Australian Council of Social Service

1. Australian Council of Social Service Charity Law and the NFP Reforms Dr Tessa Boyd-Caine, Deputy CEO, ACOSS ACOSS Charity Law Briefing Sydney, 10 August 2012 Supported by NAB

2. Principles to define a charity,Charity Definition Inquiry 2001 That the term `not-for-profit' be adopted in place of the term `non-profit' for the purposes of defining a charity. That a charity must have a dominant purpose or purposes that are charitable, altruistic and for the public benefit. That the public benefit test continue; that is, to be of public benefit a purpose must: be aimed at achieving a universal or common good; have practical utility; and be directed to the benefit of the general community or a `sufficient section of the community‘. That the public benefit test be strengthened by requiring that the dominant purpose of a charitable entity must be altruistic.

3. CDI recommended charitable purposes as: the advancement of health, which without limitation includes the prevention and relief of sickness, disease or of human suffering; the advancement of education; the advancement of social and community welfare, which without limitation includes: the prevention and relief of poverty, distress or disadvantage of individuals or families; the care, support and protection of the aged and people with a disability; the care, support and protection of children and young people; the promotion of community development to enhance social and economic participation; and the care and support of members or former members of the armed forces and the civil defence forces and their families; the advancement of religion; the advancement of culture, which without limitation includes: the promotion and fostering of culture; and the care, preservation and protection of the Australian heritage; the advancement of the natural environment; and other purposes beneficial to the community, which without limitation include: the promotion and protection of civil and human rights; and the prevention and relief of suffering of animals. (Advancement is taken to include protection, maintenance, support, research, improvement or enhancement.)

4. Current status of definition reform Treasury released a discussion paper in November 2011. Key issue from ACOSS perspective remains protecting advocacy as legitimate charitable activity, in line with Aid/Watch decision. The argument for a legislative basis is to enshrine the legitimacy of advocacy and to ensure that advocacy organisations are able to access the tax concessions that show society’s support for this charitable purpose. Without a strong framework legitimising advocacy within charitable purpose we undermine. the viability of advocacy organisations and reduce their access to non-government sources of funding, particularly philanthropic. Joint COSS submission on Treasury discussion paper, Nov 2011: http://acoss.org.au/images/uploads/COSS_Network_charity_def_submn_FINAL.pdf Modernised definition scheduled for introduction by 1 July 2013.

5. New approach to public benefit? Consideration of new approach to the public benefit test: attracted different views across the sector. COSSes argued for CDI 2001 recommendation, and that the presumption of public benefit should remain as is until the ACNC is established and operational to explore the potential of removing the presumption of public benefit if necessary. The most important recommendation from the 2001 Inquiry was not the statutory definition of charity itself; it was the proposed reform of Public Benevolent Institution (PBI) status as that subset of charities whose main purpose was to assist the most disadvantaged in the community, regardless of whether this was via direct service provision. From a taxation standpoint, PBI status is much more important than charitable status alone, as it includes gift deductibility. Ironically, although this was first established with 'traditional charities' in mind, the scope of gift deductibility in the community and social services sector has lagged behind developments elsewhere, such as environmental organisations .(Joint COSS submission on Treasury consultation paper, ‘A definition of charity’, Jan 2012)

6. Right to housing CDI 2001 recommended reforms to ensure consistent treatment of charitable activities of child care and housing. Child care has been legislated for. Housing remains without recognition as legitimate charitable activity. Key issue is capacity to attain tax concessions and consistency of application of those tax concessions. Likely to be contested issue in this reform, particularly as policy directions no longer seem to be grounded in the CDI report.

7. Outstanding questions What appetite for another significant reform? Is it enough to codify common law definition as currently stands, ie on basis of AidWatch case and other principles as outlined? How do we ensure that the support provided to charitable institutions, including through tax concessions, flows fairly across the sector?

8. Thank you • Tessa.Boyd-Caine@acoss.org.au • For more information, visit ACOSS sector development materials at, http://acoss.org.au/papers/category_sector_development/38