The Gillard Government today commenced public consultation on exposure draft legislation for a statutory definition of charity.
"The meaning of charity and charitable purpose has not been previously comprehensively defined for the purposes of Commonwealth law," said Assistant Treasurer David Bradbury.
"It has been administered on the basis of principles derived from the common law, going all the way back to the Statute of Elizabeth of 1601.
"Charities are such an important part of the Australian community and deserve a modern regulatory framework which will support them as they grow into the future."
"Having a clear and succinct definition of charity set out in legislation will cut down on compliance costs for those wishing to establish charities and make the definition more accessible to the community.
The draft legislation preserves the common law definition of charity, including long established principles such as the presumption of public benefit for certain charitable purposes. It also incorporates recent court decisions, such as Aid/Watch Incorporated v Federal Commissioner of Taxation, which extended the circumstances in which a charity may advance public debate. Feedback provided in response to the 2011 consultation paper A Definition of Charity has also been incorporated.
Importantly, the draft legislation retains the flexibility inherent in the common law that enables the courts, as well as Parliament, to continue to develop the definition and extend the definition to other charitable purposes beneficial to contemporary Australia. This will ensure that the definition remains appropriate and reflects modern society and community needs as they evolve over time.
"The Gillard Government has a comprehensive NFP sector reform agenda to strengthen the sector and support the important work it does in our community everyday" said the Minister for Social Inclusion, Mark Butler.
"We have established Australia's first independent charities regulator, the Australian Charities and Not-for-profits Commission, and are legislating to ban gag clauses in Commonwealth contracts with the NFP sector.
"We look forward to continuing to work closely with the NFP sector as we progress reform, and encourage stakeholders to provide input and feedback on this draft legislation."
The proposed start date for the statutory definition of charity will now be 1 January 2014.
The draft legislation, explanatory materials and a fact sheet are available at the Treasury website.
Submissions close on 3 May 2013.