Chapter 8: Administrative burden
Introduction
8.1 In its guide to preparing a submission, the Board asked whether the draft Bill would impose any additional administrative burden on charitable organisations. The Board received a wide range of views on this issue. While the issue was discussed in the group meetings, only a minority of submissions raised the issue.
Overview of submissions
8.2 Some respondents stated that it would be difficult to assess the administrative burden until the draft Bill had become law and they had practical experience with its administration. In addition, respondents noted that they did not know what consequential legislative amendments would follow enactment of the Bill and therefore could make no assessment of the administrative burden. (Multicultural Disability Advocacy Association of NSW; the Anglican Church Diocese of Sydney; Aged and Community Services Australia; Anglicare Australia)
8.3 Other respondents believed that there would be no change, or very little change, in the administrative burden on charitable bodies. (Berry Street Victoria; the Victorian Healthcare Association; the Cancer Council South Australia; the Smith Family; Chinese Australian Services Society Co-operative Ltd; Uniting Healthcare)
Issues relating to administrative burden
8.4 Those respondents who raised concerns about the administrative burden argued that the draft Bill would inevitably increase their administration and compliance costs for the reasons listed below. (Asylum Seekers Centre Inc; VCOSS; Alcohol and Other Drugs Council of Australia; Australian Council for Overseas Aid; Fundraising Institute of Australia; National Aboriginal and Torres Strait Islander Ecumenical Commission; Australian Federation of Homelessness Organisations)
The new Bill needs to be interpreted over time
8.5 If the Bill is enacted, charitable bodies may need to spend more time monitoring the interpretation of the legislation and any new tax rulings and additional tax information.
The serious offence provision could increase costs
8.6 The serious offence provision could increase legal and administrative costs if it results in an increase in ATO inquiries. As discussed in chapter 5, the scope of this section could create an additional administrative burden. (VCOSS; ACFOA)
Identifying advocacy activities would cost time and money
8.7 Many respondents assumed that they would need to spend more time recording advocacy activities as a result of the disqualifying purpose provision in paragraph 8(2)(c). Few respondents attempted to cost additional record-keeping.
Board assessment
8.8 The Board notes that some respondents were concerned that administrative costs would increase with the enactment of the draft Bill. However, the Board was unable to identify any measurable circumstance under which the proposed legislation could be expected to directly increase the administrative burden on charities. In particular, the Board notes that the ATO1 has provided advice that it will not require any additional record-keeping if the draft Bill is enacted.
8.9 Some of the sector’s concerns would be addressed if the serious offence provision is removed from the draft Bill as the Board has recommended.
8.10 The Board believes that there would be less confusion and less unnecessary record-keeping if the term ‘small scale’, which is used to describe an ‘ancillary or incidental’ activity, is removed from the EM. (See chapters 3 and 4 and recommendation 4.37.)
8.11 There is also some uncertainty among respondents about what activities would be regarded as ‘attempting to change the law or government policy’ and how they should be accounted for. As previously discussed, the Board believes that further information should be provided to the sector to eliminate uncertainty.
Recommendations
8.12 The Board recommends that:
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the practical application of the draft Bill should be the subject of a post-implementation review within two to three years of its implementation; and
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for the purposes of the post-implementation review, a base-line study of the current administrative burden should be started before the draft Bill is implemented.
8.13 The Board recommends that an education program and compliance tool-kit be provided by government to the charitable sector to accompany the enactment of the draft Bill.
1 ATO Minute No: 480/2003, paragraph 12, p 3. Refer Appendix 7.
