Explanatory Memorandum
(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)Chapter 4 Australian Charities and Not-for-profits Register
Outline of chapter
4.1 The Bill provides for the Australian Charities and Not-for-profits Register (the ACN Register) and specifies the information that the ACNC Commissioner is to maintain in the ACN Register about each registered, and formerly registered, entity.
4.2 The ACN Register is to be made available on the internet.
4.3 The ACNC Commissioner may remove or withhold information from the ACN Register in specified circumstances, subject to a public interest test.
Summary of new law
4.4 The ACNC Commissioner is to maintain the ACN Register and include specified information about each registered, and formerly registered, entity.
4.5 The specified information includes name, contact and identifying details for each entity, the type and subtype of registration, governing rules, responsible entities, information from financial and information statements, details of any enforcement action taken under Chapter 4 of the Bill and any resolution or response to such a matter and any other information prescribed in regulations.
4.6 The ACN Register is to be maintained electronically and made available on the internet.
Detailed explanation of new law
ACNC Commissioner to maintain the ACN Register
4.7 Currently there is no single source of standardised information where the public can easily obtain information about not-for-profit (NFP) entities.
4.8 The Bill provides for a single source of easily accessible public information to increase transparency, enable NFP entities to demonstrate appropriate levels of accountability and governance, provide information to the public about registered entities and promote public confidence, informed choices and philanthropy.
4.9 The information to be included on the ACN Register is consistent with information made available on the internet sites of regulators of charities in overseas jurisdictions.
4.10 The ACNC Commissioner is to maintain the ACN Register which will include specified information. [Subsection 40-5(1)]
4.11 The information includes the contact and identifying details of registered and formerly registered entities. This includes the entity's name, contact details (including address for service) and the entity's Australian Business Number (ABN). [Subparagraphs 40-5(1)(a)(i) to (iii) and 40-5(1)(b)(i) and (ii)]
4.12 The ACN Register must also provide information about the registration status of entities. This includes, the type and subtypes under which entities are (or were) registered and the dates of effect of each registration. [Subparagraphs 40-5(1)(a)(iv) to (vi) and 40-5(1)(b)(iii) to (v)]
4.13 The information also includes the entity's governing rules (as explained in Chapter 13 - Miscellaneous) and the name of each responsible entity and the position held by that responsible entity. [Subparagraphs 40-5(1)(a)(vii) and 40-5(1)(b)(vi) and paragraph 40-5(1)(c)]
4.14 The ACN Register contains information statements and financial reports (including any accompanying audit or review report that the registered entity has provided). The information contained in the information statements and financial reports is explained in Chapter 6 - Reporting. [Paragraphs 40-5(1)(d) and (e)]
4.15 The details of any enforcement action taken by the ACNC Commissioner and any resolution of those matters or response that the entity has made to those matters, as well as any other information prescribed in the regulations is included on the ACN Register. [Paragraphs 40-5(1)(f) and (g)]
4.16 The ACNC Commissioner must allow a registered entity 14 days to respond to any enforcement action before the details of the enforcement action are published on the ACN Register, unless the ACNC Commissioner considers that the public interest requires the information to be included on the ACN Register earlier. [Subsection 40-5(2)]
4.17 This provides registered entities with an opportunity to respond to the action, and to make the ACNC Commissioner aware of any factors that he or she may not have otherwise been aware of, before information about the enforcement action is made publicly available.
4.18 This ensures that serious enforcement issues are not kept hidden from innocent third parties such as donors and volunteers while ensuring that appropriate context is provided on the ACN Register, both in terms of allowing any response from the entity to be provided and ensuring that the resolution of these matters is also provided. [Paragraph 40-5(1)(f)]
Example 4.18
The SSSF Foundation is registered with the ACNC. It comes to the Commissioner's attention that two directors of SSSF have been using deductible gift recipient (DGR) funds to purchase vehicles for their own personal use.
The Commissioner removes each director from their position. This misuse of DGR funds is a serious matter and if the Commissioner did not immediately publish that information on the Register, then innocent third parties such as individual donors would be disadvantaged were they to look on the ACN Register and see no problems with SSSF. Donors may be misled and disadvantaged if they were to make donations based on an incomplete ACN Register.
Having regard to the other factors listed above, the Commissioner decides to immediately publish these details on the ACN Register.
4.19 Some of the information provided by entities as part of the information statement may not be required to be published on the ACN Register. The Bill ensures that the information is treated appropriately by providing that information which is classified as "not for publication" is not published on the ACN Register. [Paragraph 40-5(1)(f)]
4.20 The ACNC Commissioner sets forms in accordance with the approved form rules explained in Chapter 13 - Miscellaneous.
4.21 The ACNC Commissioner may also publish any other information that is specified in the regulations and that the ACNC Commissioner is authorised to collect under a provision of the Bill. [Paragraph 40-5(1)(g)]
4.22 The ACN Register is to be maintained by electronic means and made available for public inspection on the internet. Internet availability assists the public to access and search the information easily. [Subsections 40-5(3) and (4)]
4.23 The ACNC Commissioner can make protected Commission information available only in accordance with the secrecy disclosure regime explained in Chapter 11 - Secrecy. [Subsection 40-5(4) (note)]
The ACNC Commissioner may withhold or remove information from the ACN Register
4.24 The ACN Register is intended to support the transparency of the NFP sector and enhance public confidence. Therefore the information specified should generally be provided for all registered entities.
4.25 However, the Bill provides the ACNC Commissioner with the authority to withhold, or remove, information from the ACN Register under specified circumstances. [Section 40-10]
4.26 This authority assists the ACNC Commissioner to provide information that is factually correct and genuinely informative, is not offensive and does not raise public safety concerns.
Sensitive commercial information
4.27 The circumstances in which the Commissioner may withhold or remove information include that the public release of the information may cause detriment to the entity because it is sensitive commercial information. [Paragraph 40-10(2)(a)]
4.28 For example, in considering whether to release information that may be commercially sensitive, the ACNC Commissioner may consider the implications of not releasing this information, including the effect that this would have on the public interest.
4.29 The ACNC Commissioner may also consider the implications of releasing the information on the registered entity.
Example 4.19
XYZ Organisation is accumulating reserves to purchase property. The ACNC Commissioner may consider whether releasing the financial information would disadvantage the entity commercially. The information may be withheld on a temporary basis, with disclosure being postponed until the period of sensitivity has passed.
Inaccurate, confusing or misleading
4.30 To ensure the integrity and reliability of the ACN Register, the ACNC Commissioner may decline to include information if it is considered inaccurate or likely to be confusing or misleading, or may be offensive to a reasonable individual. [Paragraphs 40-10(2)(b) and (c)]
Public safety concerns
4.31 The Bill provides grounds to exclude information from the ACN Register if it may endanger public safety. [Paragraph 40-10(2)(d)]
Example 4.20
The West Women's Shelter does not publish its address to protect its clients. The ACNC Commissioner may withhold the entity's address from the ACN Register.
4.32 The Commissioner would always consider the publication of an address of a women's shelter, or similar organisation, as endangering public safety and it would therefore, not be published on the ACN Register. In such a serious case it would not be possible for the Commissioner to reasonably conclude that a public interest in the publication of that information outweighed the safety concerns.
Regulations
4.33 The Bill provides that regulations may allow for other circumstances in which information may be withheld from the ACN Register. This allows for any circumstances that arise to be addressed to ensure that the ACN Register provides accurate and reliable information while catering for those circumstances in which publication of information would not be appropriate. [Paragraph 40-10(2)(e)]
4.34 The Bill provides for two types of regulation making powers. Regulations may be made which would prescribe information that should not be published on the ACN Register, this type of information is not subject to a public interest test. [Subsection 40-10(1)]
4.35 The Bill also provides for a regulation making power that allows for prescribed information to be withheld or removed from the ACN Register, subject to a public interest test. This addresses the types of information where it is appropriate for the Commissioner to balance any adverse effect that may result from the publication of the information against the public interest. [Subsections 40-10(2) and 40-10(3)]
4.36 The Governor-General may make regulations to address unique circumstances where it may not be appropriate for information or classes of information to be disclosed. [Subsections 40-10(1) and(2)]
4.37 For example, the regulations could prescribe that certain classes of information should not be published on the ACN register where the information could adversely affect the privacy of individual donors or significantly overburden a charity with administrative costs of responding to members of the public. The regulations may do this by allowing certain information to be withheld in part, by removing or withholding annual reports in full from publication or by withholding information about certain responsible entities.
4.38 During consultation a number of consultees raised concerns with publishing certain types of information about private ancillary funds and that this may adversely affect the privacy of individual donors and could potentially reduce philanthropic engagement. The Governor-General will be able to make regulations addressing these concerns in the ways set out in this Chapter.
4.39 This provides an additional safeguard mechanism to ensure that inappropriate information would not be published on the ACN Register.
Public interest test
4.40 The ACNC Commissioner may include the information on the ACN Register or decline to remove the information from the ACN Register if the ACNC Commissioner considers the public interest in the ACN Register including that information, outweighs any potential adverse effect associated with the release of the information in question. [Subsection 40-10(3)]
4.41 The ACNC Commissioner may remove information from the ACN Register if the information has been on the ACN Register for more than 5 years, and the ACNC Commissioner considers that the public interest does not require the information to be retained on the ACN Register. [Subsection 40-10(4)]