Cutting red tape

The New South Wales (NSW) Government has completed a review of the Associations Incorporation Regulation 2016 (NSW) (the Regulation), made under the Associations Incorporation Act 2009 (NSW) (the Act). The Regulation applies to all incorporated associations in New South Wales and contains obligations with which directors will need to be familiar.

The Regulation has been approved and will take effect for all incorporated associations on 1 September 2016, the same day as the Act comes into effect.

The review of the Regulation is one in a series of similar consultations undertaken by state and territory governments around Australia as part of a program to modernise the administration of incorporated associations. To this end, the new Regulation provides some improvements, particularly around the use in holding committee and general meetings, communicating with members and voting.

The Australian Institute of Company Director’s (AICD) submission on the Regulation provided feedback on the draft Regulation and recommended a number of changes including:

  • Using a ‘technology neutral’ approach (which neither prescribes nor requires the use of particular technologies) to ensure greater flexibility and to ensure that associations can make the most of new technologies as they become available;

  • Improving the accessibility and usability of the Regulation through refining unclear clauses, providing supportive guidance materials and using plain language in drafting to support users to understand and meet their obligations; and

  • Enhancing the focus on governance such as through recognition of the duties of committee members in the model rules, and enshrining the rights and obligations of members.

Although some refinements have been made following consultation, a number of opportunities to make significant improvements to the administration of incorporated associations have been missed. By comparison, the outcome of an earlier review by the Victorian Government’s Associations Incorporation Reform Act 2012 (Vic) delivered a number of excellent reforms which could have easily been mirrored in the NSW legislation.

The AICD believes that a greater focus on long-term reform is needed for the not-for-profit sector, an aim of which should be to deliver streamlined, nationally consistent legislation for incorporated associations across Australia.