Proposed charity power grab isn’t very charitable

Posted on 14 Apr 2021

By Denis Moriarty, group managing director, Our Community

Australia has some 600,000 not-for-profit organisations, most with a board, so at least 3 million board members. It’s statistically highly improbable that any group of 3 million people is going to be entirely free of chancers, cheats, and unsavoury characters, so you’d think the body assigned the task of overseeing Australian not-for-profits would have enough on its hands to keep it busy. The government doesn’t seem to think so.

Denis CIC19 — Our Community group managing director Denis Moriarty

Assistant Treasurer Michael Sukkar is proposing to give the Australian Charities and Not-for-profits Commission (ACNC) a much wider range of powers.

Under its proposal, the ACNC would be able to deregister an organisation if it “reasonably believes” its members are likely to commit a summary offence (obstructing a footpath, say, or sticking a placard on a tree).

Mr Sukkar said that “political activists and organisations condoning criminal activities, while masquerading as charities, undermine Australians’ trust in the sector overall and do not deserve this privilege.”

The average member of the public might not see this as a big deal – why shouldn’t charities observe the law? The average Australian, though, tends not to realise just how many laws they break in an average day, let alone how many they break whenever they participate in a peaceful protest.

Most Australians get their ideas about rights from American television programs, and if asked would probably say that Australians had the right peaceably to assemble and to petition the government for a redress of grievances. No, we don’t.

That’s the US Bill of Rights. Australia doesn’t have one of those.

Giving police the option of criminalising active advocacy is bad enough. Giving similar powers to a government-nominated bureaucracy to do with as they see fit is rather worse.

I’m not naive. There are abuses in the system, and they should be rooted out. But this seems more about hobbling the kind of activists who are getting up the nose of the National Party. When it comes to actual wrongdoing, the ACNC doesn’t seem to think that’s its job.

Every now and again one of these cases hits the courts and the facts bubble to the surface, but when it does, it’s no thanks to the ACNC. Several years ago, for example, a couple split up and headed to the Family Court to divide their assets, including, they said, a not-for-profit charitable foundation registered with the ACNC. The foundation had been established in 1990 for the advancement of education, and in pursuit of this admirable goal it had accumulated some $2 million in gold, platinum and silver bullion.

It appeared, on closer examination, that the foundation had been set up for tax minimisation purposes and in 30 years no money had ever gone out of it to anybody. The couple now proposed to split it up between them. The ACNC didn’t think it necessary to get involved. The court, thankfully, decided that the charity urgently needed new trustees.

Myles McGregor-Lowndes and Frances Hannah, in their invaluable commentary for the Australian Centre for Philanthropy and Nonprofit Studies, pointed out: “It is a seeming failure of our charity regulatory system that a foundation could be established over 30 years ago and be largely dormant.”

The ACNC is apparently uninterested in (or incapable of) making a comparatively simple search through the online accounts of its charities to determine how many of them have shown no activity for five, or 10, or 30 years. I mean, the ACNC tells charities they have to hand in yearly financial statements. Why the devil are we sending these accounts to the ACNC if it can’t flag even the most obvious discrepancies?

I’m not asking the Commission to audit whether every local Scout group has its petty cash account up to date, but picking up something as absurdly blatant as $2 million in gold bars is surely not rocket science. And if the ACNC won’t finger major abuses, why are they suddenly interested in the not-for-profit equivalent of jaywalking and littering?

The answer dates back to Aesop.

A wolf was drinking at a stream. On looking up he saw a lamb. He called out to the lamb, “How dare you muddy my drinking water?”

“I’m downstream,” said the lamb.

“Why did you call me bad names this time last year?” said the wolf.

“I’m only six months old,” said the lamb.

“If it wasn’t you, it was your father,” snarled the wolf, and gobbled her up.

Moral: A tyrant will always find a summary offence.

Australians already have too few rights. Let’s tell Sukkar to butt out.

Denis Moriarty is group managing director of OurCommunity.com.au, a social enterprise helping Australia's 600,000 not-for-profits.