The third sector and democracy in Australia: neoliberal governance and the repression of advocacy

ABSTRACT

Pluralism is a key component of liberal democracy, ensuring that diverse groups of citizens have opportunities to contribute to the governance of their society. Third sector organisations (TSOs) are central to pluralist democracy, representing diverse interests through advocacy. Advocacy has many forms but the most visible are protests or public demonstrations aimed at widespread public engagement. However, curtailing advocacy capacity for TSOs has been a political objective of conservative governments for several decades, with the Morrison-led Liberal/National Party government re-engaging in this behaviour. The article illuminates this behaviour through a case study of a recent legislative proposal (2021) to limit TSO advocacy. A qualitative discourse analysis of government and parliamentary materials shows how the state masked proposed changes through an illiberal and populist tactic that narrowed the focus to a narrative of ‘trust’ and uncertainty lacking an evidentiary basis and despite recognition of the potential impact on Australian democracy.

多元化是自由民主体制的关键成分，它保证了不同的公民群体都有机会参与社会的治理。第三部门的组织对于多元民主制至关重要。它是通过促进来代表不同的利益。促进有着很多形式，最为常见的就是旨在广泛参与的示威游行。在过去几十年里，遏制第三部门组织的促进能力一直是保守派政府的政治目标，莫里森领导的自由/国民政府再次干起这种勾当。本文分析了近年的一项意在限制第三部门组织促进能力的提案（2021）。对政府以及议会资料的定性话语分析显示，政府是如何通过非自由主义的民粹策略来掩盖拟议中的变更的，即将焦点缩小到“信任”与不稳定的叙事，没有证据作基础，也无视其对澳大利亚民主体制的潜在影响。

KEYWORDS:

• Curtailing advocacy
• pluralism
• democracy
• illiberalism
• populist tendencies
• third sector organisations
• charities

Introduction

Populist tendencies and illiberal behaviour are characteristic of the movement towards authoritarianism where the key objective is to silence dissent. The use of regulations to limit access to tax concessions or state endorsement is a sharp and increasingly used tactic to control political agendas that seek to centralise and consolidate executive powers in government. It is important to document and analyse such tendencies in the contemporary global polity where democracy, especially pluralist democracy appears to be regularly under threat.

In liberal democracies and developing democracies, pluralism ensures that diverse groups of citizens have opportunities to be heard, with the aim of contributing to the governance of their society (Petric 2012; El-Gawhary 2000; Galston 2018; Einfeld 2001). The third sector is a cornerstone of pluralist democracy, it is where diverse interests are represented, and the advocacy role many third sector organisations (TSOs) play is a key mechanism for this to occur as well as benefiting governments through the provision of quality independent input (Einfeld 2001). Advocacy has many forms but the most visible are the occasions when protests or other public demonstrations ensure widespread public engagement. Marches, rallies, and other forms of collective protest are an expression of the freedom to voice opposition, to inform the public via media attention, and to demonstrate solidarity for a cause or for change to public policies and laws. Australian democracy has a long history of such forms of political participation (Phillips 2006; Lyons 2001). However, under the last three decades of conservative governments, curtailing the advocacy capacity of TSOs has been part of key political objectives of seeking to facilitate an untroubled neoliberal policy agenda through evident illiberal behaviour.

The Liberal/National Party Coalition is the dominant conservative side of Australia’s predominantly two-party system. It is a coalition of the urban-based conservative Liberal party and the conservative rural/regional National Party. This article analyses a specific attempt by the conservative government (henceforth, the Coalition) to limit the advocacy capacity of Australian TSOs under the Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021 (Cth) (‘2021 Regulations’). The 2021 Regulations created significant uncertainty about permitted TSO support for advocacy and would have granted increased powers to the federal charity commissioner to make decisions about the charitable status of TSOs (Australian Government 2021). This rendered advocacy a far riskier activity for many TSOs, as loss of charity status might mean not just loss of income tax exemption, but also the loss of donations and other concessions, with a consequent impact on foundation and other grants.

The analysis of the 2021 Regulations builds on earlier research exploring the silencing of dissent in Australia, which has examined government action aiming to diminish pluralist democracy through the repression of TSO advocacy (Dalton and Lyons 2004; Hamilton and Maddison 2007; Lyons 2001; Melville and Perkins 2003; Lyons and Dalton 2005, 2011). That research highlighted that illiberal approaches to curtailing TSO advocacy have been a tactic of previous Coalition governments, at least back to the time of John Howard.

This article adds to the discussion by showing that illiberal approaches have been used again by the Morrison Coalition government and by focussing on the specific conditions of contemporary threats to liberal, pluralist democracy, placing that analysis in the context of the chief regulatory mechanisms used to discourage advocacy. Presented as a case study about the illiberal nature of curtailing advocacy actions by TSOs, key parliamentary debates, media, government explanatory materials and Senate Committee reports relating to the 2021 Regulations are the corpus of the study. Qualitative discourse analysis of these materials shows how the state masked proposed changes through an illiberal, populist tactic that narrowed the focus to a narrative of ‘trust’, effectively seeking to curtail dissent from the government’s policy agenda. Further, the analysis demonstrates recognition of the potential impact of the 2021 Regulations on Australian democracy, with that recognition playing a part in the 2021 Regulations’ eventual disallowance by the Australian Senate, where the government did not have a majority.

To place the case study in a wider context, this article briefly outlines the significance of pluralism and threats that illiberalism and populism pose for pluralism, as well as looking at types of regulatory control of TSO advocacy.

Pluralist democracy, illiberalism and populist tendencies

The theoretical basis of this article relies on an understanding of the importance of pluralism in liberal democracies and how it is hindered by illiberal action and populist tendencies. In establishing the inclusive nature of democracy, Bauböck (2018) points out that democratic states are, in and of themselves, made up of citizens with diverse interests who function within the boundaries established by the democratic nation. If everyone agreed on collective principles (as under collectivist ideologies such as communism), democracy would be unnecessary as there would be an ‘absence of a diversity of interests, identity, and ideas’ (Bauböck 2018, 7). The boundaries are material, as in sovereign borders and natural resources, and social, as in the need for security provided by the state to act freely without threats to the safety of citizens, including the judicial powers of the state and political decisions of government, where democratic justice operates. Political rule in a democracy is, therefore, a system that provides legitimacy for ‘collectively binding decisions’ (in policies and laws) and ‘coercive government under conditions of persistent diversity’ (Bauböck 2018, 8). For persistent diversity to thrive, there must be an acceptance and facilitation of pluralism by the political party in power. Moreover, through mechanisms of indirect pluralist representation such as advocacy, policies need to be democratically inclusive of human and non-human interests (Bauböck 2018).

Although Laruelle (2022) suggests that illiberalism ‘competes with other, better-studied concepts, such as populism, conservatism, or far right’ (303-04) here we see populism and illiberalism as ideologically bound tendencies (Kubik 2012; Laruelle, 2022) and as important ideas in the discussion of pluralism. Galston in his exploration of the relationship between pluralism and populism, observed that while ‘populist movements … are not necessarily anti-democratic … populism is always anti-pluralist’ (2018, 127). The wide international literature on the rise of illiberal democracies, views ‘illiberalism’ as a ‘majoritarian nationalist response to the failures of the global, neoliberal model, which has shaped the relationships between individuals and the state during the last four decades’ (Grzebalska and Pető 2018, 164). As noted by Main (2021, 14–15), it involves ‘the rejection of liberal democracy in whole or in part’, thus being a rejection of some or all of the democratic liberal principles of ‘limited government’, ‘electoral democracy’, ‘the legitimacy of change’, ‘the rule of law’, as well as liberal principles that underpin pluralism, such as ‘political egalitarianism’, ‘human rights’ and ‘tolerance’, including ‘tolerance broadly defined to include an ethics of controversy based on reasoned discussion’.

Kauth and King (2020, 368) note that a prominent example of illiberalism seen in ‘the politics of most advanced democracies’ is the way in which the treatment of refugees and asylum seekers has taken centre stage, reflecting the anti-pluralist nature of illiberalism:

… Europe, the United States and Australia have witnessed an increase in anti-immigration rhetoric, violence against migrants, and punitive migration policies. In addition to other measures to curb immigration and enforce migration restrictions, many states have reverted to the use of camps to forcibly detain asylum seekers and undocumented immigrants … . A recurring theme in these cases of ideological illiberalism is an underlying hierarchical concept of humanity that casts migrants, and other minorities, as standing outside the boundaries of rights to liberty and equal treatment (2020, 369).

Political actions taken in ‘opposition to procedural democratic norms’ rather than engaging in tolerance and respectful debate have been defined as ‘disruptive illiberalism’ as opposed to ‘ideological illiberalism’ aimed at imposing a dominant, anti-pluralist view (Kauth and King 2020, 367; Laruelle 2022). There have been some references to disruptive illiberalism in the Australian context. Alexander Downer (2020) from the Australian Financial Review referred to threats from illiberalism from outside and inside liberal democracies. He also referred to a growth of ‘illiberal liberalism or hyper-liberalism’, a reactionary attempt ‘that rejects diverse points of view, demands the overthrow of traditions and national cultures, spurns religion and abhors tolerance’. This, he states is a reaction to ‘an understandable liberal demand for equal rights for women and equality for people regardless of their race’. Referring to ‘ideological illiberalism’ other researchers have focused on illiberal intent by governments such as attempts to enact forced sterilisation (Garton 1994) and an analysis of a punitive policy that sought to exclude non-vaccinated children from pre-school (Curchin 2019).

Although conservative governments in Australia have not historically been deemed populist or illiberal, as noted in the introduction, Coalition governments have relied on populist tactics and illiberal approaches seeking to limit diverse views by suppressing advocacy. Due to the integrity of Australia’s compulsory voting system and the position of the prime minister being determined by the party that wins having selected a person from within their ranks and thus a person compliant with the ideology of that party (made public via an election campaign), a singularly populist government has not triumphed as in more authoritarian democracies (Kubik 2012; Laruelle 2022).

There are two characteristics of populism and illiberalism that were evident under the Morrison government, first the questioning of pluralist beliefs, targeting state-based integrity processes, protesters, intellectuals and scientists, and interest groups (Norris and Inglehart 2019; Kauth and King 2020). The second characteristic was the claim that the only legitimate source of political and moral authority in a democracy rested with the ‘silent majority’ (the ‘quiet Australians’), ‘regarded as the only ‘genuine’ form of democratic governance even when at odds with expert judgments – including those of elected representatives and judges, scientists, scholars, journalists and commentators’ (Norris and Inglehart 2019, 5). This second characteristic, with its denial of traditional sources of evidence, suggests Main’s point about the rejection of tolerance and reasoned debate:

… illiberalism is the explicit rejection of those standards [enlightened standards of debate], the celebration of irrationalism, the sedulous dissemination of obvious lies, and regular indulgence in vituperation (2021, 17).

These characteristics are not stated aspects of Coalition ideology and, as Aslanidis (2016) argues, although populism has been described as a ‘thin centred ideology’ by some political theorists (Canovan 2002; Mudde 2004) it is not an ideology but rather a choice in framing political leadership.

The attack on pluralist voices, voices of dissent, is described by Brown as arising from a discourse of ‘trivialized and monsterized social justice where “political correctness”’ is seen as attacks on ‘liberty and morality secured through a blasphemous statism’ (2019, 7). Grzebalska and Pető in analysing the gendered role of illiberalism as constructing the politics of equality ‘as a symbol of everything that is wrong with the current state of politics … a metaphor for the insecurities and injustices created through the process of socio-economic transformation guided by the principles of the neoliberal policy consensus’ (2018, 165). For the Morrison government, the neoliberal policy consensus was implicit in the power of the ‘quiet Australians’, those disinterested in disrupting the government’s agenda. Like populism’s ‘discursive frame’ (Aslanidis 2016, 98), illiberalism is about bolstering a hegemonic narrative that is based on a good or evil or ‘you’re with us or against us’ dichotomy (Main 2021, 17–19).

This perspective frames the methodology of analysing the proposed process of seeking to curtail advocacy from TSOs, as it was clear that the government framed ‘the selection of a specific perspective to interpret experience’ (Aslanidis 2016, 99) of TSOs’ advocacy. In the case study below, that specific perspective is about promoting the idea that charities performing advocacy threaten public trust. Further, the methodology is sensitive to this framing as potentially being based on a lack of respectful debate. Thus, the discourse analysis methodology permits identification of the main reasons provided for the legislation by the government and the main themes raised by others, which point to missing evidence and debate.

Regulation of charity TSOs

Regulation of charity TSO advocacy arises in the broader context of the relationship between the third sector and the state. That relationship is embodied in various institutions, including, for example in an Australian context, the general law of charitable purposes; statutes such as the Charities Act 2013 (Cth) that define the meaning of charity; taxation rules that may confer concessions; and regulatory regimes such as that created under charity commission legislation in countries like Australia and the United Kingdom. In liberal democracies, these institutions generally have the goal of promoting the creation and pursuit of TSOs’ purposes (Harding 2014; Zimmer 2010). Though, as identified in the introduction, in some circumstances the goal may be to discourage or prohibit ways of pursuing TSO purposes.

In either case, this promotion (or restriction) of the sector relies in general terms on three broad approaches (Harding 2014; Zimmer 2010). ‘Facilitative’ approaches such as bodies of rules enabling the creation of charitable trusts or corporations, permitting (potentially with restrictions) the use of TSOs and advocacy activities. ‘Incentivising’ strategies such as tax concessions, or direct government funding that positively encourage (or, in the case of disincentivising strategies like extensive compliance requirements, discourage) the use of the permitted third sector mechanisms. ‘Expressive’ approaches, by which the state publicly endorses and builds public confidence in third sector organisations, for instance, by way of formally registering an organisation as a charity. As noted by Zimmer, many authoritarian regimes severely limit charities’ political advocacy, often by restricting the creation and operation of TSOs (Zimmer 2010).

Liberal democracies also routinely restrict political activities to some extent, but they often do so by removing incentives or expressive support rather than banning political activities. For instance, the USA and Canada both remove charity tax concessions for charities that conduct electioneering (see, eg, sections 170(c)(2), 501(c)(3) of the Internal Revenue Code; sections 149.1(6.1) and (6.2) Income Tax Act RSC 1985 c.1 (Canada)). The USA’s tax rules also restrict activism comprising grassroots lobbying on legislation (26 CFR §56.4911-2(b)(2)). Canada also historically used tax rules to discourage lobbying, but the Income Tax Act RSC 1985 c.1 (Canada) now expressly permits non-partisan ‘public policy dialogue and development activities’ (Sections 149.1(1), (10.1)).

In Australia, bodies of law permit the creation and operation of charitable trusts, incorporated charities in various legal forms, charitable unincorporated associations, and other forms (Dal Pont 2021). The chief restriction is that charities must have purposes that are charitable, being a subset of purposes that are for the public benefit (Dal Pont 2021). From a political advocacy perspective, it is notable that a charity cannot be, or have a purpose of supporting, a political party (see Charities Act ss5(d), 11(b)). Nor can it have a purpose that is unlawful or otherwise contrary to public policy (see Charities Act s11(a)). However, this does not preclude a charity from adopting activities of supporting a political party or candidate, provided those activities are in pursuit of its charitable purpose and do not form a separate purpose. Further, following the Aid/Watch Incorporated v Commissioner of Taxation [2010] HCA 42 High Court decision in 2010, there is no general rule (political purpose rule) that precludes charities from having a purpose (or activities) of advocating for changes in the law or government policy.¹

Thus, advocacy in the forms of electioneering, grassroots lobbying and issues-based advocacy are all permitted in Australia. To the extent that this occurs by way of civil disobedience activities that are unlawful, this would of course raise the risk that the charity itself (or its officers) may have committed a criminal offence (likely a summary, or more minor, offence such as trespass). Therefore, if the unlawful activities are sufficiently material and form a pattern of behaviour that is carried out or condoned by the charity there is additional risk that it may be found to have a non-charitable purpose of engaging in unlawful activities (Murray 2019).

In terms of incentives, charities that elect to register with the national charity regulator, the Australian Charities and Not-for-profits Commission are eligible for income tax exemption and a little over half of charities also qualify for donation concessions (Not-for-profit Sector Tax Concession Working Group 2013). Unlike other jurisdictions such as Canada and the USA, these tax rules do not prohibit or limit advocacy. However, it appears that some charities do feel pressure to limit advocacy because of their reliance on direct government funding (Riboldi, Fennis, and Stears 2022; Phillips 2007). Pressure is limited however as the Australian federal parliament has passed legislation that renders void any attempts to include ‘gag’ clauses in federal government funding agreements (Not-for-Profit Sector Freedom to Advocate Act 2013 (Cth)). Accordingly, it is likely that pressure is applied by threatening not to renew funding or by funding only explicitly listed services (that do not include advocacy) (Riboldi, Fennis, and Stears 2022; Phillips 2007). This pressure is likely to be material given that government funding comprises just over half of all funding sources for charities and that some types of charities (e.g. educational, public benevolent institutions focussed on social welfare) receive a higher percentage from government (ACNC 2022, 20, 30).

Turning to expressive support, Australia has adopted a federal charity commission model under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (ACNC Act). The objects of the ACNC Act are to support ‘public trust and confidence’ in charities; ‘support and sustain’ the sector; and champion a decrease in ‘unnecessary regulatory obligations’ (ACNC Act s 15-5(1)). The second and third objects mark a different approach to the compliance and accountability focus of many other charity commissions. Under the ACNC Act, the charity commission (ACNC) maintains a public register containing information on registered charities (ACNC Act pt 2-2). Registered charities are subject to regular financial and non-financial reporting, giving the ACNC significant additional information gathering and monitoring powers (ACNC Act, pt 4–1 and div 60). As expressive support via registration relies on the definitions of ‘charity’ discussed above, it does not materially impede electioneering, lobbying or issues-based advocacy.

Adding to the general regulatory regime for charities, electoral legislation requirements apply to a range of non-party political actors, including charities (Commonwealth Electoral Act 1918 (Cth) pt XX). This legislation imposes reporting requirements and potentially caps or prohibits the use of foreign donations, which is likely to mildly disincentivise some advocacy activities, despite the legislation’s intent to leave lobbying and issues-based advocacy unaffected (Australian Parliament 2018). Thus, the current regulatory settings impose some minor restrictions, but largely provide material freedom for Australian charities to engage in advocacy.

Case study: attempts to curtail TSO advocacy

While Australia has adopted relatively tolerant regulatory settings for charity advocacy, several trends have been generating increasing overlaps between government and TSO interests. First, greater government reliance on for-profit and not-for-profit actors to deliver programs formerly delivered by government itself and involving greater expectations of accountability and professionalised management. Second, despite withdrawing from service delivery in many areas, expectations of government and governmental oversight have increased in many spaces (Braithwaite 2008, 5–12; Onyx, Cham, and Dalton 2016). Perhaps it is not surprising that these increasing drivers for political advocacy have facilitated conservative governments to attempt to create more controls over the activities of TSOs.

During nine years of Coalition government, there were several attempts to curtail public voices and actions of TSOs, generally focussed on lessening incentive and expressive support. This included, for example, a parliamentary review of environmental organisations that recommended mandating (for those wishing to retain their additional environmental organisation tax concessions) at least 25 per cent expenditure on ‘environmental remediation work’ rather than political advocacy (Australian Parliament 2016). While this did not eventuate, environmental organisations were then subjected to greater reporting on environmental advocacy (Australian Government 2017). Indeed, these developments show that while the general regulatory settings for advocacy may be relatively permissive, some types of charities, such as environmental organisations, may be subject to political interference where additional regulatory hurdles for tax concessions are administered by a government department.² Further, several anti-protest laws were passed at federal and state levels that appear largely directed toward environmental and animal rights protestors and that reduce facilitative support (See, eg, Criminal Code Amendment (Agricultural Protection) Act 2019 (Cth); Roads and Crimes Legislation Amendment Act 2022 (NSW)).

The focus of this case study is the Australian federal government’s 2021 attempt to change the eligibility requirements for charity tax concessions by way of amending the ‘governance standards’ with which registered charities must comply under the ACNC Act regulatory regime. The 2021 Regulations would have required a registered charity to:

1. not engage in conduct or omit to engage in conduct if the conduct or omission may be dealt with as a summary offence under an Australian law relating to entering, remaining on, destroying, damaging, or appropriating real or personal property, or causing personal injury or impairment to an individual; and

2. maintain reasonable internal control procedures to ensure its resources (including its funds, officers and employees, websites, and social media accounts) are not used to actively promote another entity’s acts (or omissions) that may be dealt with as an indictable offence, a summary offence of the type referred to in (i), or a civil penalty below a roughly $13,000 cap.

Failure to comply with the proposed requirements could have resulted in sanctions, ranging from formal warnings and directions through injunctions and enforceable undertakings to suspension or removal of directors/trustees and revocation of charity registration (ACNC Act, part 4-2). The political context of the proposed regulatory change was also important. The power to investigate and decide on deregistering charities would have rested with the ACNC Commissioner, who had been a highly political appointment, described as being appointed as part of the government’s ‘crackdown on charities’ in 2017 (Ziwica 2022).

Ultimately the changes were disallowed by the Australian Senate. However, exploring and understanding the government’s attempted ‘public trust’ framing of the changes and the downplaying of freedom of speech concerns, can help protect pluralism if future attempts are made.

Methodology

The case study was based on a corpus of 43 documents collected during the lead-up to the consideration of the regulations by the Senate. The regulations were being considered as they were delegated legislation in the form of a ‘disallowable instrument’, meaning that they were required to be presented to each house of Parliament and could be disallowed (revoked) by a house of Parliament within a set period. There was less chance of the regulations being disallowed by the House of Representatives as the Coalition government held a majority. The documents were collected from the following sources:

• Treasury consultation and explanatory documents

• Parliamentary debates and standing committee inquiry reports

• Explanatory materials for the 2021 Regulations (including the regulatory impact statement)

• Hansard (record of the Parliament)

• Government media releases and media interviews with parliamentarians.

After scrutinising the documents, themes were established, and a content analysis was conducted.

Results

As represented in Table 1, the findings focused on four thematic fields, with the dominant themes for government statements relating to trust and addressing uncertainty. The two themes are unpacked in more detail below to understand the attempted discursive framing of the political debate by the government in good vs evil terms and to show the lack of an evidential basis for reasoned debate.

Table 1. Summary of discourse theme encodings regarding charities, per statement or document, by voice identity group.

Theme Voice Identity	Trust	Freedom of Expression	Excessive/Arbitrary Powers	Addressing Uncertainty
Government MP or Senator	10	7	2	2
Non-government Senator	0	1	1	0
Government Department	3	0	0	7
Senate and Standing Committees	0	5	7	0
Media	2	1	1	0
Total	15	14	11	9

Freedom of expression and excessive powers concerns were present in the statements of non-government parliamentarians and those of Senate Committees, which were most vocally dominated by opposition Senators. It is the role of such committees to investigate, interrogate relevant officers and government Ministers and analyse the potential impact of proposed legislation. The freedom of expression theme concerned whether the curtailing of TSOs’ advocacy by the 2021 Regulations impermissibly breached the constitutional freedom of political communication, as well as considering its implications for Australian democracy. The excessive powers concern related to the concentration of significant discretionary power over charity registration in the ACNC Commissioner. These themes demonstrated a side-lining of rule of law considerations and, again, a lack – even denial – of evidence relevant to the debate.

From review of public statements and transcripts 6 March 2020–25 November 2021 related to proposed reforms to regulation of Australian charities (43 samples).

Trust

What emerged as the strongest framing (an essential part of political conduct around this issue) for the government’s new regulation was the shoring up of ‘public trust’ in TSOs. This was an attempted strategy to ‘rearticulate the current state of affairs by tapping into existing values’ Aslanidis (2016, 100). In this instance depicting protests and advocacy associated with and conducted by TSOs as reducing public trust, rather than promoting wider pluralist interests and thus being unworthy of tax concessions. This is exemplified in the following excerpts from government Ministers, which seek to contrast a common or dictionary notion of ‘charity’ as the valued provision of services to those in need, with advocacy.

Late night break-ins. Illegal blockades. Damage to property and theft of stock. These are the types of unlawful behaviours promoted and engaged in by activist organisations masquerading as charities … The Australian taxpayer subsidises charities through tax concessions, with the expectation the money goes to charitable works, not supporting unlawful behaviour … The Government recognises that charities play a crucial and significant role in the Australian community, and the vast majority of charities are doing the right thing and providing valuable services. This measure is part of the Government’s plan to uphold public trust in our charities (Assistant Minister Seselja, 2020).

Registered charities that act lawfully and do not use their resources to promote others to engage in unlawful activities are already complying with the proposed changes. The ACNC Commissioner will take a proportionate approach to enforcement, with the objective of giving the public trust and confidence and protecting the assets of registered charities (Minister for Finance Birmingham in Hansard 2021a).

What our government does not support is activist organisations masquerading as charities. Tasmania’s registered charities do vital work in our communities, and these new standards will reinforce trust and confidence in the charities sector. By making these regulations, we can ensure charities that misuse and take advantage of their status to take part in or actively promote illegal activity can be stripped of tax concessions and other benefits (Assistant Minister for Forestry and Fisheries, Press release, June 25, 2021).

The concept of public trust is applied in these statements in contrast to advocacy actions of TSOs that fall outside the government’s expectations of appropriate advocacy or TSO behaviour. However, as explored in the discussion below, these excerpts and the full set of documents analysed do not provide evidence of unlawful advocacy behaviour beyond reference to unspecified and anecdotal media reports. Instead, the narrative suggests that advocacy actions carried out against business or government diminish public trust in the third sector. A strong neoliberal aspect of the government’s narrative around trust is to present the actions of TSOs as a threat to industry, particularly in activists’ attempts to save forests and end animal cruelty. It is suggested that these types of associations reveal a key driver underpinning the government’s need to control the political agenda related to controversial practices reflecting growing public concerns, particularly in relation to climate issues.

Treasury materials were more objectively worded, but retained the focus on trust versus (unlawful) advocacy:

Strengthening trust and confidence in the charities sector is critical not only to its success, but its very existence. While the incidence of misconduct and misappropriation is very limited, it has the potential to undermine the commendable work of the sector. Measures to enhance transparency, clarify permissible advocacy and share information with the public go a long way towards strengthening the trust and confidence the sector needs (Australian Treasury, Government Response to the ACNC Commission Legislation Review 2018, March 6, 2020).

… governance standard three as currently defined in the ACNC Regulations does not enable the ACNC Commissioner to investigate potentially serious breaches of the law by a charity. This is because jurisdictions define criminal offences differently, meaning that serious unlawful conduct may be beyond the scope of governance standard three or only partially captured. This compromises the ACNC’s ability to be an effective regulator, potentially undermining public trust and confidence in the charity sector (Australian Treasury 2021b).

The Treasury statements added to the government narrative by arguing that strengthening the ACNC’s ability to deepen its investigative capacity would render TSOs more trustworthy.

Addressing uncertainty

Government parliamentarians and departmental documents more weakly set out a second purported rationale for the legislation. That is, the changes were necessary to ‘address uncertainty about when engaging in or actively promoting certain kinds of unlawful activity may affect an entity’s entitlement to registration under the Act’ (Australian Treasury 2021a). Senator Birmingham noted (2021 in Hansard 2021a):

The proposed changes implement the Government’s response to recommendation 20 of the Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislation Review 2018. Recommendation 20 states that test case funding should be made available to develop the law in matters of public interest. In response to this recommendation, the Government stated it would explore legislative options to address uncertainty in the law.

The proposed changes clarify uncertainty about the scope of unlawful activities prohibited under governance standard three and resolve the complexity of the law to make it easier and less costly for registered charities to understand their obligations. … 

Almost identically worded reasons were provided by the Australian Treasury (2021a). Further, a ‘frequently asked questions’ document prepared by the Australian Treasury also suggested that because the governance standard applying to registered charities was focussed on indictable (more serious) offences and those punishable by way of a civil penalty above the $13,000 cap, changes were required to deal with uncertainty about charities engaging in other offences or promoting offences more broadly (2021c):

Due to the current scope of unlawful activities prohibited under governance standard three, the existing standard may create uncertainty in the public domain about what other kinds of activities, including the promotion of such activities, could place a charity’s registration at risk.

For example, the governance standard may give the impression that engaging in an activity that may be dealt with as a summary offence (such as vandalism of personal property) may not place an entity’s charity registration at risk … 

Discussion

In this section we draw upon the case study to discuss how the government’s narratives of trust and of rectifying uncertainty involved a rejection of reasoned debate and that the unstated rationale for the regulations was to inhibit the exercise of free speech by charities, largely through the creation of a wide and relatively arbitrary discretion for the ACNC Commissioner.

This is apparent through – first – the good vs evil framing of environmental and animal rights advocacy activities as unlawful and hence as detracting from public trust and confidence. Particularly, Assistant Minister Seselja’s comments set out above: ‘Late night break-ins. Illegal blockades. Damage to property and theft of stock. These are the types of unlawful behaviours promoted and engaged in by activist organisations masquerading as charities … This measure is part of the Government’s plan to uphold public trust in our charities’ (2020). Second, the government’s public trust and confidence rationale for amendment did not appear to fit with the known minimal level of unlawful conduct by charities (as acknowledged in the Australian Treasury statements set out above). In a regular appearance before a Senate committee, the ACNC Commissioner was asked about the extent of unlawful protest activities and acknowledged that the ACNC appeared to be aware of only 2 instances out of more than 59,000 registered charities (Australian Parliament, Senate Economics Legislation Committee 2021).

Indeed, the Regulation Impact Statement that accompanied the regulations acknowledged the low level of instances of unlawful protest activities by charities, citing unspecified ‘media coverage in recent years’ as evidence of unlawful conduct (Australian Treasury 2021b, 3). The Statement also acknowledged there would be a compliance cost for registered charities and contained an estimate of $1.4 million, based on only 9,500 large charities reviewing internal controls (Australian Treasury 2021b). This estimate omitted the other 50,000 registered charities and seems wildly heroic for anyone with experience of policy development in large organisations. Sector modelling indicated that the true cost would range from $78 to $109 million in transitional compliance costs and then $23 to $40 million of annual compliance costs (Michael 2021).

Third, it is telling that the government did not deal with how the proposed changes would affect Australia’s constitutionally implied freedom of political communication (Lange v Australian Broadcasting Corporation (1997) 189 CLR 520). Treasury documents and explanatory materials accompanying the regulations did not address the implied freedom at all. When the Senate Standing Committee for the Scrutiny of Delegated Legislation pressed the responsible Minister for analysis of whether the regulations breached the implied freedom, the answers were dismissive and did not attempt to grapple with the issues. For example:

The implied freedom of political communication is a limitation on Commonwealth legislative power implied from certain provisions of the Constitution in order to ensure that the Australian people may exercise a free and informed choice as electors. It is well established that the implied freedom of political communication is not an absolute freedom and political communication may be subject to valid legislative restrictions in certain circumstances. The Regulations do not interfere with the implied freedom of political communication as the Regulations relate solely to matters that are unlawful under other Australian laws (Sukkar 2021).

This dismissiveness is surprising given a recent decision by Australia’s Highest Court which recognised that while the implied freedom does not protect unlawful activities, environmental protest activities have historically been a means of political communication, such that restraints on lawful instances of these activities would need to be justified under the Lange case (Brown v Tasmania (2017) 261 CLR 328). As discussed below in relation to ‘certainty’, the vagueness of paragraph (ii) of the regulations relating to ‘maintaining reasonable internal control procedures’ had the effect that many lawful activities could potentially have been caught alongside unlawful activities.

These three grounds indicate that the government attempted to construct a value of trust that had little basis. It was a clear promotion of an illiberal and populist tactic employed consistently by all the then government’s public and parliamentary statements.

The second rationale based on certainty appears to be an attempted distraction from the real agenda of stifling TSO advocacy. Charities are already precluded from having an unlawful purpose and are not permitted to be registered if they act in a way that could be dealt with as an indictable (more serious) offence or by way of a civil penalty above the roughly $13,000 threshold (Australian Treasury 2021c). The discourse of government ministers and government departments explicitly stated that the proposal was based on the recommendations of a statutory review of the ACNC Act (McClure et al. 2018: Recommendation 20). However, this was a lie. Recommendation 20 of that review called for test-case litigation funding to clarify the law and made a separate recommendation, recommendation 9, calling for the currently existing governance standard 3 to be repealed – not expanded. The proposed changes were, in any event, likely to result in less certainty as they were so broadly drafted. Indeed, the Parliamentary Committee charged with reviewing delegated legislation, which was chaired by a member of the Coalition government, wrote a letter to the minister responsible for the changes pointing out the way in which the changes would detract from rule of law considerations (Australian Parliament, Senate Economics Legislation Committee 2021a):

Further, the instrument inserts new subsection 45.15(3) into the principal instrument. This provision requires registered entities to maintain reasonable internal control procedures to ensure that its resources are neither used nor continued to be used to actively promote another entity’s acts or omissions that may be dealt with under paragraphs 45.15(2)(a), (aa) or (b) … in the absence of further information in the explanatory statement, it is unclear what objective test will be applied in determining whether a registered entity has complied with the requirements in subsection 45.15(3).

The committee generally considers that instruments that confer discretionary powers on a person should clearly address the purpose and scope of the discretion and … should explain the factors that must be considered in exercising the discretion, and the nature and source of any relevant limitations and safeguards … 

After receiving a response from the responsible minister, the Committee (2021b) reiterated its concerns, noting that the discretion given to the ACNC Commissioner effectively amounted to a ‘subjective judgment’ and that ‘[t]he committee’s concerns are heightened noting that the lack of clarity on what will constitute “reasonable internal control procedures” may inhibit charities’ ability to understand their obligations under the instrument’. Ultimately the Committee recommended that the regulations be disallowed by the Senate.

The unstated agenda of limiting alternative voices was captured by Senator Siewert, from the Australian Greens (Hansard 2021b):

In practical terms, [these regulations mean] charities could be deregistered for lawful activity, like promoting a rally where people are peacefully blocking the entrance to a business … This isn’t the first time the government has attempted to silence charities. In fact, I’ve been dealing with their various attempts through this place ever since I’ve been here. They would rather charities just delivered services without addressing the causes of the need for such services in the first place.

Analysis of the uncertainty rationale also demonstrates that the central strategy of the proposed regulations was to curtail TSO speech by conferring a broad and imprecise discretion over deregistration on the ACNC Commissioner. While the ACNC Commissioner is subject to administrative law oversight in the exercise of discretions, a broad and vague discretion would permit material leeway. For instance, many of the ACNC Commissioner’s enforcement powers, such as revoking charity registration, can already be exercised if the Commissioner reasonably believes that a charity has, or it is more likely than not will, breach governance standards (section 35-10(1)(c) ACNC Act). Further, dissatisfied charities suffer several procedural disadvantages under the ACNC Act regulatory scheme which make it difficult for them to seek review of the Commissioner’s decision (see, McClure et al. 2018). Providing broad discretions and hence relatively arbitrary power to regulatory authorities detracts from the rule of law. In keeping with illiberal actions in other liberal democracies, it is pertinent that the Coalition government chose to introduce this discretion as a limitation on the incentivising (through tax concessions) and expressive (through public registration as a charity) support, rather than by cutting back facilitative support by precluding the formation of charities that engage in advocacy.

Conclusion

Contextualised by a core concern for effective pluralist democracy in Australia, this article has explored how regulatory mechanisms can be used to curtail the advocacy capacity of TSOs via a case study analysis of the 2021 Regulations. The case study demonstrates how the Morrison Coalition government deployed illiberal tactics to construct a narrative about (lack of) trust in TSOs and a need to resolve uncertainty in the regulatory standards. The trust narrative sought to pit a common-sense public view of trustworthiness against what the government saw as an agenda that worked against their own ideological and political interests. The texts that were analysed applied a consistent narrative that the proposed changes would improve public trust in TSOs funded as charities. Reactions to the proposed changes, expressed fears of its potential impact on freedom of expression and the Australian democratic system as well as concerns about the concentration of discretionary power in the ACNC Commissioner.

Using trust and uncertainty narratives as a populist and illiberal tactic was a means for shifting the debate about the 2021 Regulations away from a reasoned analysis of their unnecessary nature, given the deregistering ‘offences’ were already covered under other components of criminal law and regulations, to an illiberal attack on unwanted dissent in relation to the government’s pro-business and anti-woke policies. Such policies related to key concerns in the TSO sector: failure to meet public expectations over climate change, aggressive laws limiting freedom to protest in order to protect agricultural business’s practices seen as animal cruelty, calling for climate action and human rights issues for the unemployed and asylum seekers. As is evident from approaches in other countries, the more extreme illiberal suppression of advocacy capacity of TSOs is most present in authoritarian states. However, liberal democracies like Australia can also witness illiberal behaviour, often carried out by limiting incentivising tax concessions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Ruth Phillips

Ruth Phillips is an Associate Professor in Social Work and Policy Studies at The University of Sydney. Her research focusses on social structures, inequalities and social justice, social work and social policy.

Ian Murray

Ian Murray is an Associate Professor in the Law School at the University of Western Australia. He teaches and researches at the intersection of Not-for-profit Law, Tax, Trusts and Corporate Governance.

Notes

1 For federal legislative purposes, see also Charities Act 2013 (Cth) s12(1)(l).

2 Note that administration of the register of environmental organisations maintained by the Department of Climate Change, Energy, the Environment and Water is slated to be transferred to the Commissioner of Taxation.

Appendix – Discourse Analysis Materials (By Date)

Table

Document Number	Document Type	Document Description (author, year, title, etc.)
1.	Treasury consultation and explanatory documents	Australian Treasury. 6 March 2020. Government Response to the ACNC Commission Legislation Review 2018
2.	Government media release	Seselja, Z, Assistant Minister for Finance, Charities and Electoral Matters. 13 December 2020. Charities Supporting Unlawful Behaviour Will Not be Tolerated.
3.	Government media release	Littleproud, D, Minister for Agriculture. 13 December 2020. Littleproud welcomes stronger farmer protections against extreme animal activists.
4.	Government media release	Duniam, J, Assistant Minister for Forestry and Fisheries. 15 December 2020. Protests endanger hardworking Tasmanians.
5.	Explanatory materials for the 2021 Regulations	Australian Treasury. 2021. Exposure Draft Explanatory Statement: Australian Charities and Not-for-profits Commission Act 2012, Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021.
6.	Treasury consultation and explanatory documents	Australian Treasury. 2021. Unlawful Activity–Changes to the Governance Standards for Charities FAQs.
7.	Media interviews with parliamentarians	Sukkar, M, Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing. 9 March 2021. Transcript of Interview with Mike O’Loughlin, Tasmania Talks.
8.	Government media release	Sukkar, M, Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing, and Pearce, G, MP. 9 March 2021. Protecting workers from illegal activity.
9.	Explanatory materials for the 2021 Regulations	Australian Treasury. 2021. Letter to Executive Director, Office of Best Practice Regulation: Regulation Impact Statement – Unlawful activity – changes to the governance standards for registered charities – Second Pass Final Assessment
10.	Explanatory materials for the 2021 Regulations	Australian Treasury. 2021. Regulation Impact Statement: Unlawful Activity – Changes to Governance Standards for Charities.
11.	Explanatory materials for the 2021 Regulations	Office of Best Practice Regulation. 2021. Advice: Regulation Impact Statement – Second-Pass Final Assessment – Unlawful activity – changes to governance standards for registered charities
12.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Economics Legislation Committee: Estimates, official hansard, 2 June.
13.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 23 June, 3696 (Senator Siewert).
14.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 23 June, 3696 (Senator Duniam).
15.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 23 June, 3724 (Senator Birmingham).
16.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 24 June, 3922-3924 (Senator Siewert).
17.	Government media release	Sukkar, M, Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing. 25 June 2021. Coalition Government strengthens governance standards for charities.
18.	Government media release	Duniam, J, Assistant Minister for Forestry and Fisheries. 25 June 2021. Welcoming stronger governance standards for charities.
19.	Media interviews with parliamentarians	Whitfield, M. 28 June 2021. Challenging charity status: interview with G Pearce, MP and Jonathon Dumian, Assistant Minister for Forestry and Fisheries, The Advocate.
20.	Media interviews with parliamentarians	Whitfield, M. 28 June 2021. Governance changes make it easier to strip charity status: Interview with G Pearce, MP and Jonathon Dumian, Assistant Minister for Forestry and Fisheries, The Advocate.
21.	Explanatory materials for the 2021 Regulations	Office of Best Practice Regulation. 7 July 2021. Unlawful activity – changes to the governance standards for registered charities, Webpage.
22.	Parliamentary debates and standing committee inquiry reports	Fierravanti-Wells, C, Chair of Senate Standing Committee for the Scrutiny of Delegated Legislation. 15 July 2021. Letter to Michael Sukkar, Assistant Treasurer: Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021 [F2021L00863]
23.	Parliamentary debates and standing committee inquiry reports	Sukkar, M, Assistant Treasurer. 28 July 2021. Letter to Senate Standing Committee for the Scrutiny of Delegated Legislation: Response to 15 July 2021 correspondence.
24.	Government media release	Sukkar, M, Assistant Treasurer. 3 August 2021. Stronger standards for charities engaging in unlawful behaviour tabled in Parliament.
25.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 4 August, 4209-4211 (Senator O’Neill).
26.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia, Senate Standing Committee for the Scrutiny of Delegated Legislation. 11 August 2021. Delegated Legislation Monitor 12 of 2021.
27.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 11 August, 4749-4750 (Senator Fierravanti-Wells).
28.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia, Senate Standing Committee for the Scrutiny of Delegated Legislation. 11 August 2021. Delegated Legislation Monitor Tabling Statement.
29.	Parliamentary debates and standing committee inquiry reports	Fierravanti-Wells, C, Chair of Senate Standing Committee for the Scrutiny of Delegated Legislation. 12 August 2021. Letter to Michael Sukkar, Assistant Treasurer: Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021 [F2021L00863]
30.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 24 August, 5115-5117 (Senator Siewert).
31.	Parliamentary debates and standing committee inquiry reports	Sukkar, M, Assistant Treasurer. 26 August 2021. Letter to Senate Standing Committee for the Scrutiny of Delegated Legislation: Response to 12 August 2021 correspondence.
32.	Media interviews with parliamentarians	Coggan, M. 21 September 2021. Global Citizen’s advocacy given green light by tribunal: Interview with Andrew Leigh, Shadow Assistant Minister for Charities. Pro Bono Australia.
33.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia, Senate Standing Committee for the Scrutiny of Delegated Legislation. 29 September 2021. Delegated Legislation Monitor 14 of 2021.
34.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia, Senate Standing Committee for the Scrutiny of Delegated Legislation. 21 October 2021. Delegated Legislation Monitor Tabling Statement.
35.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Economics Legislation Committee Estimates Hearings, official hansard, 27 October 2021, 66-71 (Commissioner Johns).
36.	Media interviews with parliamentarians	Knaus, C. 22 November 2021. One Nation accused of ‘silencing’ Australian charities by siding with government on crackdown: Interview with Andrew Leigh, Shadow Assistant Minister for Charities. The Guardian.
37.	Media interviews with parliamentarians	McCormack, M. 22 November 2021. Hanson puts churches first: Interview with Michael Sukkar, Assistant Treasurer. Courier Mail.
38.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 25 November, 6738-6739 (Senator Patrick).
39.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 25 November, 6739-6741 (Senator Bilyk).
40.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 25 November, 6741-6742 (Senator Rice).
41.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 25 November, 6742 (Senator O’Neill).
42.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 25 November, 6742 (Senator McKenzie).
43.	Parliamentary debates and standing committee inquiry reports	Commonwealth Parliament of Australia. 2021. Senate Parliamentary Debates, official hansard, 25 November, 6749-6750 (Senator Canavan).