Proposed reforms affecting community associations and clubs
6 February 2020
On Monday, QLS appeared at a parliamentary committee hearing to discuss proposed reforms affecting community associations and clubs. President Luke Murphy and Emeritus Professor Myles McGregor-Lowndes (QLS Not for Profit Law Committee member) highlighted the significant impact these reforms will have on the day-to-day operations of community groups, many of which are run by volunteers.
Wider consultation is needed to ensure that there is a comprehensive review of the Associations Incorporation legislation which responds to the community sector’s needs. QLS also called for a complete review of fundraising regulation, so that our regulations deal with the challenges of fundraising in a digital society as demonstrated by the recent bushfire appeals.
The original purpose of the Associations Incorporation Act 1981 was to provide an inexpensive incorporation process for not for profit associations with a light touch regulatory approach. Incorporation provides the benefits of a corporate identity, which makes it simpler to enter into contracts and obtain insurance. By incorporating, management committees and members also obtain the benefit of limited liability.
The current draft laws are intended to modernise the Act and to improve the internal governance of associations.
However, the amendments proposed represent a significant change from the “low cost” and “light touch” regulatory framework of the original Act. The amendments shift the position of an incorporated association firmly into the corporate regime and in fact include some more onerous regulatory features. The changes will require the disclosure of remuneration of executives and also set out the duties of management committee members, without all of the defences available to company directors. This new approach may have unintended consequences on the future use of the Act by new community endeavours and current incorporated associations may choose to migrate to other legal forms.
QLS also made recommendations regarding the Model Rules, which an incorporated association can adopt as the day-to-day processes for running their organisation. QLS was concerned that a revised draft of the Model Rules has not been released as part of this amending bill, given that the Model Rules are critical to the practical effect of these reforms on affected associations. QLS also recommended taking the approach of other states where the current version of the Model Rules applies to all associations, not the model rules in place at the time of the association’s incorporation.
QLS also called for the complete review of the Collections Act 1966 and the regulatory policies of fundraising generally. The current regulatory framework does not take account of significant changes in modern society. For example, it does not address the modern mischiefs of public fundraising such as undesirable conduct involving the internet, email and crowd-funding, or the advent of social enterprise and social media.
QLS highlighted that the proposed mediation and grievance process needs to be clarified so that it can be applied as intended. QLS also raised concerns about the extensive powers of entry proposed, under which authorised officers may enter and inspect an association’s premises without a warrant.
QLS urged the parliamentary committee to recommend that the Bill not be progressed until wider consultation occurs to ensure that these changes represent a thorough and considered review of this Act and associated legislation affecting community organisations in Queensland.
You can read our full submission here.