Is the plan to deregister charities for trifling offences an overreach?
The federal government plans to change the regulations governing charity and not-for-profit organisations. Under the proposed laws, the government will be able to deregister charities if a member or volunteer for the group commits a minor offence while joining a demonstration. (See Unlawful activity - changes to the governance standards for registered charities, The Treasury.) Issuing a press release in December 2020, Charities supporting unlawful behaviour will not be tolerated, the Assistant Minister for Finance, Charities and Electoral Matters, Zed Seselja, stated that some organisations were using their position as charities to engage in and promote activities that were not legitimate charitable acts, and were even criminal. Changes supposedly intended to stop unlawful activity within charities  In a statement released in March 2021, Protecting workers from illegal activity, Assistant Treasurer Michael Sukkar said: "Political activists and organisations condoning and participating in criminal activities, while masquerading as charities, undermine Australians' trust in the sector overall and do not deserve this privilege." "Australians subsidise charities through tax concessions, with the expectation that donated money goes to charitable works, not the promotion of and participation in criminal activities. "There is nothing charitable about assault, late-night break-ins, threatening behaviour and illegal blockades," Mr Sukkar said. Proposed changes an attempt to silence activists  The government has not identified the charities it is targeting, nor who is committing the criminal acts it cites. But critics say the proposed changes are clearly aimed at stifling activist protests, such as those carried out by Greenpeace, GetUp and student groups. It could also impact church charities whose members protest against the treatment of refugees. Greenpeace is a registered charity and donations are tax-deductible, while GetUp is a not-for-profit organisation and donations are not tax-deductible. Broad nature of proposed changes leaves them open to interpretation  The wording of the proposed changes is so broad that it threatens Australia's 59,000 charities with draconian consequences for minor breaches of the law. The changes would require registered entities to take "reasonable steps" to ensure their "resources" are not used to promote or support unlawful activities. This could apply to members who commit a minor crime and who have used a charity's funds, website, social media account, mailing list or offices. Laws already exist to deregister charities engaging in fraudulent activity  The Australian Charities and Not-For-Profits Commission Regulation 2013 currently allows the Australian Charities and Not-for-Profits Commissioner to revoke a group's charity status if it engages in conduct that is an indictable offence, such as fraud. (See also ACNC Governance Standards.) But this proposed new regulation goes much further. Members don't even have to have been convicted of an offence. Damage to property can be "tangible or intangible" and damage to persons includes the "risk or threat" to cause injury. The offences that could deregister charities include an "unlawful gathering", trespass, vandalism, theft, assault or threatening violence. Charities could be deregistered if they "may" commit an illegal act  Under the proposed changes, charities can lose registration if the Commissioner simply "believes" an entity has not complied with the new standards. Even worse, they can lose registration if "it is more likely than not that the registered entity will not comply with such a standard". This leaves charities wide open to losing tax-deductible status if the Commissioner decides they might do something in the future, even though they haven't done anything illegal yet. Furthermore, charities or not-for-profits could lose their registration if one of their members or volunteers sits in a road blocking traffic, paints slogans, or uses their website or mailing list to encourage people to attend a demonstration. Even though this may not be the stated intent of the government, once the legislation is in place it can be enforced on its own terms. There are plenty of overzealous people in the world. If it is not intended that someone in power could use this new law to break up an annoying charity which campaigns against government policy, then they shouldn't be given the power to do it. Industry authorities express concerns over proposed changes  Professor Ruth Phillips of Sydney University told The Guardian the crackdown appears designed to target protests by environmental groups as part of a controlling response to dissent or criticism. (See Australian government crackdown on charities will stifle political advocacy, experts say, The Guardian, May 2021.) The Law Council of Australia made a submission to The Treasury, saying the wording was far too broad and was an overreach. The submission pointed out the proposed punishment does not apply to groups which receive government funding, such as political parties, lobby groups and corporations. (See Exposure Draft Consultation on Unlawful Activity - Changes to the Governance Standards for Registered Charities, Law Council of Australia, March 2021.) "The proposal may inhibit legitimate public dialogue to the detriment of representative democracy," the Law Council said. Maurie Stack  Regulatory compliance  Stacks Law Firm  The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.