The Government is seeking stakeholder views on exposure draft legislation which will implement two reforms to reduce red tape for, and increase transparency of, the charity sector. The reforms arise from the Government’s agreement to recommendations in the Australian Charities and Not-for-profits Commission Legislation Review 2018 (the Review).
The Regulations will give effect to Recommendation 12 and Recommendation 14 of the Review. Recommendation 12 will increase the revenue thresholds defining small, medium and large registered charities. Recommendation 14 will require all registered charities to disclose related party transactions, with small registered charities to make a simplified disclosure involving a brief description of related party transactions.
For consistency with the Government’s response to Recommendation 15 of the Review, the Regulations also provide an exemption for some charities from the requirement to disclose, as part of their related party transactions, aggregate remuneration paid to responsible persons and senior executives. This exemption will apply to medium registered charities, and large charities with only one remunerated key management person. (Senior executives and responsible persons are referred to as key management personnel in accounting terms.) This requirement balances increased transparency with the privacy of individuals.
The draft legislation will be complemented by administrative actions by the Australian Charities and Not-for-profits Commission to implement Recommendation 14 for small charities.