Transparency overhaul on ALP’s charity agenda

A Shorten Labor government would implement a new transparency regime for the charity sector.

‘People are turning inward and not giving because they don’t trust,’ says Tim Costello, chairman of the Community Council for Australia.

A Shorten Labor government would implement a new transparency regime requiring all charities to publicly report employee salaries above $100,000 and all charities with revenue of more than $1 million to publicly list their highest salary.

The overhaul will see the ­Australian Charities and Not-for-Profits Commission adopt a similar approach to that of Britain’s Charities Commission in publicly reporting executive ­remuneration.

Employees paid salaries of more than $100,000 would be listed in $25,000 bands.

The move was yesterday welcomed by the Reverend Tim Costello, who is chairman of charity peak body the Community Council for Australia.

“The only asset charities have is public trust, and trust requires transparency,” Mr Costello said.

“People are turning inward and not giving because they don’t trust, which hurts those charities are helping.”

Mr Costello said he regarded the British approach as the “gold standard”.

“The truth is if charities have large assets or hidden amounts of money they’re paying executives, they’re going to lose their donor base,” he said.  

“In the long run, what the UK has done is protect charities by preserving that donor base.”

Labor charities and not-for-profits spokesman Andrew Leigh said public attitudes to charities could be damaged by the perception of disproportionate expense on senior salaries and adminis­tration costs.

“At present, only a few charities voluntarily report executive remuneration. As a result, they receive unfair public opprobrium, which in turn acts as a disincentive to transparency,” Dr Leigh said.

“Charities should be free to set the remuneration they feel is necessary to get the right people to advance their cause, but given the significant stake the commonwealth has in a charity, senior salaries should be transparent to the Australian public.

“This creates an imperative for organisations to set their executive remuneration at a level they would be confident in publicly justifying.”

Dr Leigh said the proposal would come at no cost to the ­federal budget, and represent only a small compliance burden for larger charities.

“As in the UK, charities would be under no legal obligation to ­reveal the identities of their highest earners (though many would do so),” he said.

“Transparency advocates in the UK encourage charities to ­accept that publishing salary data provides an opportunity for charities to talk to the public about the impact they have.”