The Gillard Government's commitment to introduce a new statutory definition of charity to clarify exactly what does - and does not - qualify as a 'charity' and as a 'charitable purpose' is a step closer following the release of a consultation paper today.
Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, said "The current definition of charity is based on the 1601 Statute of Elizabeth, with over 400 years worth of often confusing case law added on top."
He said a single national definition will make it easier for charities to navigate state and federal regulations, allowing them to spend less time on administration and more time doing what they do best - helping people.
"It is well past time Australia cleans up this mess and creates a modern, workable and Australian definition of charity to clarify the work of our important and valuable not-for-profit sector. I am very pleased to announce that Senator Ursula Stephens has been appointed as a specialist adviser to assist me with the consultation process."
The Government is seeking the views of charities and other stakeholders on a definition of charity and charitable purposes. The consultation builds on a range of previous inquiries including the 2001 Report of the Inquiry into the Definition of Charities and Related Organisations, the Charities Bill 2003 and recent court decisions including the High Court's decision in Aid/Watch Incorporated v the Commissioner of Taxation.
As this is the first round of consultation on this issue, the Government is seeking important feedback from the community. The Government wants to hear from the sector about how a single definition can best serve the needs of not-for-profits and their clients, as well as encourage charitable giving. The Government will also consult on an exposure draft of the legislation in the first half of next year.
The Government is also working with the States and Territories to achieve greater harmonisation between the Commonwealth and the States and Territories through the Council of Australia Governments.
Minister for Social Inclusion, Tanya Plibersek, said "Charities provide vital services to the Australian community. We want not-for-profits to be able to direct their resources to charitable work rather than unnecessarily complex administration."
"By establishing a modern and workable definition of 'charity' the Government is reducing compliance burden for the sector and making it easier for charities to get on with the job of providing charitable services."
The Consultation paper is available at the Treasury website. Submissions are due on 9 December 2011.
The Implementation Taskforce for the Australian Charities and Not for profit Commission (ACNC), announced in the May Budget, is also well on track.
The Taskforce is responsible for ensuring the ACNC is ready for operation by 1 July 2012. The ACNC will be responsible for determining the legal status of groups seeking charitable, public benevolent institution, and other not-for-profit benefits on behalf of all Commonwealth agencies.
The ACNC will also implement a 'report-once use-often' reporting framework for charities, provide education and support to the sector on technical matters, and establish a public information portal by 1 July 2013.
Minister Plibersek said the Interim Commissioner and Chair of the Taskforce, Susan Pascoe AM, has assembled a strong team from across Government to establish the ACNC.
"I am delighted that David Locke, Executive Director of Charity Services, from the Charity Commission of England and Wales has been brought on board the Taskforce to provide expert guidance based on international experience.
Treasury has also recently brought together all of its work on the Government's important not-for-profit reform agenda into one place on its website - www.treasury.gov.au.
"Charities make an important contribution to Australian society, and receive a range of support from Commonwealth, state, territory and local governments, in the form of tax concessions and grants, and the public in terms of donations and volunteering," Mr Shorten said.
"It therefore is important there is a clear framework for both the public and regulatory agencies for recognising entities as charitable. The introduction of a definition of charity will, over time, go a long way to provide the sector with the certainty and clarity they are calling for."