The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Chris Bowen

Assistant Treasurer and Minister for Competition Policy and Consumer Affairs

3 December 2007 - 8 June 2009

Media Release of 17/03/2009

NO.017

Joint Media Release with
the Hon Julia Gillard MP
Deputy Prime Minister
and
Senator the Hon Ursula Stephens
Parliamentary Secretary for Social Inclusion and the Voluntary Sector

Productivity Commission to Review the Contribution of the Not-For-Profit Sector

The Deputy Prime Minister, the Hon Julia Gillard MP, the Assistant Treasurer, the Hon Chris Bowen MP, and the Parliamentary Secretary for Social Inclusion and the Voluntary Sector, Senator the Hon Ursula Stephens, today announced that the Productivity Commission will examine the contribution of the not-for-profit sector to Australian society.

The announcement fulfils an election commitment to maximise the sector's contribution to social inclusion, employment and economic growth, by leveraging off the Productivity Commission's Study.

"Not-for-profit or non-profit organisations are critical to building a fairer and stronger Australia, and enhancing the economic, social, cultural and environmental well-being of society.  The study will be important in informing the delivery and advancement of the Rudd Government's Social Inclusion Agenda," Ms Gillard said.

The Productivity Commission (the Commission) has been asked to assess how the not-for-profit sector's contributions to Australian society are currently measured and whether these measures can be improved.

The Government has also asked the Commission to identify ways to improve the efficiency and effectiveness of community organisations, and to consider options for improving the delivery of government-funded services by these organisations.

The Commission is required to provide a final report by the end of 2009.

"Any policy reform in this area will be aimed at strengthening the community sector's capacity to deliver services in response to community needs", Mr Bowen said.

"Mr Dennis Trewin AO has been appointed to the Productivity Commission as an Associate Commissioner for this study. Mr Trewin was the Australian Statistician and head of the Australian Bureau of Statistics from July 2000 until January 2007.  He has more recently been working as a statistical consultant and has recently completed assignments with the UN, OECD and World Bank."

"The skills and experience of Mr Trewin make him highly suited to the task.  In particular, his broad experience and leadership in the application of official statistics to the research and analysis of social issues make him well qualified in the role."

"The Productivity Commission study will help us gain a greater insight into the valuable work the not-for-profit sector does within our communities and the breadth of services it provides, particularly to those experiencing entrenched disadvantage," Senator Stephens said.

"The study will help improve the way in which the not‑for‑profit sector operates and make it easier for organisations working in the sector to be effective."

As part of the review process, the Commission will provide an opportunity for public participation.  All interested parties are invited to make a submission.

To register an interest in the study or to find out more, details are available from the Commission at www.pc.gov.au or by calling 02 6240 3239.

The terms of reference for the review are attached.


Attachment

Terms of Reference
Reviews of the Contribution of the Not-For-Profit Sector

Background

The Australian Government is committed to an active policy of social inclusion oriented to ensuring the economic and social participation of all Australians irrespective of their circumstances.  Community (not-for-profit) organisations play an important role in combating social exclusion and enhancing the economic, social, cultural and environmental well-being of society.

The Government is committed to finding the best solutions to problems of social exclusion by ensuring the not-for-profit, private and government sectors work together effectively, and by using evidence-based programs and policies.  In this context, measurement of the contributions of community organisations, and identification of ways to enhance those contributions, are important.

Further, the Government acknowledges the changing relationships between government, business and community organisations, and wants to explore their impacts and future opportunities for optimising such relationships to further the well‑being of society.

The not-for-profit sector has evolved considerably since past examinations, including the Report of the former Industry Commission in 1995 on Charitable Organisations in Australia and the Australian Bureau of Statistics' work in 2002 within the national accounting framework, Non-Profit Institutions Satellite Account.

Scope of the review

The Productivity Commission is requested to undertake a research study on the contributions of the not-for-profit sector with a focus on improving the measurement of its contributions and on removing obstacles to maximising its contributions to society.  In undertaking the study, the Commission is to:

  • assess the extent to which the not-for-profit sector's contributions to Australian society are currently measured, the utility of such measurements and the possible uses of such measurements in helping shape government policy and programs;
  • consider alternatives for, or improvements in, such measurements, or further quantitative and/or qualitative means of capturing the not-for-profit sector's full contribution to society;
  • identify unnecessary burdens or impediments to the efficient and effective operation of community organisations generally, including unnecessary or ineffective regulatory requirements and governance arrangements, while having regard to the need to maintain transparency and accountability;
  • consider options for improving the efficient and effective delivery of government-funded services by community organisations, including improved funding, contractual and reporting arrangements with government, while having regard to the need for transparency and accountability;
  • examine the changing nature of relationships between government, business and community organisations in recent times, their general impacts, and opportunities to enhance such relationships to optimise outcomes by the sector and its contribution to society;
  • examine the extent to which tax deductibility influences both decisions to donate and the overall pool of philanthropic funds; and
  • examine the extent to which tax exemptions accessed by the commercial operations of not‑for-profit organisations may affect the competitive neutrality of the market.

In conducting the study, the Commission is to:

  • adopt in its considerations a broad definition of the not-for-profit sector to encompass most categories of not-for-profit organisations, including Australian-based international aid and development agencies;
  • seek public submissions and consult widely with State and Territory governments, government agencies, the community sector, business, and other interested parties;
  • have regard to the Government's Taxation Review headed by Dr Ken Henry and the Inquiry into the Definition of Charities and other organisations commissioned in 2002, but, other than as explicitly required by these terms of reference, not to examine in detail matters covered by those reviews; and
  • have regard to any other relevant current or recent measurements and reviews conducted in Australia and internationally.
  • The Commission is to produce and publish a draft report and final report by the end of 2009