. We co-sponsored and assisted the organisers of that conference here at Parliament House last year.

I think it is important that we put that in context, because that is at the sharp end of when things go wrong when an organisation receives tax-free status. Clearly there needs to be a level of scrutiny such as there is in France for these cult-like organisations. Again, that is at the very fringes, but I think it is important in the context of any regulation of this sector that there be that level of scrutiny. The government rejected this recommendation, saying that the establishment of an agency like MIVILUDES would restrict religious freedom in Australia, which I find incomprehensible. I subscribe to the view, which I hope is held by everyone in this chamber, that religious freedom is absolutely fundamental in our society, but I see this as being not about beliefs but about behaviour, and that is what MIVILUDES in France deals with. That agency looks at the behaviour of organisations on the fringes which could be described as 'cult-like organisations' and which abuse their positions of trust. I think that it is important that we look at what the French have done in relation to this.

I look forward to the committee stages of this bill. I hope that it does go into the committee stages. I believe that these measures in this bill will lead to greater transparency and confidence in the sector, because the public will know that there will be a 'nurturing organisation', to use the words of Mr Gonski, to deal with the not-for-profit sector. Again, I think it is reasonable to ask the government what the level of regulation will be for those smaller not-for-profit organisations, but my clear understanding from the amendments and from the briefings I have had from the government is that it is a graded level of regulation depending on the size of the organisation and that this bill does actually provide a framework of support and nurturing for the not-for-profit sector. Therefore I support this bill, but I believe it needs to be clearer in definitions and we need, sooner rather than later, to have a public benefit test in any legislative framework, as has existed in the United Kingdom for many years and as has existed in other jurisdictions in a way that ensures accountability and ensures nurturing of the sector but also provides increased public confidence in the sector.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

My objection to the Australian Charities and Not-for-profits Commission Bill 2012 is in relation to both its specific detail in various areas and, more broadly, its general philosophy. I think Kevin Rudd summed it up pretty well when he spoke about the Labor Party's approach to power and governance:

Politics is about power. It is about the power of the state. It is about the power of the state as applied to individuals, the society in which they live and the economy in which they work.

That is why I am proudly a member of the Liberal Party, or the Liberal-National Party in Queensland, and could never become a member of the Labor Party: because of its underlying philosophy that they, being the government or the people that run the government, seem to know better how individuals should run their lives than individuals do. We see that so often in legislation that comes before this parliament. Members of the Labor Party—people sitting opposite us, people who are probably mainly nice, honourable and honest but whose experience in life is very limited—have these ideas. I do not know where they come from. Perhaps it is their education or perhaps an unfortunate view of the world, but they have these ideas that there are wrongs in the world that only they and their group of friends can address.

Labor politicians have this broad approach of saying to people: 'You are not good enough to look after yourself. You are incapable of looking after yourself. We know better than you what is better for you and, therefore, we will attain power and we will, for your best interests, impose upon you what we know is best for you.' That of course has always been my great aversion to the way that the Labor Party deals with Indigenous people and always has done. The Labor Party says to Indigenous people: 'Hey, guys, you're incompetent. Because you're Indigenous you're not capable of doing the things that we whiteys can do, so we'll do it for you. We'll tell you what it's all about and we'll make some rules that you'll abide by which we know are better for you.' That is a view that the Labor Party, generally speaking, has about society and which is, as I say, encapsulated by Mr Rudd's famous maiden speech, when he said that politics was about power of the state.

This bill is telling not-for-profit organisations that the Labor Party knows more about how to run them honestly and properly than they do. I venture to say, and again this is a generalisation, that there are not too many people in the Labor Party who have ever been involved in not-for-profit organisations. I know a lot of them have been involved in for-profit organisations called unions but, when it comes to the Apex Club, which I was proudly involved in for many years, or to the local basketball club, which again I was involved in, and people volunteering their time to help others, the Labor Party seems to be either unaware or sadly remiss in understanding the basic philosophies of these not-for-profit community groups.

One would hope that the Labor Party would start with these sorts of regulatory arrangements in the union movement. We have seen with the HSU what an appalling mess the union movement in Australia is in. Nobody can tell me that that is confined to the HSU. The HSU, through the efforts of some courageous members, actually blew wide open the graft and corruption that exists in that particular union. But, as I say, it defies belief that this is not happening in other unions where there is no accountability and where a small coterie at the top seems to rule the roost and use members' money as if it were their own personal plaything. If the Labor Party were interested in regulating something, it should be more regulation of the union movement rather than regulation of not-for-profit community groups. As I read this bill and as I read the evidence that has been given by various parties to the Senate committee on this, I almost get the feeling that this is a move by the Labor Party to better control some of the church groups in our country. Whilst none of the church groups actually gave that evidence, they did give a lot of evidence which indicated that the good works they do would be curtailed by the extra regulation that would be imposed upon them and none of them could really work out—and neither can I, I might say—what ills this bill is supposedly intending to cure. It seems to me, and to my colleagues who were involved in the committee who have gone into this at some length both in their dissenting report and in speeches given here, that this bill will only bring more regulation on the not-for-profit sector for no particular value.

That is why I am delighted that the coalition, and Mr Andrews in his lead speech on this, have indicated that we will be opposing this bill for the reasons that I have mentioned, but as well for the reason that the sector itself sees the bill as heavy-handed and an unwarranted interference in the activities of civil society in Australia. We in the coalition believe—and were we fortunate enough to become government at some time in the future we would act in this way—that there should be a small body in this area that could act as an educative and training body to help lift standards without the quite overbearing regulatory enforcement powers that are being proposed in this bill. That is, we would pursue the opposition's general approach to life and governance, as opposed to that enunciated by Mr Rudd in his speech, on empowering people.

We want to empower people. We want to bring the best out in people. We want to help them to achieve their highest goals. We do not want to exercise power over them. We think that human beings, no matter their education or their background, have an ability to do good, to work things through, to work out what is best for their families and for their society. We do not believe that government should always be there regulating the way people work.

In my life, particularly before parliament, I was involved in many community organisations. People do not always do things correctly. Perhaps at times they cut the corners, but they are striving for the right purposes. They are there for the betterment of their society. To have the government come in now with this sort of regulation will just dampen any enthusiasm people might have had for selflessly giving up their time to help others.

I see Senator Williams in the chamber. Senator Williams is also an Apexian, as I understand, and he would recall the hundreds of hours young men volunteered to help those in society less fortunate than themselves and less able to get things done. People in the days of Senator Williams and I were happy to do that. But here is the government coming in now and saying: 'We want to regulate you. We want to tell you how to work. We want to tell you what you have got to do. We want to tell you that you have got to put in all these forms and do all this red tape and raise a bit more money so you can pay a professional accountant and a professional solicitor to double-check these forms that you have got to fill in.' One of the witnesses to the Senate inquiry—I think it was the Australian Institute of Company Directors—said, 'For every hour we pay for compliance we lose about 1½ hours of one-to-one support for our ageing residents'. No, I am sorry, they were quoting the CEO of an aged care company that was part of the membership of the Australian Institute of Company Directors.

So someone in an aged-care home said, 'We can do two things: we can spend an hour filling in additional government forms and regulations or we can spend an hour and a half actually helping the aged-care people that we are here to help'. This legislation effectively says to that organisation: 'Forget the aged people who need your care and attention; for the hour and a half that you would have given to that person—sorry—you will fill in some forms now. You will complete these forms'.

I recently had the following experience that, again, demonstrates what I am talking about. I have not paid as much attention as I should have, I might say, to ABSTUDY matters, but it has become a bit of an issue in the north at the moment because a school that was doing fabulous work for Indigenous kids is in the hands of the receiver. It was likely to close, although I understand that events in the last day or two have led to some arrangement with the liquidators. But the reason this school was in difficulty was that claims for ABSTUDY had not been met by Centrelink.

Centrelink act by the rules given to them by their government, and Centrelink would just say, 'Claim rejected'. I was told that they would not explain why it was rejected—what was wrong with the application; they would just say, 'Claim rejected'. Consequently, the school continued to educate, travel, accommodate and feed the students for whom the ABSTUDY claim had been made but they were not getting the money back to do it. Clearly, they fell into some difficult financial operations. I said to them, 'Why haven't these claims being met?' They then showed me the form—it is 40 pages of questions to be answered by Indigenous people or their parents, many of whom are illiterate, and which I, I might say, as a former lawyer, found difficult in comprehending myself. Very often, the explanatory little note under each question on these 40 pages of questions had 'Refer to some website address for a further explanation'. Madam Acting Deputy President, as you would know, there are many parts of Australia where Indigenous parents do not quite have the access to the website or a computer to actually see what they are supposed to be doing.

This is regulation gone mad: 40 pages to be filled in by either the students or, in many cases, their semi-literate parents. In many cases the school will try to help the parents complete the forms, but in many cases the parents cannot give the information that the school needs to actually complete the form. So the forms go in uncompleted and Centrelink says, 'Claim rejected'. It will not tell them why. Consequently, whilst the school continues to fly the kids down from country Northern Territory or country Queensland and continues to feed them, to clothe them and to educate them they are not getting the ABSTUDY money in because the students—silly kids!—could not fill in this 40-page form that I could not fill in. Or their parents did not have all the information about where the birth certificate was or where other certified information was that had to be attached to the form. This is typical of the philosophy of the Labor Party: overregulation. Again, that exemplifies my opposition and, I am pleased to say, the opposition of the coalition to this bill. I draw the Senate's attention to the evidence given by the Anglican Diocese of Sydney. They said this in evidence to the committee:

It is likely that we will need to employ someone on a full-time basis to deal with the compliance issues that this legislation is likely to raise for the Diocese of Sydney—and I am sure we will not be alone in this regard.

That is what they said in their evidence. What is it in the Anglican Diocese of Sydney that the government is trying to regulate that requires them to employ someone on a full-time basis to look at the compliance? I would have thought that the Anglican Church has been going since the days of Henry VIII! I often say to my Catholic friends that the one true church was started by Henry VIII back in the 16th century. But they have managed to get through to where we are today without the need for the assistance of this legislation before the chamber. The Anglican Church—and I am an Anglican—does good pastoral work but also good missionary work where it helps people. That is what its whole philosophy has been for many years. But now, instead of employing someone to go out and help others, they will have to employ someone on a full-time basis to deal with the compliance issues of this legislation.

I ask a government speaker, if there are any government speakers on this, to indicate what it is that they think the Anglican Church needs to do that it has not been doing and that this legislation is going to address? What is the Australian Council of Social Service—which also had very severe concerns that it expressed to the committee—not doing that requires this draconian legislation to overregulate it, to divert its scarce resources into filling in forms to satisfy government red tape?

My colleagues and Senator Xenophon before me have been specific on particular parts of the legislation that need to be addressed. I have not gone there and I will not go there. I simply raise the objection yet again on why it is that the Labor Party thinks it knows better how to control civil society—how it has to better control volunteers doing community work? How is it that members of the Labor Party know better than these community groups on what is good for community groups? I do not want to be offensive or insulting, but you ask me who I would rather have looking after my life and my family's life: members of community groups and volunteers working in the community, or members of the Labor Party government whose basic experience has been the trade union movement? There is really little contest in what the answer would be.

I hope that all parties in the chamber will ultimately see that this bill does not do anything. It overregulates, does not achieve anything and just makes it less welcoming in our civil society for individuals to play their part in our communities and our society.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Today we are debating the Australian Charities and Not-for-Profits Commission Bill 2012. This bill covers a range of Australian charities, including non-government organisations such as the World Wildlife Fund, Greenpeace, the Wilderness Society and the Australian Conservation Foundation. These and other environmental activist NGOs have taken advantage of the significant privilege of charity status to spend large amounts of money campaigning in ways that are hurting both Australian primary producers and consumers. This bill allows the opportunity to take a look at the activities of these tax-exempt NGOs and, in particular, how they are using their money and influence to restrict what products can be sold by Australian producers and bought by Australian consumers. These activities include certification schemes being run and promoted by NGOs, like WWF and Greenpeace in particular, under which they want to be the people with the final say on certifying what is and what is not sustainable in primary production and, in turn, what can and cannot be sold to consumers. We find NGOs such as these more and more trying to establish certifying bodies. All they want to do is tell primary producers how to run their operations, tell you what you can and cannot do to be certified as 'sustainable', and extort money for the privilege.

In the timber industry, we have seen the Forest Stewardship Council—a body supported by several green NGOs, including the World Wildlife Fund, or WWF—certifying products. We have seen it in the seafood industry through a body known as the Marine Stewardship Council, founded by the WWF, and we are also seeing the beginnings of a similar move in the beef industry through what is called the Roundtable for Sustainable Beef Australia, or RSBA, where again WWF is prominent. The ultimate intent of these moves by WWF and other environmental activists involved in certification is to ensure that only goods certified under their schemes are sold through Australian retail outlets such as supermarkets, furniture retailers et cetera. Of course, to have their products certified in the first place, and then have that certification renewed on a regular basis so those products can continue to be sold to the Australian public, costs producers a substantial amount of money. This is a very serious issue for Australian primary producers and Australian consumers.

I am calling on the Treasurer to refer these schemes to the Australian Competition and Consumer Commission, the ACCC, for investigation on the basis they could represent a secondary boycott. I am also calling on the Treasurer to take action to amend the Competition and Consumer Act 2010 to remove any doubt that the green NGOs who are threatening to instigate boycotts of Australian primary products—especially Tasmanian forest products following the collapse of talks between industry and the green NGOs—can be referred to the Australian Competition and Consumer Commission under sections 45D and 45E, relating to secondary boycotts. According to the ACCC definition, secondary boycotts occur when two persons together engage in conduct that hinders or prevents a third person from supplying to, or acquiring goods or services from, a fourth person. They are prohibited if their purpose is to cause substantial loss or damage to a business or a substantial lessening of competition in a market. Isn't that what is happening when the environmental activist organisations collude with others to set up a body or scheme as the arbiter of what is 'sustainable' and what timber wholesalers, retailers and consumers should be allowed to buy or sell or what fish or, down the track, what beef people should be allowed to put on their plates? Everyone involved in this whole process of certification, roundtables and the like should consider their position very carefully. Certainly the ACCC should examine the practices related to product certification—and especially refusal to trade in products available from producers who do not agree to pay for such certification. Regardless of the findings of any ACCC investigation, all primary producers in Australia should refuse to have anything to do with these certification schemes orchestrated by environmental activists.

For example, in the case of the Forest Stewardship Council I referred to earlier, its members in Australia include WWF, the Australian Conservation Foundation, Friends of the Earth, Greenpeace and the Wilderness Society. All primary producers should look at the membership of that certifying body. What primary producer would want such a collection of radical environmentalists controlling what they are allowed to produce from their properties? No producers that I know. But this is not some far-fetched fantasy from the future. We are seeing constant pressure on timber producers and their major customers to use Forest Stewardship Council products.

While this example has nothing to do with the WWF, there is a lesson to be learned from what has happened to the Triabunna woodchip mill in Tasmania. It processed natural forest wood products from sawmill residue and forest residues from southern Tasmania. It was closed—it may be there to honour some contracts, but it was basically closed—by Gunns Limited in April last year and then purchased in July, well over a year ago, by two millionaire environmentalists. It has not fully operated since then. When or even if it will reopen is not known. The storage of thousands of tonnes of waste and wood that normally would have gone to the Triabunna facility has become a real issue for southern Tasmanian sawmills in recent months. With many storage areas full and incomes down by a third since the closure, there are concerns that some sawmills will have to close, and that is what the Greens want. Does anyone believe years of harassment by the green groups did not play a part in the demise of Gunns Limited, putting so many important Tasmanian jobs at risk? The headlines seen after the collapse of the Tasmanian forest talks last week were completely predictable. There was this one, for example, from the Australian newspaper on 27 October: 'Green groups to resume campaign against sawmills after talks collapse'. The Australian reported that green groups would resume their 'war' against the Tasmanian timber industry, with the Wilderness Society, for example, saying it would campaign to cripple the activities of large Tasmanian sawmillers. A spokesperson said the technique it would use was to target the customers of major sawmillers. That is an all-too-familiar campaign.

So in the timber industry we see green groups once again going to war against producers, launching public campaigns against sawmillers and targeting customers—and using their tax-free income to do it. It would be completely naive to think that these green groups will not follow the same pattern in other primary industries. Of course, in the beef industry right now, with the World Wildlife Fund steering the Australian Roundtable for Sustainable Beef, or ARSB—including McDonald's, JBS, Cargill, the Cattle Council of Australia and others—it is completely predictable that the WWF is going to try to push beef producers towards sustainability criteria and an expensive certification scheme. I warn all primary producers that, just because the WWF or one of these other green NGOs is not knocking on your door right now, do not think it will not happen—it will. No primary producer should expect to be spared the threat of environmentalists trying to dictate how you can work your own property. Primary industry sectors will be picked off one by one by green groups like the WWF and Greenpeace—pushing expensive sustainability criteria schemes—unless producers stand together and tackle this issue right across primary industry.

In the case of the Australian timber industry, those industry groups and businesses that choose to go for a certification scheme for their products at least have a choice, apart from the green-NGO-dominated Forest Stewardship Council. They have the option of the Australian Forest Certification Scheme, or AFCS. AFCS Limited, the company that manages the scheme, says that the majority of certified forests in Australia—more than 10 million hectares—are certified under Australian Standard 4708, the Australian Standard for Sustainable Forest Management. AFCS in turn is endorsed internationally by a body called the Programme for the Endorsement of Forest Certification, or PEFC. The PEFC is an umbrella organisation. It claims to be the world's largest forest certification system, with more than 30 endorsed national certification systems and over 240 million hectares of certified forests. Of course, groups like Greenpeace in particular are critics of the PEFC. No doubt one of the aims of Greenpeace is to try to remove a commercial competitor for the Forest Stewardship Council organisation it is associated with and leave the Forest Stewardship Council as the only option for the industry, a monopoly organisation able to impose its own standards at its own prices, without fear of competition. That is a nightmare scenario. And make no mistake: these certification schemes, especially those originated by the green NGOs, are expensive for producers. There are costs associated with assessments and audits and use of logos, and on and on it goes, costing thousands and thousands of dollars.

In Rural and Regional Affairs and Transport Legislation Committee discussions about the legislation in December a figure of $100,000 was mentioned as to certification. I am not sure that figure is right and I do not claim it. I do not know if that figure is correct, but what you can be sure of is that it will result in a constant stream of income for the NGOs and their friends in associated businesses, like those in assessment and auditing. It is a very popular new business model for the green NGOs, and one they are intent on applying to more and more primary industry sectors. It is a good little earner. What happens with green NGOs working together is seen in the forestry model, where they support one certification body and criticise their commercial competitors. It goes beyond that, well beyond that, and our primary producers can expect to be exposed down the track to what is called NGO 'greenmail'; that is, blackmail with a radical environmental agenda. Former leading member of Greenpeace, Dr Patrick Moore, who has since become disenchanted with the organisation he helped to establish and left its ranks, wrote earlier this year about Greenpeace:

Greenpeace is threatening name-brand retailers and manufacturers who do not agree to a Greenpeace-backed wood fibre and paper policy that gives preference to one particular forest certifier—the Forest Stewardship Council, FSC—over all other forest certification bodies.

We have already seen green activists using exactly those sorts of tactics here. Last year, activists launched coordinated protests and stunts against retailer Harvey Norman. They climbed onto store rooftops and dangled from the Sydney Opera House with banners. Why? Because Harvey Norman sells furniture made from timber legally obtained from sustainable Australian forests. Then there was the Greenpeace Facebook campaign against the Bakers Delight chain, suggesting that it might soon be using genetically-modified ingredients in its bread products, generating customer confusion and concern. Greenpeace demanded Bakers Delight agree not to use GM products. Bakers Delight agreed. What Greenpeace never told any of those 'concerned consumers' was that there is no genetically-modified Australian wheat, and so Bakers Delight never considered using it in the first place. This was just another step in a broader Greenpeace campaign against GM products. Any damage done to the reputation or business of Bakers Delight clearly did not matter to Greenpeace.

Earlier this year, Dr David Pollard, Chief Executive Officer of the Australian Forest Products Association, said his organisation was 'deeply concerned' by misinformation being spread by extreme green groups to damage manufacturing and cause job losses in Australia. He referred to a group called Markets for Change, who have been telling customers for Australian wood products in Japan that PEFC certification is inadequate. In Dr Pollard's words:

This blatant attempt at commercial sabotage has two clear objectives: firstly, to close down a natural and sustainable industry in Australia and, secondly, to destroy the brand value of PEFC, the world's largest forest certification organisation, which currently certifies over 240 million hectares worldwide. Some environmental groups ... are on a quest to close down any industry that they take a dislike to—paying no regard to the facts (or) the science ...

If anyone thinks Greenpeace will not attack the beef industry in the same way it has the timber industry, they should think again. Queensland Country Life reported earlier this year that action by Greenpeace led directly to cancellation of orders for JBS Brazilian meat and leather across Europe. A Greenpeace report claimed JBS in Brazil was buying cattle raised on deforested regions in the Amazon, a claim JBS denied. Despite that denial by JBS, the British grocery chain Tesco cancelled its meat contract with JBS. Greenpeace also claimed four other JBS supermarket customers in the UK would not renew current contracts, along with the Dutch based Sligro Food Group and the Swedish based IKEA furniture chain, which was buying leather from JBS.

That is the way Greenpeace works, in cahoots with their mates in the WWF. The WWF cannot be trusted. One executive from the Cattle Council of Australia, sitting at WWF's Australian Roundtable for Sustainable Beef, has used the glib expression that 'if you're not at the table, then you're on the menu'. The WWF still wants to carve up Australian primary producers, and they made that blatantly obvious again just recently by once again attacking the beef and sugar industries in the Great Barrier Reef catchment.

On 2 October, the Australian Institute of Marine Science released a report saying that the Great Barrier Reef has lost some of its coral since studies commenced 27 years ago. One of the report's main authors, Dr Peter Doherty, stated:

In the northern Great Barrier Reef coral cover has remained relatively stable, whereas, in the southern regions, we see the most dramatic loss of coral, particularly over the last decade when storms have devastated many reefs.

Queensland senators in particular will remember the devastation caused in February 2011 by the massive Cyclone Yasi and the extensive damage from another category 5 cyclone, Cyclone Hamish, as it tracked south down the reef in March 2009. In fact, the AIMS report blamed the majority of the coral loss on cyclone damage, coral bleaching and, I think, the crown-of-thorns starfish. Well, what did WWF do? WWF blamed farmers for the loss of coral. In a media release on the same day, 2 October, a WWF spokesman said:

Revelations that chemical fertiliser pollution is driving the significant and ongoing loss of coral on the Great Barrier Reef highlights the urgent need for intervention by the Australian and Queensland Governments.

The WWF concludes its Great Barrier Reef media release by demanding that the Queensland government take tougher action on laws to cut farm run-off. This is the very same WWF some cattle producers sit down around the table with. WWF cannot be trusted, and primary producers should have nothing to do with them.

Just a week after WWF attacked Queensland farmers for single-handedly destroying the Great Barrier Reef, Australian fishermen found out what WWF really thinks about commercial fishing—especially trawling. The International President of WWF, Ms Yolanda Kakabadse, told the Australian media that trawling should be banned here. She was completely unequivocal in what she said:

Australia should show leadership and ban trawling altogether—

ban trawling altogether were her words—

to promote sustainable fishing in the region.

Of course, there are at least three Australian trawling fleets that are paying WWF big money to have their trawling operations given sustainability certification by WWF's Marine Stewardship Council, so the international president's ban trawling statement sent local WWF staff scrambling to put some backspin on her media comments. But Ms Kakabadse is no novice. She is a former federal Minister of Environment in Ecuador, and I am sure she meant what she said, 'Australia should ban trawling altogether'. So, now we know the endgame for WWF International, no matter what local WWF staffers might be telling us and the Australian fishing industry.

I again warn all primary producers to address this issue now. Just because it may not be happening to your sector right now, do not think it will not happen. It will happen. The question is not 'if' but simply 'when'. In the same way that our primary producers stand together to fight fires, floods and other threats, it is time to stand together to fight the scourge of 'greenmail' and the extortion attempts behind these extensive, expensive, unnecessary NGO-driven sustainability certification schemes. And they will be using their tax-exempt income to fund it!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I would like to thank all senators who have contributed to the debate. The establishment of the ACNC is positive and future-focused reform. It is evidence-based structural reform which review after review has recommended. It is reform which the NFP sector strongly supports.

The NFP sector is large and diverse, forming a key part of Australia's community and providing many important services to the disadvantaged and to those in need. As the NFP sector grows it is important to support the sector by smarter and better regulation. The NFP sector has made it clear that it wants an independent regulator with a greater focus on the needs of the sector. The ACNC will be that independent and dedicated regulator. The ACNC will drive a reduction in the regulatory burden on the NFP sector.

With the establishment of the ACNC we will have a platform for a national approach to NFP regulation. As the NFP sector grows it will be vital to support this growth by enabling the sector to consolidate its standing in the community through improved transparency and accountability.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

More red tape!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I note that a senator on the opposite side did interject there. A senator who sits there and votes against the deregulation of the wheat market should not really say anything about regulation. You really should not open up a debate about regulation when you are voting for more regulation in the wheat sector.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

No, I'm not.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Yes you are. We are voting to deregulate the wheat sector and you are saying no.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Let's see what you're doing!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You are saying no. So do not interject and distract in this debate; your credibility on this issue is zero, Senator Cormann, as you are going to continue to interject.

This government is undertaking forward-thinking and evidence-based reform now to avoid a knee-jerk regulatory response to any issues that may arise as the sector grows.

In conclusion, the Senate will vote shortly on legislation to establish the ACNC. It has taken many years to get to this position, but after numerous reviews and reports, extensive consultation and stakeholder engagement and three parliamentary inquiries into the ACNC bills, the time has come for this important reform. The government wants to support and sustain a vibrant, independent and innovative NFP sector. Those supporting these bills in the Senate today share this aim. I commend the bill to the Senate.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I seek leave to make a very short statement in relation to my second reading amendment. I will be less than 30 seconds.

Leave granted.

For the benefit of senators who are not familiar with it, this second reading amendment calls on the government to introduce legislation detailing the definition of 'charities' and 'charitable purposes', including a public benefit test, in the next 12 months.

Question negatived.

John Hogg (President) Share this | Link to this | Hansard source

The question is that the bills be now read a second time.