Charities Bill Before Parliament

Published on 07 June 2013

The Federal Government has released the final Charities Bill, which will be debated in Parliament this week. This follows the draft version of the Bill released in April 2013. The current version of the Bill and its Explanatory Memorandum can be accessed here:

The first draft of the Bill created more certainty about what constitutes a charitable purpose and specifically codified some elements of common law. Its provisions include:

  • Expansion of the current list of four charitable heads to twelve, explicitly codifying some important purposes such as advancing the natural environment and promoting or protecting human rights as charitable purposes in their own right.
  • Expansion of the definition of disaster relief – previously limited to the relief of individual distress after a disaster – to include rebuilding, repairing or securing not-for-profit community assets after a disaster.
  • Generating public debate with a view to influencing legislation or government policy in favour of a charitable purpose is explicitly charitable even if it is contrary to government policy, folding in the Aid/Watch decision and protecting the ability of charities to critique government policy without losing their charitable status.
  • Provision for charitable funds to retain their charitable status for Commonwealth purposes if they provide finding to Government entities which would be charities if not for their connection to government.

Many of the concerns raised in response to the initial Bill, have been addressed in this version of the Bill, including:

  • Exempting necessitous circumstances funds from part of the public benefit requirement
  • Grandfathering of existing funds which may not meet the public benefit test in the new definition
  • Changes to the definition of public benefit to be more consistent with common law principles
  • Changes around the definition of entities which hold or manage benefits that relate to native title
  • Clarification that charities may critique, compare and assess the policies of political parties or candidates
  • Clarification of the definition of government entity

Other changes include a preamble acknowledging the unique nature, diversity and important role of charities in the Australian community and stating the reasoning behind introducing a legislative definition of charity while still utilising familiar common law concepts.

The legislation is proposed to come into effect on 1 January 2014 but it will need to be passed in the final sitting session of Parliament before the election.