Under the planned changes, charities risk losing their tax-deductible donation status if their resources are deemed to promote offences such as trespass or property damage.
Senator Concetta Fierravanti-Wells, who chairs a committee scrutinising legislation, has asked the government to explain whether the regulations are unconstitutional.
In a letter to Assistant Treasurer Michael Sukkar, Senator Fierravanti-Wells flagged insufficient detail about the need for and scope of the proposed powers.
“The committee therefore requests your advice as to how the instrument is compliant with the implied freedom of political communication,” the senator wrote.
“It is unclear why the specific offences are not set out on the face of the instrument, or whether there are any limitations on, or guidance in relation to, the exercise of this discretion.”
It can now be revealed doubts have previously been raised within government over the lack of evidence to justify the reforms.
After Treasury prepared a Regulation Impact Statement to underpin the reforms, the government’s Office of Best Practice Regulation highlighted “Treasury’s inability to provide evidence” of charities breaching the law to warrant such intervention.
Under current standards, charities are required to comply with Australian laws, and are regulated by the Australian Charities and Not-for-profits Commission.
Treasury claimed the Commonwealth and ACNC had limited power to intervene because the States determined whether crimes – including “potentially serious offences, such as trespass, vandalism, assault and threatening harm” – were indictable or summary offences.
In a letter dated May 14, a Treasury bureaucrat told the office that “strict secrecy rules” around the ACNC’s work meant the government had to rely on “public consultations with stakeholders” as evidence for its Regulation Impact Statement.
In response, the office, which is part of the Department of the Prime Minister and Cabinet, noted that the consultation was not even sufficiently detailed. It reiterated that the Regulation Impact Statement was substandard and needed “more evidence, by way of stakeholder feedback and relevant data, to support the identified problem that there is uncertainty and complexity for the ACNC, charities and the community more broadly in understanding the scope of unlawful activities due to jurisdictional differences in the law”.
That evidence was not forthcoming. Large, registered charities would have to undertake a one-off, two-hour internal review to comply with the reforms, which would cost the sector $1.4 million overall, which Treasury argued would be offset by improved clarity around the laws.
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