Not-For-Profit Newsletter – March 2014
Published on March 18, 2014 by Josephine Heesh, Martin Slattery and Patricia Monemvasitis
Welcome to the March 2014 edition of our Not-for-profit Newsletter. This year proves to be another interesting year in terms of the establishment of the new charitable law regime and its implementation.
In this newsletter we report on recent developments in the consultation process determining the future powers and role of the ACNC including reporting on the results of extensive research and review of whether the ACNC has to date been effective in reducing the “red tape” burden on entities operating in the Not-for-profit sector.
In addition we report on:
- the new and controversial New South Wales mandatory sentencing legislation intended to be imposed in instances of violence where the alleged offender is under the influence of drugs and/or alcohol and the possibility this new legislation will have a detrimental impact on members of the Australian Indigenous population,
- DGR opportunities for schools and tertiary institutions,
- update on the Royal Commission Into Institutional Responses to Child Sexual Abuse,
- and of course, some Good News.
We hope you enjoy this month’s Newsletter and welcome your feedback.
The Carroll & O’Dea Not-for-profit Law Team
What’s Happening With ACNC?
Minister Kevin Andrews has not yet finalised his plans for the future of the ACNC.
He is publicly recorded as stating that it will be closed down but there is a consultation process underway presently where interested parties including the ACNC are placing submissions to his department concerning their opinions as to the future model for the ACNC. Minister Andrews has suggested it could be replaced by a “National Centre of Excellence for Civil Society” which would have an educative role in the not-for-profit sector. It is hoped that the Centre would retain the register which ACNC have built as a sector resource.
Meanwhile, Commissioner Susan Pascoe continues to circulate her Commissioner’s column and is focused on the achievements of ACNC during its first 12 months.
One of the main objections to ACNC which Minister Andrews has accepted is the increased reporting and red tape burden which has been placed on charities especially the small ones. In the Commissioner’s column published in Feb 28 (link) she indicates ACNC has commissioned research on that burden and has contracted Ernst & Young to conduct a high level survey. She also announced that incorporated associations and other entities lodging financial reports with State or Territory entities for 2014, could lodge the same report with ACNC as part of their Annual Information Statement. This should avoid some duplication. She also reports the results of a December 2013 forum (link) dealing with “measuring and reducing red tape in the not-for-profit sector”. The forum dealt with five themes.
- A national approach.
- The significance of risk.
- Outcomes especially how to measure them.
- Funding agreements and reporting.
- Sector capacity
Some matters contributed to the Forum discussion were:
1. National approach
The inability of ACNC to have a national approach has been a criticism of ACNC before its inception: incorporated associations are particularly burdened by the need to report in duplicate.Only South Australia and the ACT have, so far agreed to forego their regulatory regimes in favour of ACNC.COAG has not given the matter any priority. The Commissioner’s recent announcement that ACNC will accept financial reports filed with state and territory entities is a welcome development in this regard.
2. Risk
The Forum identified too much focus on risk and inadequate focus on outcomes.The not- for- profit sector should not be burdened with reporting regulations that go beyond those imposed on the for- profit sector.
3. Outcomes
Would bring a positive focus to the work of charity in lieu of the current focus of negative regulation.
4. Funding agreements and reporting
Funding and acquittals take up a large component of time devoted to red tape.The Forum suggested rather than acquittal, ie. how you spend money, outcomes should be measured, ie. what is done as a consequence of a not- for- profit’s activity.Government was encouraged to provide early notice in the final 12 months of a grant period as to whether it is to be renewed.
Concerning the requirement for reports, the Forum suggested that a helpful measure of whether a report is required was the test “if the Government had to pay for it, would it be required”.This ran parallel with the question of whether the information was for the benefit of the public or to ease administration for government.
5. Sector capacity
The Forum encouraged ACNC not to overburden charities especially those in regional, rural and remote Australia with unnecessary tasks which would reduce their effectiveness.
Annual Information Statement 2013
Any charity with an end of reporting period 30 June is reminded that its first Annual Information Statement must be lodged with ACNC by 31 March 2014. (See comment above on reports also lodged with state and territory authorities). If it is obliged to lodge a financial statement, that will be due by 31 December 2014. Link here. For any charities with 31 December end of year reporting period, the first Annual Information Statement must be lodged by 30 June 2014 and, if required, the first financial statement by 30 June 2015.
ACNC Advisory Board
The Advisory Board was set up with the inception of the ACNC. It comprises experts in law, taxation and accounting and makes recommendations to the Commission.
The Advisory Board met on 31 January 2014 and determined to develop a paper on “what constitutes good charity regulation”. We assume the paper will be submitted to Minister Andrews during the current consultation period to assist in his remodelling ACNC. Link here.
The critical areas which the paper covers are:
- Independence of decision making (free of sector, political or commercial influence).
- Effectiveness and efficiency in achieving clearly defined policy goals.
- Clarity, transparency and accountability.
- Fairness and natural justice in decision making and administrative processes.
- Integrity and certainty.
- Proportionality consistency and regulatory necessity.
- Understanding of and respect for the contribution of the sector.
- Integration consistency and support of the laws agreements and international obligations.
Author:
Josephine Heesh
Mandatory Sentencing And Indigenous Australians
The recent debate of the Crimes and Other Legislation Amendment (Assault and Intoxication) Act 2014 (‘the Act’) in New South Wales Parliament has sparked discussion of the impact mandatory sentencing has on Australia’s Indigenous population.
The Act is intended to ‘tackle drug- and alcohol-related violence’ by, according to Premier Barry O’Farrell, ‘promot[ing] personal responsibility of offenders’. The Act introduces an eight year mandatory prison sentence for “serious assault offences involving alcohol”. The legislation follows the deaths of Thomas Kelly and Daniel Christie, who were both assaulted in the Kings Cross area by offenders under the influence of alcohol.
However, the President of the New South Wales Bar Association, Phillip Boulton SC, has commented that “There’s no evidence at all that mandatory sentencing ever decreases the amount of crime that’s committed and it has the ability to act unfairly on vulnerable and disadvantaged groups.”
In particular, concerns have been raised about the potential impacts the proposed legislation may have on the State’s Indigenous population. Ray Jackson, from the Indigenous Social Justice Association, has commented that
Our people drink, our people fight, not all of them, but a minority do…And the coppers are going to concentrate on those people. They’re going to go before the courts, under mandatory sentencing and be slammed straight into jail
The current “legal package of reforms” also includes increases in the quantum of fines for public order offences such as offensive conduct or language (doubled to $500) and “failing to move on when intoxicated when asked by a police officer” (increased from $200 to $1,100). Julia Quilter from the University of Wollongong’s School of Law has raised concerns about the “flow-on effects” of such changes for Indigenous Australians, as the inability to pay such fines may result in the offender “going back into jail.”
Furthermore, John McKenzie from the NSW Aboriginal Legal Service has criticised the originally proposed introduction of mandatory sentences for “less serious assault charges”, including assault occasioning actual bodily harm, assaulting police and affray. McKenzie predicted that such mandatory sentences would be likely to put “an additional 1,000 Aboriginal prisoners [in gaol] each year”.
Australia has been criticised previously in the international arena for imposing mandatory sentences on offenders. In 1997, following the introduction of “three strikes”-style mandatory sentencing legislation focused on property crime'” in Western Australia and the Northern Territory, the United Nations Committee on the Rights of the Child raised concerns about:
the enactment of new legislation in two states, where a high percentage of Aboriginal people live, which provide for mandatory detention and punitive measures of juveniles, thus resulting in a high percentage of Aboriginal juveniles in detention.
Speaking on the Western Australian and Northern Territory legislation, Indigenous lawyer Megan Davis said
One of the main arguments in favour of Mandatory Sentencing is that the laws are not discriminatory but that they apply equally to everybody. But in fact the laws are in essence designed to target those property offences that are committed predominately by individuals who come from a low socio-economic background.
And what sector of the low socio-economic in Northern Territory and Western Australia predominately commit these offences? Indigenous Australians.
Davis further explained how curbing judicial discretion acutely affects Aboriginal Australians
Under Mandatory Sentencing laws a judge does not have the discretion to review all the facts the circumstances of a crime. The legislature effectively binds the discretion of the judiciary. And perhaps even worse for young indigenous Australians with an undeniable lack of trust in the police, it delivers judicial discretion further down the structure of the Administration of justice and essentially places greater power in the hands of law enforcement, the police
When asked to comment on whether the NSW Legislation would “disproportionately affect Aborigines” Premier Barry O’Farrell replied “’I don’t believe that’s the case’”.
The legislation came into effect earlier this month.
The Government has since narrowed the range of offences that will attach mandatory minimums, excluding less serious offences such as assault occasioning actual bodily harm. Furthermore, it has been announced that“mandatory minimums would only apply to offences that happened in public places”.
Author:
Patricia Monemvasitis
Merryn Lynch
The Royal Commission into Institutional Responses to Child Sexual Abuse – Update
The Royal Commission continues this month. There are three public hearings taking place in March – John Ellis and Salvation Army (Eastern Division) in Sydney, and St Ann’s Special School in Adelaide. Private sessions are also going to be held throughout the month.
The study into the findings of the John Ellis hearing began Monday 10 March. The hearing will address the Catholic Church’s response to John Ellis’ allegations of child sexual abuse. Mr Ellis’ complaint was addressed via the Towards Healing process and civil litigation. This case study will be the second time that the applicatrum discussion were:
The John Ellis hearing will also look at the civil proceedings commenced by Mr Ellis, and in particular the circumstances in which the Ellis defence was raised.
The Royal Commission is due to release its Interim Report by 30 June 2014.
Author:
Martin Slattery
Advancing Education: How To Become A Deductible Gift Recipient
Division 30-15 Income Tax Assessment Act 1997 lists the categories of institutions or funds within the area of Education which could attract DGR status.
Schools
Certain categories which would be most relevant to schools are contained in Item 2.
Item 2.1.10 – School Building funds;
Item 2.1.13 – Scholarships, bursaries or prizes funds; and possibly
Item 12.1.2 – A public library (though this would require the school allowing use of their library by the general public)
Other potential categories for schools include:
Item 2.1.8 – a fund for providing religious instruction in government schools in Australia, with a separate Item 2.1.9 for funds maintained by a Roman Catholic diocese to provide religious instruction in government schools in Australia
Item 2.1.9A – a fund for providing education in ethics in government schools in Australia as an alternative to religious instruction
Item 2.1.11 – a fund for a rural school hostel building; and
Item 2.1.12 – a government school which provides special education to permanently disabled children only, to secure DGR status.
Tertiary Education Institutions
If the educational institution is a tertiary institution, potential categories are also contained in Item 2:
Item 2.1.1 -a public university;
Item 2.1.2 – a fund for the establishment of the public university;
Item 2.1.3 – a higher education institution within the meaning of the Higher Education Support Act 2003
Item 2.1.4 – a residential education institution affiliated under statutory provisions with a public university;
Item 2.1.6 – a residential education institution that is affiliated with a higher education institution; and
Item 2.1.7 – an institution that the Education Minister has determined to be a technical and further education institution under the Student Assistance Act 1973
Building Fund
Any funds raised must be applied towards building acquisition, construction or maintenance expenditure. A trust deed with a body corporate trustee is usually signed to create the fund, and it must have its own bank account.
Sholarship Fund
The documents to establish a scholarship fund because there are certain non negotiable provisions they must contain dealing with:-
- Eligibility to all Australians to make an application.
- Provision that awards are based on merit or need; and
- Distribution on a winding up to another scholarship fund.
All references above to a “fund” are references to a “public fund”. This means the fund must raise money from the public and allow the public a role in administration of the fund. This would be done by appointing persons to management committees for the funds who hold positions of responsibility in the community. The fund document needs to stipulate that it operates on a non-profit basis and that on its dissolution any surplus would be paid to another fund with like objects and DGR status.
Author: Josephine Heesh
The Good News
‘Separation of Church and Alcohol?’
An applicant, confident of his powers of persuasion, recently filed in Greece the trade mark (image below) for alcoholic beverages, namely ‘tsipouro’ – the aniseed national flavoured drink of Greece. Translated, the words appearing at the top of the logo translated to English are: ‘Chrism’ i.e.: consecrated oil used in Greek Orthodox religion.
The Greek Trade Mark Examiner did not like the taste of this application and rejected it on the grounds that the blatant religious subtext of the brand contravened Greek Trade Mark law, which has a rule explicitly outlawing registration of marks comprising religious symbols.
In Australia, this has become an ever-controversial area and the intersection of law, politics and religion is certain to get people talking. Guidance on this point is provided by section 42 of the Trade Marks Act 1995 (Cth) which states that a trade mark must be rejected if it contains or consists of “scandalous matter” which, among other factors, is often interpreted as having a “religious nexus”.
