Social Services Minister Kevin Andrews. Photo: Alex Ellinghausen / Fairfax
The Abbott government's decision to scrap the national charities watchdog will remove crucial oversight and could affect public confidence in the system, the public sector union says.
Social Service Minister Kevin Andrews confirmed this week he would move to abolish the Charities and Not-For-Profits Commission, just as the agency released its first full-year results showing dozens of allegations of fraud and corruption in the nation's charities. Up to 100 public service jobs look set to be lost.
Mr Andrews said the commission, which has been bitterly opposed by Catholic charities, would be replaced by a more voluntary approach to regulation.
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Community and Public Sector Union deputy president Alistair Waters said it was a short-sighted decision.
“Kevin Andrews calls it a war on ‘red tape’. We say they are removing the crucial oversight that ensures the public’s contributions to charities are handled in the correct and proper manner," he said.
"Unfortunately the first casualties in Mr Andrews’ war are the hardworking staff who are doing an outstanding job of monitoring the charities and not-for-profit sectors and the public who may no longer have confidence in a self-regulatory system.”
The union was seeking to get affected staff redeployed.
“Our first priority in the coming weeks is to look after the interests of the commission staff and to ensure their rights and entitlements are respected. We are in talks with the ATO and the commission. However, the fact that the [Australian Tax Office] itself is cutting 900 staff in the next six months presents a significant challenge,” he said.
The commission received more than 200 complaints in its first year of operation with more than a third of them alleging fraud, fund-raising scams or individuals using charitable donations to enrich themselves.
There are currently 55 cases open. Eight of these involve investigations of "serious matters," according to the commission's report.
Police have been called in on a number of cases, but a spokeswoman for the agency would not confirm how many charities had been referred to law enforcement.
ACNC commissioner Susan Pascoe said the bulk of the first year's work had been the establishment of a register of charities to bring Australia into line with other developed nations. It is unclear if this work will be abandoned when the commission is scrapped.
Mr Andrews said he was committed to abolishing the watchdog, saying the move was part of his government's efforts to cut "red tape".
"We'll abolish the Australian Charities and Not-for-Profit Commission which in the view of this government imposes an unnecessary and ponderous compliance burden on the sector," Mr Andrews said.
"We want to transfer the focus from coercive compliance and regulation to collaborative education, training and development."
He said he wanted to have the legislation to abolish the commission in Parliament within the next two months and a new "National Centre of Excellence" for charities established in the 2014-2015 financial year.
"The centre's mandate will encompass both organisations that receive government funding and smaller local community groups that get little or no direct government support," he said.
There would also be a move to restore the role of the Australian Taxation Office, which previously regulated much of the sector.
Ms Pascoe conceded that her 100 workers, mostly based in Melbourne, now faced an uncertain employment future.
"They have the same protections as any Commonwealth public servant, in fact they operate under the enterprise agreement of the Australian Taxation Office," Ms Pascoe said.
Shadow assistant treasurer Andrew Leigh attacked the commission's dumping, accusing Mr Andrews of being ideologically driven to scrap the watchdog.
"Mr Andrews is ideologically bent on only listening to a narrow number of entities that cry about regulation and red tape," the Labor MP said.
"Some regulation is simply the price organisations pay for access to generous tax concessions worth many millions of dollars.
"The Abbott government often expresses extreme concern about how taxpayer money is spent; that accountability is crucial.
"So, why abolish the ACNC?"