The rise and fall (?) of two Charities Commissions : how common law countries can learn from the experiences in New Zealand and Australia

The New Zealand charitable sector argued for many years that it was important to establish a Charities Commission to oversee and regulate the charities sector. The rationale was that charities involved in fraud, tax avoidance and the like could be “weeded out”, and the public could have trust and confidence in those that remained. In 2005, New Zealand established a Charities Commission. In 2012, Australia also established a similar commission, the Australian Charities and Not-for-profits Commission (ACNC). The reform agenda was encapsulated into three main objectives: “to maintain trust and confidence in the NFP sector”, “protect against the misuse of charitable monies”, and to better describe “the front line delivery of services and benefits” to the community. Both commissions were empowered to encourage accountability and transparency of charities, enable their registration, and make registration and deregistration decisions. However, in 2012 the New Zealand Commission was disestablished and replaced by a Charities Board. At the same time the ACNC was also coming under political scrutiny. There was a change in the political party holding government in September 2013. The new government had a political agenda of “reducing red tape”, which it considered would be partially satisfied through abolition of the ACNC. Legislation to this effect was presented to the Federal Parliament in March 2014; however, it was defeated in Parliament's Upper House. This paper argues that State regulation is essential to the credibility and transparency of charities, and to ensuring that the government subsidies that they receive are appropriately accounted for. It also demonstrates that the NFP sector and the public are generally supportive of regulation as long as it is handled appropriately. However, the paper also highlights that establishing a regulator is a highly politicised process, and that other common law countries can learn from this experience.