The charity sector will save millions of dollars every year as reforms to reduce the burden on the sector take effect today, allowing more money to go towards supporting Australians and building stronger communities.
Charities under the small charity and medium charity thresholds are subject to lower reporting burdens, so raising the thresholds reduces the compliance burden for charities.
As of today:
- The annual revenue threshold for small charities will increase from $250,000 to $500,000 annual revenue. This will help 2,500 charities, removing their obligation to produce reviewed financial statements and saving each charity around $2,400 in accounting expenses annually.
- The annual revenue threshold for medium charities will increase from $1 million to $3 million. This will help 2,700 charities which will no longer need to produce audited financial statements. This will result in savings of around $3,000 for each charity, each year.
These changes come into effect for the 2022 Annual Information Statement (AIS), reducing the accounting expenses faced by charities as they prepare reports on their operations in the 2021-22 financial year.
More than 18,000 charities will also benefit from increased flexibility in their AIS reporting requirements. From today, small charities using cash accounting will have the option to provide a short, written description of their assets and liabilities, without providing balance sheet figures in the 2022 AIS and onwards.
Assistant Minster for Competition, Charities and Treasury Andrew Leigh said charities are the first line of support for the most vulnerable in Australia.
“The sector’s staff and volunteers have helped millions of Australians rebuild their lives after floods and fires, and have kept communities together in the face of falling volunteer numbers and a decline in donations,” he said.
“Despite the sector’s vital role in Australian society, the Coalition waged a nine-year war on charities. That war ended on 21 May 2022.
“In the new Australian Government, charities have a true partner, one which respects their role, and wants to empower them to help the community. We will continue to work collaboratively with charities to reconnect Australia.”