36. Red Tape Reduction (Again)

Hi. I am Greg and I want to grumble about red tape reduction (again).

I recently grumbled about the government’s “bonfire” approach to red tape reduction, but fortunately the national charity regulator, the ACNC has been saved at least temporarily from the bonfire and there is a now a Senate Committee review.

I suspect the Committee will simply hear again that most charities like the notion of a purpose-built, independent regulator and don’t wish to be returned to the regulation by the tax collector.

But if the government really wanted to reduce red tape for the charitable sector, it would pick up recent recommendations from the Not-For-Profit Reform Working Group about changes to tax deductible gift giving.

Currently, most charities get tax basic concessions by virtue of being charities. But if you want donations to you to be tax deductible, you need a whole separate process. In many case you need to establish a separate Gift Fund in your constitution with its own bank account and management committee. And if you’re an environmental, arts or harm prevention charity you then need to apply to the relevant Minister to be placed on the appropriate register of organisations.

The Minister may sit on an application for years, or grant it as if it was a piece of political largesse for supportive charities.

However, there are also charities who are exempt from such Ministerial whim – those who because of some historical accident or political deal are listed in legislation as being deductible gift recipients.

It’s stupid and it’s dodgy.

A good piece of red-tape reduction would be to abolish the need for a separate Gift Fund and the various Registers, and repeal the separate parliamentary listings and then simply extend tax deductible gift recipient status to all charities.

This would increase donations to charities, remove the implicit notion that some charities are more worthy than others, and be a direct assistance to thousands of organisations who are doing good work in the community.

It should be simple – if you are a not-for-profit organisation with a charitable purpose, you should get all the same tax charity concessions. Full stop.

If the government is not prepared to embrace this really good piece of red tape reduction for the charitable sector, we might just begin to suspect that their red tape reduction is really about something else – which is where I finished my previous grumble.

I am Greg and I am still grumbling.

This Grumble can be heard online or by podcast.
First Broadcast: 15 April 2014