In March 2009 the Rudd Government asked the Productivity Commission to undertake a research study on the contributions of the not-for-profit sector, with a focus on improving the measurement of the sector’s contribution to the Australian economy.

A representative from the Productivity Commission spoke with the media, saying that the key messages of the report are the need for wide-ranging reforms to remove unnecessary burdens and costs faced by the not-for-profit sector, and to improve the sector accountability.

The Commission recommended that “Better regulation, improved funding arrangements and enhanced opportunities for innovation would improve outcomes for the community and the public’s confidence in the sector.”

Presiding Commissioner Robert Fitzgerald said “The proposed reforms would directly address concerns about the multiplicity of regulatory requirements, poor collaboration between the sector and governments and emerging capacity constraints. They would thereby create a much stronger foundation for this expanding sector.”

Associate Commissioner Dennis Trewin said “Australia has 600,000 not-for-profit organisations which contributed $43 billion to Australia’s GDP, growing at an annual rate of 7.7 per cent since 2000.

“If you count the contribution of 4.6 million volunteers, with an imputed value of $15 billion, this would make it a similar contribution to the retail industry.”

The report makes a number of recommendations aimed at:

• Building a better knowledge base through a national measurement framework and a Centre for Community Service Effectiveness, which would act as a clearing house to promote best practice evaluation.
• Improving regulation, including a more coherent endorsement process for tax status which would be administered by the proposed Registrar, and a new definition of charities.
• Promoting giving through a broader scope of gift deductibility, the promotion of planned giving, and nationally harmonised fundraising regulation facilitating innovation and sector development through a variety of initiatives.
• Reforming government purchasing and contracting arrangements.

The Rudd Government said that it would carefully consider the detail of the report.

The report and a series of supporting appendices are available on the Productivity Commission website.