IT MADE very little noise on the political and media radar. For once, new Prime Minister Malcolm Turnbull stood up to the far-right of the Liberal Party. His government decided that the Australian Charities and Non-for-Profit Commission would not be abolished. When Tony Abbott was in charge, his agenda was to abolish the ACNC. The Catholic Church – a recipient of an enormous amount of charitable donation – did not want the scrutiny that was demanded by the legislation that set up by the ACNC legislation.
The Catholic Church, as we have seen in the past week, is not exactly a champion of transparency and accountability.
The evil priestly sexual abuse so secretively covered up over the years has double-edged financial implications. On one hand, if uncovered, it would lead to massive financial legal liability. The other edge of the sword is the reputational damage that could result in a substantial reduction in donations from the faithful who lose their faith, or even if they retain it are no longer willing to be a financial partner in an institution which has turned a blind eye to the evil.
The Catholic Church opposed transparency. Tony Abbott is a Catholic and a Catholic apologist. The Charities Commission stood for openness, transparency and accountability. Tony Abbott and Kevin Andrews agreed the Charities Commission should go.
It was proposed under the guise of reducing red tape. That guise does not stand up when you consider that, as most charities agree, the commission was cutting red tape, not increasing it. I was on the board of Barnardos, the children’s charity, for 10 years, five as chair. Before the one-stop-shop Charities Commission, compliance was a nightmare. Every state and territory had its own regime. Every raffle, every raising or spending in every jurisdiction required a paper trail, compliance and reporting multiplied by eight.
The Abbott-Andrews move to abolish the Charities Commission would from Day One have the effect of protecting the finances of the Catholic Church from greater scrutiny. It had nothing to do with cutting red tape, or efficiency, or protecting Australian donors from compliance costs. To the contrary, virtually every charity in Australia, except the Catholic Church, supported the commission – including Barnardos.
The commission made compliance easier. But more importantly it made the task of raising money easier because of the transparency. If donors could see balance sheets, profit and loss accounts, details of a staff, expenditure and the like all on a website, it would give them confidence to give.
Even small-time donors, who would not go near the details of charities’ financial lodgments on the website know there is a federal accountability procedure which gives them greater confidence that their donation is being properly spent.
I am not suggesting a crude ratio of administration-to-delivery. These things can be utterly artificial. Always suspect the claims like “we spend only 10% on administration; 90% percent goes to spending on the ground.” Sometimes under-spending on administration means the wrong trucks with the wrong food get hijacked by the wrong people because someone has not spent more of donors’ money getting the right trucks with the right food through the minefield of violence and corruption. Sometimes those costs might be 50 to 80 percent, but it is usually the only way of getting the other 20 to 50 percent to the people who need it and who would otherwise not get it.
We need to report this. We need to account for the money.
The Australian Charities and Non-for-profit Commission is world-class. Despite being under a cloud for two years it has done a terrific job in weeding out non-performing charities; demanding charities be accountable and transparent; giving rigor to the tax-deductibility regime; and helping to ensure that self-aggrandising individuals do not misuse the charitable cause.
And I happen to be on the board of a charity set up by an individual’s will and a lot of money under it, but we make sure (with the help of the wonders of the glaring website spotlight of the Charities Commission) that the money goes where it is supposed to go – in this instance to education of children in Papua New Guinea.
Importantly, the commission has teeth. A charity that fails to report two years in a row can be deregistered and lose its all-important tax-deductibility and tax-exempt status. About 2000 of the 13,000 registered charities are on that list.
Indeed, the website is a good example of using the internet to improve accountability. (Charity starts on the homepage.) The internet could be used to demand full, timely disclosure of political donations, for example. Or meetings between ministers and lobbyists.
The decision to keep the commission seemed to escape the political radar. Malcolm Turnbull did the right deed for the right reason. Apparently, no one on the right of the Liberal Party is willing to vehemently oppose the retention of the commission. It would be an obvious loser.
And herein lies a lesson. If Turnbull could reverse Abbott policy on the ACNC (and knighthoods and public transport, by the way) with impunity, he could have done it more broadly.
So often, people who get to powerful positions do not understand the breadth of that power and feel unnecessarily intimidated by opponents.
Turnbull should have put his stamp on things much earlier. He could, for example, have just reneged on the same-sex-marriage plebiscite and put a free vote to the Parliament a few days after taking the leadership.
The far-right of the Liberal Party would have squealed and cried foul. So what. That would have been no worse that what is happening now. And Turnbull would have retained some of the people excited by agile change but who have since been disenchanted.
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Last week, I wrote and submitted the column before the below-line optional preference compromise had been reached by the Greens and the Coalition. But the column was published after it. The column was correct at the time of writing, but wrong at the time of publishing. Apologies to anyone who was misled.
CRISPIN HULL
This article first appeared in The Canberra Times and other Fairfax Media on 12 March 2016.