Reform of the Not-for-profit (NFP) sector continues at a steady pace. The Government has announced its intention to abolish the Australian Charities and Not-for-profit Commission (ACNC) and that it will not proceed with the "Better targeting of not-for-profit tax concessions" (at this stage).

Not-for-profits

As previously announced by the Assistant Treasurer, Arthur Sinodinos, the Government will no longer proceed with:

  • The targeting (through taxing) of activities that are not part of the altruistic purposes of a charity, or better known as the Unrelated Business Income Test (UBIT), but will explore simpler alternatives to address to risks to revenue
  • Providing a definition of 'not-for-profit' in tax law
  • Transferring responsibility for administering of the cultural gifts program from the Ministry of the Arts to the Australian Taxation Office (ATO)
  • The proposed triennial review of the guidelines for, and organisations on, Deductible Gift Recipient (DGR) registers.

The "In Australia" special conditions, which address the requirement for income tax exempt entities and DGRs to operate in Australia and their use of funds outside of Australia, will proceed under the current Government. However the inclusion of a definition of 'not-for-profit' in the tax laws will not proceed.

Education

The Government through the MYEFO has provided additional funding for the Students First package which includes:

  • $1.2 billion over the forward estimates for an increase in funding for Queensland, Western Australian and Northern Territory Governments to implement a national funding agreement for schools. The Government will fund this measure by ceasing the Trade Training Centres, which will achieve savings of $986.5 million over five years and further savings of $528.2 million over four years by not proceeding with the Building Stronger Communities Fund measure.
  • The Government will provide $70 million over the four years to encourage 1,500 government schools to become Independent Public schools by 2017. An independent public schools fund will be established and funding will be provided through the states and territories.
  • The Government has also committed to other Students First Initiatives, including funding to improve students' reading and writing outcomes and improving Australia's standard curriculum.

The Government will provide $15 million over the next four years to establish the Australian-Indonesia Centre. This centre is aimed at strengthening and deepening Australia-Indonesia business, cultural, educational, research and community links. This centre will be based at Monash University.

The Government also aims to achieve a further savings of $2.5 million by reducing the higher education reward funding.

Also, legislation to repeal the Schoolkids Bonus has been introduced to Parliament on 13 November 2013, as part of the legislative package to repeal the MRRT.

Child Care

Since the Pre-Election Financial Outlook (PEFO), there has been an increase of $303 million in 2013-14 ($2.6 billion over four years) of the Child Care Benefit and Child Care Rebate payments. This is due to a higher than expected utilisation of child care.

Cap on Self-Education Expenses

The previously announced cap on self-education expenses will not be continued under the Coalition Government. The proposed reform would have limited work related expenses to $2,000.

Overseas Aid

There was no mention of the Government's commitment to overseas aid in the MYEFO. In the last Federal Budget the Labor Government intended to defer Austalia's growth target for providing overseas aid, which would have provided $326.5 million worth of savings in the 2014-15 year.

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