This article is more than 2 years old

This article is more than 2 years old

Thousands of Australian charities are in breach of requirements to declare political expenditure because they are not aware of the breadth of spending covered, a parliamentary inquiry has heard.

Witnesses from the Community Council for Australia and Philanthropy Australia revealed widespread non-compliance, in evidence to the joint standing committee on electoral matters, but blamed regulators for the lack of understanding that advocacy on any election issue could be captured.

Representatives of the charity and not-for-profit sector attended committee hearings in Canberra to argue against aspects of the foreign donations bill that they believe impose excessive red tape on the sector.

The committee chair, Linda Reynolds, suggested that as few as 12 of Australia’s 55,000 charities could face higher reporting requirements because that is the number that currently submit returns to the Australian Electoral Commission.

'Bizarre overreach': charities fear regulator wants to control their spending Read more

Reynolds noted the act currently requires declaration of spending over $10,000 in a financial year on political expenditure which includes “the public expression of views on a political party, a candidate in an election or [a parliamentarian]” and “views on an issue in an election by any means”.

The chief executive of the Community Council for Australia, David Crosbie, said there were “thousands of charities under this definition of political expenditure or the clarification of the definition in this bill that will have to do returns”.

Reynolds noted it was already a strict liability offence not to submit a return.

“I agree with you – I think there are thousands of charities that are not complying,” Crosbie replied.

He suggested charities assumed the definition of political expenditure meant spending to advertise particular candidates “so they don’t see it as applying to them”.

Crosbie said that the Community Council for Australia, an independent organisation representing charities, should have informed its members about their responsibility but said regulators including the Australian Charities and Not-for-profits Commission (ACNC) also should have done more.

Crosbie said World Vision, which submits a return, last year only disclosed money from the Bill and Melinda Gates Foundation for advocacy and its return “doesn’t cover all their political expenditure”.

“You imply it’s a failure of the charities, and I think that’s wrong. It’s actually a failure of the [Australian Electoral Commission] and the regulators, not to have informed [us].

“I’m meant to know I’m subject to a law I didn’t know I was subject to?”

A spokesman for World Vision Australia said it “has made all appropriate declarations regarding political expenditure as required under the Electoral Act”.

The advocacy manager of Philanthropy Australia, Kristian Seibert, said he was aware of “many organisations who undertake public expression of views and have not submitted a return”.

Seibert said he would not comment on whether Philanthropy Australia members were in breach because it was not clear they were captured, but there was poor compliance among “charities in general”.

Seibert suggested it was “not their fault” they were unaware of the requirement, and blamed the AEC for not promoting awareness of it.

Charities are already regulated by the ACNC and are allowed to conduct issues-based advocacy provided it fits their charitable purpose.

Under the proposed changes, any group that spent $100,000 or more on political activities in the previous four years would have to register as a “political campaigner”. The category comes with requirements to keep records to ensure donors of more than $250 are “allowable donors” – such as Australian citizens or residents – and are not foreign entities.

For donations from non-citizens or non-residents, charities would have to set up special accounts to keep revenue separate from other sources and ensure it was not spent on political expenditure. Breaches of these rules could trigger fines of more than $50,000.

The charities’ case against the law was boosted by a submission from the ACNC that the new law imposes an “unnecessary regulatory burden on charities”.

GetUp, which has warned that obtaining statutory declarations from donors is not appropriate or feasible, also scored a win when Liberal MP Ben Morton conceded he has concerns with the requirement.