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Productivity Commission recommends reforms to strengthen not-for-profit sector

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The Rudd Government had asked the Productivity Commission to undertake a research study on the contributions of the not-for-profit sector, with a focus on improving the measurement of the sector’s contribution.

A media spokesman from the Productivity Commission said that the key message of the report is the need for wide-ranging reforms to remove unnecessary burdens and costs faced by the not-for-profit sector and to improve its accountability.

“Better regulation, improved funding arrangements and enhanced opportunities for innovation would improve outcomes for the community and the public’s confidence in the sector.”

Presiding Commissioner Robert Fitzgerald said “The proposed reforms would directly address concerns about the multiplicity of regulatory requirements, poor collaboration between the sector and governments and emerging capacity constraints. They would thereby create a much stronger foundation for this expanding sector.”

Associate Commissioner Dennis Trewin said “Australia has 600,000 not-for-profit organisations which contributed $43 billion to Australia’s GDP, growing at an annual rate of 7.7 per cent since 2000. If you count the contribution of 4.6 million volunteers, with an imputed value of $15 billion, this would make it a similar contribution to the retail industry.”

The report makes a number of recommendations aimed at:

  • Building a better knowledge base, through a national measurement framework and a Centre for Community Service Effectiveness, to act as a clearinghouse to promote best practice evaluation
  • Smarter regulation, including a more coherent endorsement process for tax status, to be administered by the proposed Registrar, and a new definition of charities
  • Promoting giving through broader scope of gift deductibility, the promotion of planned giving and nationally harmonised fundraising regulation facilitating innovation and sector development through a variety of initiatives
  • Reforming government purchasing and contracting arrangements.

Government response

The Minister for Community Services Jenny Macklin, the Assistant Treasurer Senator Nick Sherry, and the Parliamentary Secretary for Social Inclusion and the Voluntary Sector Senator Ursula Stephens, said that the report highlighted the importance of the not-for-profit sector in the Australian economy and society.

Minister Macklin said that the sector plays an important role in delivering services, developing social policy and advocating on behalf of marginalised groups.

“This important report will help us identify ways to improve our partnership with the sector to ensure we maximise its contribution to Australia.

“The draft report identifies barriers which prevent non profit organisations from getting on with the job. It is critical that we overcome these barriers, particularly for those organisations that deliver services in the community on behalf of the government.”

Senator Stephens said that the report underlined how important the work of volunteers was to the sector.

“The Government values the critical contribution of volunteers to our vision of an inclusive Australia where everyone feels valued and has the opportunity to fulfil their potential.”

The Rudd Government issued a statement to commend the Productivity Commission for its comprehensive report and thank all the individuals and organisations that made submissions. It said it would carefully consider the detail of the report.

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