22 February 2011
The BioMelbourne Network (the Network) welcomes the opportunity to respond to this timely review of the need for a national not for profit regulator.
The BioMelbourne Network
The Network is as an independent Victorian biotechnology membership based industry association. The Network represents some 160 organisations and employs four paid staff (2 part time and 2 full time).
The Network’s key objective is to service its membership and thereby support the growth of the biotechnology sector in Victoria.
The Network was established in 2001 as an incorporated association under the Associations Incorporation Act 1981, administered by Consumer Affairs Victoria.
The Network’s not for profit status is specifically defined in its rules of association and granted by the Australian Taxation Office. The organisation is exempt from paying income tax and liable for a range of other applicable taxes, including FBT and GST.
Framework for National Regulation
The Network notes the diversity in organisations and activities that define the not for profit sector and the difficulty this poses in defining a single set of regulations and taxation concessional treatments.
In principle, the Network supports the concept of a national one stop shop for not for profit regulation. The goal of national regulation should be:
− to maximise transparency, efficiency and effectiveness through appropriate regulation of the not for profit sector
− to minimise the regulatory burden and associated costs for the not for profit sector
− proportional to the size and risk profile of the diverse entities that comprise the not for profit sector, and
− to promote capacity building across the not for profit sector.
A national framework must recognise the diverse profile of the not for profit sector and its needs. Smaller membership based organisations such as the Network and numerous voluntary, community building organisations would not be well served by a uniform approach to national regulation. Such an approach would place a disproportionate compliance cost and burden on these smaller organisations.
National regulation should be based on proportionality, such as organsiational size and risk profile.
Education & Training
A national regulator should also assume some responsibility for developing and delivering education and training to the not for profit sector. This includes issues related to governance, reporting and compliance obligations. This will promote awareness and compliance, improve accountability and contribute to capacity building across the sector.
Taxation Assessment & Compliance
Responsibility for the assessment and registration of tax exempt organisations should also be assumed by a national regulator for the not for profit sector. The (proportional) tax exempt status of not for profits should be maintained in order to continue to support the positive public benefits they deliver to the economy.
The process for assessing, granting and monitoring tax concessions must be streamlined and simplified. The regulator should also play a role in assisting organisations to better understand their taxation obligations and thereby promote compliance.
Harmonisation of State & Territory Regulation
As a Victorian incorporated association, the Network welcomes the recent amendments to the Incorporated Associations Act 2009 (to come into effect on 1 December 2011). The changes reduce the regulatory burden and compliance costs
on smaller non for profit membership based organisations. The Network supports the mirroring of these amendments into any national regulatory framework for the sector.
States and Territories should move to harmonise differences that have resulted in a lack of consistency and comparability in financial reporting requirements and compliance for not for profit organisations.
• Establish a national framework for not for profits that comprises:
− a national regulator, and
− consolidation & harmonisation of disparate State, Territory and Commonwealth regulatory functions, including taxation concessions.
• A national regulatory body should act as a one stop shop, with clearly defined roles and responsibilities, including:
− administration of legislation & regulation
− compliance, reporting & dispute resolution
− assessment of Commonwealth tax concession status, monitoring & compliance
− education and training of the not for profit sector, and
− developing a register of not for profit organisations that will act as single public portal.
• Harmonise State and Territory regulation of not for profits.
Contact details for this submission are as follows:
Ms Michelle Gallaher
Level 2/25 Flinders Lane
MELBOURNE VIC 3000
T: 03 9667 8116
M: 0417 784 856