Government’s plan to deregister charities for trifling offences is an overreach

22nd Jul 2021

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 of the group commits a minor offence while engaging in a demonstration.

In a press release from December 2020, Assistant Minister for Finance, Charities and Electoral Matters Zed Seselja stated that some organisations were using their positions as charities to engage in and promote activities that were not legitimate charitable acts.

Changes to stop unlawful activity within charities

In a statement released in March 2021, Assistant Treasurer Michael Sukkar stated that:

‘Potitical 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.

There is nothing charitable about assault, late-night break-ins, threatening behaviour and illegal blockades.

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.’

An attempt to silence activists

The Government has not identified the charities it is targeting, nor who is committing the relevant criminal acts. However critics argue that the proposed changes are clearly aimed at stifling activist protests, such as those carried out by Greenpeace, GetUp! and student groups.

The proposed changes could also impact church charities whose members protest against the treatment of refugees and people seeking asylum.

Broad nature of proposed changes

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 proposed changes would require registered entities to take ‘reasonable steps’ to ensure that its ‘resources’ are not used to promote or support unlawful activities. This could apply to members who commit a minor crime and have used a charity’s resources including its funds, website, social media account, mailing list or offices.

Existing laws for 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.)

The new proposed 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 (s45.15(2)(a) of the Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021).

The offences that could deregister charities include participation in an ‘unlawful gathering’, trespass, vandalism, theft, assault or threatening violence.

Charities could be deregistered if they ‘may’ commit an illegal act

Under the proposed amendments, charities could lose their registration if the Commissioner simply ‘believes’ that an entity has not complied with the new standards. Even worse, charities could lose their registration if ‘it is more likely than not that the registered entity will not comply with such a standard’.

This leaves charities open to losing tax-deductible status if the Commissioner determines that they might be non-compliant in the future, even if they haven’t done anything illegal yet.

Furthermore, charities or not-for-profits could lose their registration if one of their members or volunteers blocks traffic, paints slogans, or uses their website or mailing list to encourage people to attend a demonstration.

Although this may not be the stated intent of the Government, once the legislation is in place it can be enforced on its own terms.

Industry authorities express concerns

In an article published by The Guardian, Associate Professor Ruth Phillips commented that the crackdown appears designed to target protests by environmental groups, as part of a controlling response to dissent or criticism.

The Law Council of Australia’s submission to the Treasury criticised the broad wording of the proposed amendments and the overreaching discretion of the Commissioner.

The submission highlighted that the proposed punishment does not apply to groups that receive government funding, such as political parties, lobby groups and corporations. As such, ‘the proposal may inhibit legitimate public dialogue to the detriment of Australian representative democracy’.

This is an edited version of an article first published at Stacks Law.

Maurie Stack is an experienced solicitor of over 50 years’ standing and the chairman of Stacks Law Group. His key skills lie in his ability to negotiate and problem solve. He advises and mentors lawyers in the group in the areas of insurance and commercial litigation matters, as well as professional indemnity and professional conduct. Over the years Maurie has acted for both corporate and local government clients, involving many high-profile cases.

Maurie currently practises principally in the area of professional indemnity. In 2003 Maurie received an Order of Australia medal for services to the law. He is a Past President (1995) of the Law Society of NSW, a Past President of the Australian Lawyers Alliance (NSW) and a Past Director of Lawcover Pty Limited.

The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).

Learn about how you can get involved and contribute an article

Tags: Regulation