Thursday, 14 February 2019
Select Committee on Charity Fundraising in the 21st Century; Report
I present the report of the Select Committee on Charity Fundraising in the 21st Century, together with the Hansard record of proceedings and documents present to the committee. I move:
That the Senate take note of the report.
We will soon enter the third decade of the 21st century. While the last 20 years have seen a rapid change in the way people interact with each other and the organisations and causes that they care about and support, our patchwork of state and territory laws require charities to seek permission from six states plus the Australian Capital Territory to raise funds for charity. With increasing levels of fundraising being conducted online and at a national level, it is an anachronism that charities seeking to give their fundraising efforts nationwide reach have to jump through seven regulatory hoops. Outdated and fragmented regulations hurt charities, donors and the people and the causes that charities and not-for-profits are there to help. Change is needed.
The inquiry arose from the hard work and efforts of stakeholders in the sector, in particular the Fix Fundraising campaign, which put the spotlight on the need for urgent, long overdue reform. The vast majority of submissions and evidence received by the committee agreed that the current regulatory environment is broken and a new and nationally consistent legislative scheme is needed. Numerous witnesses expressed their frustration that, despite reform being on the agenda for 23 years, it has not received the action it deserves. Over the years numerous parliamentary inquiries and government reviews have been undertaken into the regulatory framework governing fundraising activities in Australia. The most recent review has been the Australian Charities and Not-for-profits Commission legislation review of 2018. The review of the ACNC Act, which was undertaken by an independent panel, made several recommendations relevant to fundraising regulation, including the recommendation that the Australian Consumer Law be amended to make clear that it applies to charitable and not-for-profit fundraising activities. The panel's recommendations to use the ACL, which is enforced jointly by the ACCC and state and territory consumer affairs agencies, to regulate misconduct by charitable and not-for-profit fundraisers has the support of many stakeholders within the sector.
Witnesses appearing before the committee described their experience of the current regulatory system as chaotic, appalling, ridiculous, anachronistic and having no policy basis. An extreme case of outdated regulation was mentioned by several witnesses, who referred to the Street Collections (Regulation) Act 1940 in Western Australia, which makes it illegal to collect money with a tin on the end of a long pole. This law was inherited from London's 1903 Metropolitan Streets Act and is still on the books in Western Australia.
Given the unanimous calls for reform, the only remaining question is how that reform should best be delivered. Some key issues identified during the inquiry that underscore the unnecessary regulatory burden that charities and not-for-profits face under the current system include complexity, high compliance costs, inefficient allocation of resources and non-compliance and enforcement issues. The committee heard from a significant number of submitters describing the complexity of the current fragmented framework and its impact on their organisations. The committee heard that, with up to seven layers of regulations to comply with, no consistency in the interpretation of regulations and no agreed definitions of common terms such as 'charity' and 'fundraising', some organisations simply chose to give up and not undertake fundraising campaigns due to the complexity and costs they are faced with.
Deloitte Access Economics have reported that the regulatory burden associated with fundraising is estimated to cost the charity sector $15.1 million each year, and millions more when other not-for-profits are included. That figure is considered a gross understatement by some stakeholders in the sector. The committee heard that the time and resources diverted by charities towards meeting their compliance obligations was not productive and could be more effectively directed towards actually achieving their charitable objectives.
The committee came up with two recommendations. There are only two, but they're very important recommendations. Firstly, the government must as a matter of priority turn its mind to the ACNC legislation review panel's recommendations and table a formal response to the panel's recommendations urgently. This will provide the foundation for future action. And, secondly, the Australian government must commit to work with state and territory governments in the sector to develop a consistent national model for regulating charitable and not-for-profit fundraising activities within a time limit of two years. Committing to a clear time frame with the Commonwealth and taking the lead in negotiations with the states will provide assurances to the sector that their long-overdue request for a truly national scheme that is simple, modern and universally applicable will be released.
Quickly, in the last couple of seconds, I'd like to thank my fellow committee members for their work on this report, which I'm happy to say is a unanimous report. On behalf of the committee I'd like to thank the secretariat, in particular committee secretary Bonnie Allan and Leonie Lam, for their hard work supporting the committee through this inquiry. I'd also, finally, like to thank the witnesses who fronted the committee hearings or made written submissions. Your evidence gave the real, concrete examples of challenges charities and not-for-profit organisations face on the ground each day from this fragmented, outdated and ineffective regulation.
The first calls for reform were made over two decades ago. This inquiry is the best opportunity to effect real and tangible change for the sector. I commend the report to the Senate and I seek leave to continue my remarks.
Leave granted; debate adjourned.