Charities Consultative Committee minutes - 20 September 2011
Charities Consultative Committee minutes - 20 September 2011
Venue:
|
Kembery building
Room N8.20/S8.04
Skybridge Conference Room
21 Genge Street
Canberra
|
|
|
Date:
|
20 September 2011
|
|
|
Start:
|
10.00am
|
Finish:
|
3.00pm
|
Chair:
|
Michael Hardy
|
|
|
Contact and Secretariat:
|
Richard Gates
|
Contact phone:
|
(03) 9275 2415
|
Attendees
Community members
|
Father Brian Lucas
|
Australian Catholic Bishops Conference
|
John McIntosh
|
Salvation Army
|
Peter Kell
|
Anglicare
|
David Thompson
|
Australian Council of Social Services, ACOSS
|
Joe Zabar
|
UnitingCare Australia
|
Amanda Power
|
St John Ambulance Australia
|
Tim Morris-Smith
|
Mission Australia
|
Eddy Bourke
|
Community Housing
|
Ken Baker
|
National Disability Services
|
Barry Wallet
|
Independent Schools Council of Australia
|
Australian Taxation Office
|
Michael Hardy
|
Assistant Commissioner, ACNC Implementation Project
|
Jason Aitchison
|
Director, Government Engagement and NPC National Office
|
Amy Land Pejoska
|
Government Engagement and NPC National Office
|
Tom Lo
|
GST Interpretation and Advice
|
Richard Gates
|
Marketing, Education & Alliances, Small & Medium Enterprises
|
Treasury
|
Chris Leggett
|
Manager, Philanthropy and Exemptions Unit
|
Tamara Hartwich
|
Senior Adviser, Philanthropy and Exemptions Unit
|
Ciara Jones
|
Philanthropy and Exemptions Unit
|
Patrick Bustamante
|
Philanthropy and Exemptions Unit
|
Fiona McLaren
|
Philanthropy and Exemptions Unit
|
Martin Jacobs
|
Principal Adviser, Personal and Retirement Income Division
|
Aaron Jenkinson
|
Markets Group
|
Michael Dylewski
|
Markets Group
|
Ashley Bell
|
Philanthropy and Exemptions Unit
|
Australian Charities and Not-for-profit Commission (ACNC) Taskforce
|
Susan Pascoe
|
Chair ACNC Taskforce
|
Sophie Evreniadis
|
ACNC Taskforce
|
Erin Flynn
|
ACNC Taskforce
|
Apologies
Rob Gardiner
|
Product and Risk Manager, Fringe Benefits Tax
|
Myles McGregor-Lowndes
|
Centre of Philanthropy and Nonprofit Studies Qld University of Technology
|
Greg Smith
|
National Disability Services
|
Carol Croce
|
Community Housing
|
Martyn Lyons
|
Director Risk and Strategy Government and NFP
|
Disclaimer
Charities Consultative Committee (CCC) agendas, minutes and related papers are not binding on the Australian Taxation Office (ATO) or any of the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.
Michael Hardy opened the meeting welcoming all attendees.
Members were advised future CCC meetings in the short term would be very much ACNC and charity law focussed ahead of discussing tax law administration topics. He explained that the ATO has restructured to allow ensure that the staff working on charity status matters would be structurally separate from the staff working on tax concession matters are required in the Federal budget. The ATO was also assisting the ACNC Taskforce in Treasury, by undertaking to develop the IT infrastructure, undertaking the recruiting of initial staff (to ACNC Taskforce specifications), securing accommodation for the ACNC and working out how to deliver corporate support.
The minutes from the previous meeting, held on 19 July 2011 in Brisbane, were accepted.
Update on action items
Action item
|
1
|
Description
|
Discussions on Public Ancillary Funds and the release of the Exposure Draft - Legislative Framework for Public Ancillary Funds
|
Responsibility
|
Treasury/ATO
|
Due date
|
Completed 8 August 2011
|
Action item
|
2
|
Description
|
Advise whether Open University will result in an ATO Determination. Response - Presently, the ATO isn't considering a determination as the Open University decision has been based on the ATO view contained in the draft ruling (TR 2011/D2) expected to issue as final in mid October.
|
Responsibility
|
Michael Hardy
|
Due date
|
Completed
|
Action item
|
3
|
Description
|
Receipting issues on fundraising
|
Responsibility
|
Jason Aitchison - Response - We have been working on best ways of receipting from the ATO's perspective, working through questions asked by the forum. Proposing to form a small committee for discussion of receipting issues.
|
Due date
|
22 November 2011
|
Action item
|
4
|
Description
|
Include a link to the ACNC Taskforce website from the ATO Non-profit homepage
|
Responsibility
|
Michael Hardy
|
Due date
|
Will include link as soon as page is up - due mid October
|
Action item
|
5
|
Description
|
Address lag time issues around NP news service as soon as possible.
|
Responsibility
|
Michael Hardy - members advised that NP news service was much better now.
|
Due date
|
Completed
|
Action item
|
6
|
Description
|
Release of Non-profit self governance tool. Finalising tool for public release expected to be around the end of October. CCC members will be advised directly with the wider sector advised via non-profit news service.
|
Responsibility
|
Michael Hardy - Governance tool is out now and advice was sent via NP news service.
|
Due date
|
Completed
|
Summary of action items from this meeting
Action item
|
1
|
Description
|
Receipting issues on fundraising - forming a small committee for discussion of receipting issues.
|
Responsibility
|
CCC members - indicate willingness to be part of committee. Any volunteers contact Richard Gates. Richard Gates to send a reminder email out when circulating the draft minutes.
|
Due date
|
22 November 2011
|
Action item
|
2
|
Description
|
Clarify how communication and coordination occurs between Minister Plibersek and Minister Shorten and indicate this on the 'mud map'.
|
Responsibility
|
Susan Pascoe
|
Due date
|
22 November 2011
|
In the Compliance program 2011-12 it is noted that:
Some religious organisations continue to encounter difficulties with compliance. Some detect this through their internal governance processes and approach us for assistance to correct errors and mistakes. In other instances we may identify a need to intervene where parts of a religious organisation no longer operate in a way consistent with their tax-concession endorsements.
We will work with the broader religious community to deliver our key messages. We will do this before we undertake reviews to ensure they are using tax concessions appropriately for the benefit of the community.
The ATO added that the idea is for the self governance tool to assist organisations with their governance, for example, in detecting errors and promptly approaching the ATO for assistance.
It was inadvertently advised that an ATO letter campaign to verify organisations' status and intent would begin in November 2011. The following process will actually be undertaken:
- the ATO will work through peak bodies relating to religious organisations to ascertain current issues and problems
- there will be discussion around what the bodies think would be the best way to communicate with them to gain the most effective outcome, and
- contact would most likely take place early in the New Year.
Some discussion followed, including:
- An industry representative asked if there are privacy issues - in a religious structure can a regional unit be informed about the tax position of a local unit. Another member said this is a problem.
- The ATO clarified that the ATO must have permission to discuss tax affairs with a third party. The preference would be to deal with it at a higher level such as the parent body or regional unit, but the ATO would need permission of the local unit to do this.
- An industry representative offered that regional unit leaders could write to local units if they became aware that local accountants for example were providing inaccurate advice to and give them two months to correct their affairs. This offer was received by the ATO as an attractive one to be pursued.
An ad hoc ATO phone survey was conducted in April 2011. It was prompted by the desire to gain a deeper understanding of some comments about the ATO in the responses to a Treasury discussion paper released earlier in the year - A scoping study for a national not-for-profit regulator.
The ATO's corporate communication area conducted the ad hoc survey with some of the people who responded to the Treasury scoping study, but their identity was not disclosed to anyone outside of the corporate communication area. A summary of the results was distributed to members.
There was some discussion about the results of the survey, and the Treasury consultation, including the following:
- It was agreed that the submissions to the scoping study were not a representative sample of the NFP sector.
- The overall results of the ATO ad hoc survey gave a slightly positive impression of ATO administration.
- The ATO noted that one surprising result was that responses indicated that people felt the ATO compliance activity was too hard and too soft. This feedback was hard to reconcile.
- Another broader online NFP community - ATO forum was supported, but it is not essential for current work on establishing the ACNC. While acknowledging that the idea is good, the ATO noted that due to pressing other priorities it will not be pursued in the short term.
Ms Pascoe advised the following updates:
- David Locke from the United Kingdom Charities Commission is joining the Taskforce to assist with the ACNC implementation for three months. David had oversight of the charity portal in the United Kingdom.
- ATO Second Commissioner Bruce Quigley has oversight of ACNC implementation within the ATO and the project has been given Tier 1 priority which is the highest level in the ATO project management system.
Members were walked through the Communication Framework for the ACNC Taskforce. Some upcoming highlights are the launch of a YouTube channel for the ACNC Taskforce by 19 October 2011, and the launch of the ACNC Taskforce website by the end of September. The five phases of the Communication strategy were presented and a diagram and draft paper provided to members.
The ACNC Taskforce is responsible for a report once, use often reporting regime, for consultation with the sector about the information to be contained in the public information portal and as part of the team involved in negotiations with the states to reduce red tape.
Looking ahead, the ACNC Taskforce will be holding a series of roundtables with the community, government and key stakeholders focusing on four key areas - financial reporting, governance reporting, portal development and sector education.
Some discussion on communication occurred:
- ACOSS e-newsletter space was offered for ACNC Taskforce messages. This could provide an opportunity for the ACNC Taskforce to get amazing coverage.
- An industry representative asked how Minister Plibersek's work connects to the Assistant Treasurer's stream. Treasury advised that they communicated via Treasury which is represented on all the working groups and the inter-departmental committee.
- He questioned whether that puts Treasury in an awkward position. It was discussed that Minister Plibersek worked closely with Minister Shorten, and a suggestion was made to indicate this on the 'mud map'.
- Another industry representative questioned whether knowledge is flowing as freely as Treasury says; it was his impression that Minister Plibersek is not in the loop. Treasury advised that the diagram did not truly reflect the full level and channels of communication between the ministers.
Action item
|
2
|
Description
|
Clarify how communication and coordination occurs between Minister Plibersek and Minister Shorten and indicate this on the 'mud map'.
|
Responsibility
|
Ms Susan Pascoe
|
Due date
|
22 November 2011
|
Feedback from the members on the approach to communication and consultation was requested.
Comments and questions included:
- Could the IT mechanism provide questions online like the Census online (with a narrative explaining the questions)?
- It was suggested that it would be necessary to segment the communication to the different needs and outlooks present within the NFP sector.
- The 'train the trainer' approach adopted with the GST was a good model to implement. A package of material could be provided that could cascade out from the peak bodies or head organisations down to smaller member organisations and their staff and finally to the volunteers. Such a package would outline the ACNC and its role and activities. The charities could then roll it out themselves.
- The ACNC current view was leaning away from the ACNC providing advocacy. It was added that in Singapore, they have an arm's length advocate and educator.
- It was stated that Australian Institute of Company Directors could be an ally with the offer of cooperation appreciated. It was generally discussed that the sector is willing to disseminate information for the ACNC Taskforce. There is an opportunity to leverage support and cooperation from the peak bodies.
- Members discussed the Financial Action Taskforce's agenda on money laundering and terrorist financing risks in the charitable sector and asked if the ACNC would be the focal point for meeting those obligations.
- The use of smart forms was raised by ACNC, using the date of birth of trustees. A meeting in New Zealand in November will be an opportunity to pick up advice and ideas.
Summaries of pertinent points were then provided, received from the recent non-profit meeting in Scotland impacting on ACNC implementation.
- Non compliance was generally the result of lack of knowledge and negligent behaviour. In Australia, the current raft of reforms attempts to address this.
- A risk-based and differentiated approach to non-profit compliance is adopted in Singapore.
- The Charity Commission of England and Wales lost one third of its budget so has been trying new things to achieve outcomes
- concentrating on providing accurate information on the website which in turn decreases staff costs
- increased online registrations which has improved efficiencies, and
- a contact person is assigned to a charity resulting in great service and outcomes.
- The approach taken to the public benefit test is more controversial in England and Wales than it is in Scotland. In England and Wales, the test is being considered in the courts, whereas in Scotland, it has been kept out of the courts.
- Globalisation has impacted on the way charities operate offshore. It has also affected Canada and the United Kingdom. In Canada if there are funds going to an offshore entity linked to a charity, the charity must control and direct use of the funds.
- In England and Wales, the onus is on trustees to ascertain if the funds are being used correctly, but the additional leeway this provides is making trustees feel exposed rather than empowered.
- On the issue of public trust and confidence, transparency of finances and purposes was important. In the 2010 annual survey about the charity regulators in England and Wales and Scotland a result was that the regulators were seen as trustworthy to monitor charitable activities. All operate assuming that they deal with honest and professional bodies unless demonstrated otherwise.
- Charities were voted the third most trusted entity behind police and doctors.
- Regulators are not resourced to do compliance work; and vigilant volunteers usually alert the regulator.
- It was noted by the ACNC Taskforce that learnings from the My School website included financial data that sometimes needed explanation by way of a narrative; you can't necessarily compare two different organisations.
Jason Aitchison provided an update on the ACNC project.
The ATO will be responsible for the build and development of the ACNC prior to it's commencement on 1 July 2011, this will include:
- establishment of systems, processes and workflow infrastructure
- accommodation, facilities, payroll and human resource services
- recruitment and engagement
- development of websites, online and other informational products
- all administrative and management functions and services.
The ATO is undertaking this task under ministerial direction as the ACNC itself will not exist as a legal entity until the legislation is passed.
The ATO will be working closely with the ACNC Taskforce which will advise on the future arrangements, direction and operation of the ACNC as well as a data to be collected as a component of the establishment of a public information portal. The ACNC Taskforce resides in Treasury and is headed by Susan Pascoe who is also the interim commissioner. The taskforce will consult broadly with the community over coming months across a range of issues.
A number of immediate changes are underway in the ATO as a result of the budget announcement the most important of which is the separation of charitable determination activities from tax administrative functions which is being achieved through a separation of processing activities between ATO sites.
It is anticipated that 60-70% of the ATO's Non-profit Centre will move from the ATO to the ACNC on 1 July 2012.
The ACNC is likely to be located in one major site, unlike the existing NPC which is spread across six sites nationally.
The ACNC Project team is working on a range of issues across the project, but a key area of focus will be the preparation of 'sector sensitivity' training to ensure ACNC officers have a understanding of the issues, pressures and environments in which the non-profit sector operate.
A process will be undertaken to determine which guidance material prepared by the ATO will be 'carried' over to the ACNC for the 2011-12 year. New guidance material will need to be produced for 1 July 2013 reflecting the government's intended codification of the definition of charity.
Once the ACNC is in place, the ATO will continue to administer the NFP and charitable tax concessions. Both the CCC and the Clubs Forum will be retained by the ATO and it is open to the ACNC to continue to attend these forums.
We expect significant internal and external scrutiny of the establishment of the ACNC and associated processes. These will include senior internal governance processes as well as external agency scrutiny and parliamentary review.
Treasury representatives discussed a range of confidential issues relating to proposed not-for-profit reforms.
Members were reminded that they can provide feedback on any of the confidential consultation issues by emailing NFPreform@treasury.gov.au at any time.
The final ruling on the Commissioner's views on the meaning of 'charitable' within the Income Tax Assessment Act 1997, Income Tax Assessment Act 1936 and Fringe Benefits Tax Assessment Act 1986 will issue on the planned issue date of 12 October 2011.
Meeting closed 3.00pm.
Tuesday 22 November 2011.
Last Modified: Wednesday, 8 February 2012
|