Vague ‘governance standards’ give massive power to bureaucrats

In recent weeks, FreedomWatch has commented extensively on the reversal of the presumption of innocence contained in the Gillard government’s Human Rights and Anti-Discrimination Bill. But as IPA Executive Director John Roskam wrote in his AFR column today, Australian governments have also been degrading this vital tenet of a free society across a range of policy areas by replacing the rule of law with the rule of bureaucrat:

A new and worrying trend is the way politicians are eroding the presumption of innocence by requiring individuals to prove they have fulfilled obligations of ‘due diligence’. An ever-growing number of laws require individuals to prove they are innocent of an offence by demonstrating they complied with whatever obligations would be appropriate for someone exercising ‘due diligence’… The requirements of ‘due diligence’ can be incredibly vague and almost impossible to comply with.

The establishment of the Australian Charities and Not-for-Profits Commission (ACNC) in the Australian Charities and Not-for-Profits Commission Act 2012 – which I wrote about in October last year, and was brought to our attention by an IPA supporter – is exactly the kind of thing John was talking about.

As of July 1, many charities in Australia will be regulated by the ACNC, replacing the Corporations Act. The new system will replace clearly defined regulation administered by ASIC and enforced by the courts, with vague ‘governance’ standards enforced by ACNC bureaucrats.

The ACNC draft governance standards are littered with items requiring charities to act ‘appropriately’, ‘reasonably’ or ‘responsibly’ and gives ACNC bureaucrats such extraordinarily wide discretionary powers that they can punish charities if they think an offence is ‘likely’ to occur.

For example, under ‘responsible management of financial affairs’:

Section 45.20 Standard 4 –

2) A registered entity must take reasonable steps to manage its financial affairs in a responsible manner.

Furthermore, Division 80.1 of the Act gives the ACNC Commissioner to take action if the Commissioner reasonably believes that the entity has not complied with a governance standard, or that it is more likely than not that the entity will not comply with a governance standard.

More alarming than the practical implications of the ACNC (that charities will have less time and money to serve those in need) are the dangerous ramifications it has for our liberal democracy.

As John writes:

These sorts of assumptions produce a legal and political regime that favours control over freedom. In such a regime the only freedoms citizens are allowed are those granted to them by government. This sort of regime bears no resemblance to a liberal democracy.


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