Senate Economics Committee Inquiry into Disclosure Regimes for charities and notforprofit

AICD believes that a ‘light touch’ needs to be applied in reforming not-for-profit (NFP) regulation so that volunteers and donors are not dissuaded by red tape from contributing their time, expertise and money to the sector. Cost burdens need to be balanced against the benefits of any regulatory regime.

Key points from our submission:

• There should be a single national regulatory regime covering all NFPs, however constituted based on size thresholds
• The single national regulator – whether it be ASIC or a standalone regulator – needs to be adequately resourced to undertake both an educative and a compliance role
• The business judgement rule (see s180(2) Corporations Act 2001) should be expanded to regulation affecting NFPs so as not to dissuade people from taking up directorships in the sector
• Further research should be conducted into size thresholds to provide reporting and auditing relief for smaller NFPs
• A separate NFP accounting standard should be created, including appropriate recognition of the needs of small NFPs
• There should be a single method of reporting to government grantors
• AICD strongly urges the Committee to consider the vast body of past and concurrent work that has already been done in this complex area.
• Any new regulation of the NFP sector should be reviewed in light of the Business Checklist for Commonwealth Regulatory Proposals