Address To Pricewaterhousecoopers Transparency Awards

17 April 2008 | Senator Ursula Stephens

Thank you Rick for your kind introduction and your invitation to participate in the inaugural PricewaterhouseCoopers Transparency Awards.

When you invited us to be jurors for these awards you told us that it built on a similar program that PWC runs in the Netherlands which had brought new perspectives and dialogue to the Dutch not-for-profit sector. I was really excited about participating because, as we can see here tonight, these awards have had a similar effect, adding to a growing national dialogue on transparency and accountability in the not-for-profit sector.

Support and skill sharing from industry bodies is very important and the Institute of Chartered Accountants also had a key role in these awards. I acknowledge the valuable support they provided.

Can I also extend my thanks to Amanda Bartley and the team at PricewaterhouseCoopers for the organisation and analysis that has gone into these transparency awards, it has been a thought provoking process for all involved – judges, jurors and the nominees themselves.

The awards forced all of us to adopt fresh perspectives on the work of the not-for-profit sector. In particular they compelled not-for-profit organisations to make new observations about their work, reflecting not just the contribution they make to the community but also how that contribution is perceived by the broader community.

This perception of contribution is as important to donors as it is to government. Organisations need to take the time to stand back from themselves and make these assessments. We all know that this is not the strength of the not-for-profit sector where scarce resources must go into the pointy end of service delivery.

Serving on the Jury

Serving on the jury was an interesting and refreshing experience and I would like to acknowledge that the judges and jury members were very generous with their time.

Serving on the jury was an interesting and refreshing experience and I would like to acknowledge that the judges and jury members were very generous with their time.

Such a diverse range of jurors brought to the panel a range of perspectives, all of which were equally important and valid.

It reminded me that grant-makers and grant-seekers may share the same aspirations but can have very different perceptions on how these aspirations can be met.

As we got down to the last tough decisions I was guided by the wisdom of my fellow jurors. We agreed to disagree on some points but reached a verdict with a great sense of good will and admiration for the work of organisations in the sector. Rupert is going to reflect on the finer points of deliberation in the Juror’s report later.

What is the role for government?

The Australian Government wants a strong and vibrant community sector because this sector is vital to the delivery of our ambitious Social Inclusion agenda.

Appropriate and effective accountability mechanisms are needed which do not prevent organisations from delivering vital services.

What the jury deliberations demonstrated very clearly is that when government funds organisations in the sector to deliver services on its behalf, there is a need both for transparency in its outcomes and recognised benefits in sharing the learning (whether success or failure) of policy initiatives. This is in the interests of greater openness and transparency in government. I want to give more thought to how this can be achieved and I look forward to conversations about this in the future.

We understand that it is not-for-profit organisations that are often best placed to address the needs, and advocate on behalf of, the most vulnerable in our society. They are often the most nimble early adapters of new ideas and solutions to changing community needs.

The community sector is spread across a wide range of services and is well positioned to provide advice on how every Australian, no matter what their circumstances, is able to participate in the cultural, social and economic life of Australia.

A goal that is pivotal to the government's social inclusion agenda, which itself is a central principle of the government's vision for this nation.

Getting the regulation right for the not-for-profit sector therefore is very important; it is something that I have been giving considerable attention.

Choice Magazine recently highlighted the challenge before us. In a survey of both donors and charities, Choice found that there was a both a greater demand from donors for more information about how their funds were used and distributed. Charities expressed a demand for simpler and uniform regulation.

This reveals two priorities for reform: strengthening public confidence in the not-for-profit sector and celebrating its achievements through strengthening accountability mechanisms and reducing the burden imposed on the sector of unnecessary red tape.

I believe that these two outcomes do not have to be mutually exclusive.

The Australian Government understands the often daunting labyrinth of forms, contracts, conditions and reporting that face not-for-profits in their interactions with government.

These overly complex processes are often the result of having to comply with regulatory systems in a number of different jurisdictions.

We have already begun working with the states and territories to harmonise regulatory arrangements. We will continue to work through COAG to develop a comprehensive program to cut red tape for the not-for-profit sector.

Victoria has already taken action with their release of the Strengthening Community Organisations paper at the ACOSS conference last week which sets out an ambitious agenda for reducing the administrative burden faced by organisations.

These reforms need not come at the expense of accountability. There is growing public demand for transparency and openness in how governments spend taxpayers’ money. By working with the states to harmonise and streamline regulation we can improve accountability whilst increasing public trust and confidence in the sector.

If we ask this of business we should also ask it of the sector that employs 700 000 Australians, 5.5 million volunteers, and has a turnover of some $50 billion a year.

Choice magazine has recently added its voice to those of the Fundraising Institute of Australia and the National Roundtable of Not-for-Profit organisations supporting the establishment of a national charity regulator. Overseas experiences, like the Charities Commission in the UK or New Zealand, show it's possible to improve transparency and reduce compliance and administrations costs for charities; a win-win outcome.

The Government's Commitments

The Australian Government realises that reform of the sector can only be achieved if we are prepared to acknowledge the contribution the sector makes both to our economy and our society.

We have recently announced our intention to enter into a national compact with the sector, which will underpin the new relationship we want to build with the not-for-profits in this country.

This compact will be developed in close consultation to identify what should be the key features of the compact’s content.

I expect the national compact will define a set of common set of goals and a timetable for addressing issues and concerns so it can be a driver for social change.

We also intend to ask the Productivity Commission to construct a new tool to measure the direct and indirect contributions of the third sector to our economy. At the moment the best data we have is a numeric measure of the organisations, volunteers and turnover which is insufficient to effectively measure the sector's complex contribution to our society.

As Kevin Rudd says so often his government will be one that is focused on evidence-based outcomes - not output or throughput or even put out.

Conclusion

We do not underestimate the importance of a strong and vibrant not-for-profit sector in this country. It is central to the government's agenda of building a socially inclusive, fairer and more caring society.

We recognise that the sector is facing many challenges, two of which are the burden of over regulation and an increasing public demand for accountability and transparency. The government intends to be by your side to assist you in meeting these challenges.

The best solutions, like these awards tonight, so often come organically from within the sector itself.

While I acknowledge that my remarks have mainly focused on the community services sector they apply just as much to those who are actively engaged in organisations promoting human rights, environmental, cultural, recreational, sports and arts activities. All these organisations are critical to our civic engagement and strengthening our civil society.

Congratulations to all the participants, you are at the forefront of change in your sector. These awards are a step along the path for improving our relationship with the not-for-profit sector. We must harness initiatives like yours to ensure a strong and vibrant not-for-profit sector for Australia into the future.

Thank you.