The federal government claims it lacks the constitutional power to fund advocacy activity, although it refuses to release its advice and legal experts uniformly reject the assertion. By Mike Seccombe.

Legal gambit to cut charity funding

Families and Social Services Minister Paul Fletcher.
Families and Social Services Minister Paul Fletcher.
Credit: AAP Image / Dan Himbrechts

Of all the many ways the federal government has tried to suppress criticism of its policies from charitable organisations, its latest may be the most audacious. Now it is trying to stifle them by using Australia’s constitution as a gag.

Allegedly on the basis of legal advice, the government has informed a number of organisations, notably including the Australian Council of Social Service (ACOSS), that they would no longer receive funding for “advocacy activities” because such funding is not permitted under the constitution.

Broadly applied, the new tactic would further constrain charities and non-government organisations that rely on government grants from using those funds to engage in advocacy and campaigning on issues such as poverty and inequality, climate and energy, the environment more generally, health, housing, tax policy, and myriad other matters with which they are engaged.

It’s an extraordinary argument, and one that has “upped the ante”, even by comparison with its previous efforts at silencing dissent from charitable organisations, according to ACOSS and the Public Interest Advocacy Centre (PIAC).

“This argument that the Commonwealth lacks constitutional power to fund advocacy is new, and has potentially far-reaching (and startling) consequences if correct,” the chief executives of the two organisations, Cassandra Goldie and Jonathon Hunyor, write in a detailed critique of the relationship between conservative governments and civil society groups, provided to The Saturday Paper.

“The Commonwealth has been providing advocacy funding to organisations, such as the ACOSS, for many decades.”

But recent negotiations have seen the government claim it can no longer do so, having allegedly realised – after well over 100 years – that Australia’s founding document prohibits it.

There is some irony in this late discovery, for it appears the government only came to it through a legal case that it lost.

That case – Williams v Commonwealth, also known as the “school chaplaincy case” – was a David and Goliath affair that began when a Queensland parent, Ron Williams, objected to the federal government’s funding of a religious chaplaincy program in state schools.

He took the government to the High Court and won, twice. The first case was in 2012 and the second in 2014.

At Federation, the various states ceded certain heads of power to the new Commonwealth – in interstate trade and commerce, external affairs, corporations et cetera – and retained other “residual” powers. The federal government lost the case because the court determined it had acted outside its powers.

As Goldie and Hunyor understand it, the federal government’s new position on the constitutionality of funding advocacy “is said to follow from the decision in Williams v Commonwealth … Following this decision, it is clear that Commonwealth government expenditure must be ultimately supported by a constitutional head of power.”

Because there is no explicit head of power to make laws and provide funding for “advocacy”, the government claims it cannot be done.

Note their use of the phrase “is said to”. That’s because the government has provided no legal advice supporting its position. The opposition has called on them to release the advice.

“In particular, it is not clear what is meant by ‘advocacy’ in this context,” Goldie and Hunyor say.

“We’ve asked the government to provide their legal advice. They’ve declined. We’ve sought more detail, that hasn’t been forthcoming,” Goldie tells The Saturday Paper.

“We had indications, informally, over a few years, for example when the government defunded National Shelter,” she says.

National Shelter seeks to push the case for more and better low-income housing by, as it says on its website, “influencing government policy and action, and by raising public awareness” about housing issues. That is, it focuses on advocacy rather than direct delivery of services.

“I was told [the defunding was] because of the Williams case,” she says.

“But we have only been formally engaged with the government more recently when they changed the guidelines of the program under which we get funding, to take advocacy out.”

ACOSS was alerted to that change via a “Q&A” document from the department last March, during negotiations to extend its grant funding, which was due to expire in June last year. It eventually secured $3.4 million over three years.

The language was confusing. It said the organisation could use the funds to “contribute to/provide feedback on the government’s social policy and the Department of Social Services’ families and communities policy and issues impacting the sector”.

But it also said that if they wished to “undertake advocacy”, ACOSS and similar peak bodies would have to fund it from “sources other than the Commonwealth”.

What’s the difference between feedback and advocacy, and what does the constitution have to do with it?

Despite a lot of “to-ing and fro-ing” since, says Goldie, they have achieved no clarity.

So ACOSS, through PIAC, commissioned its own legal opinion, from Jeremy Kirk, SC, an expert in constitutional law.

“The advice, which ACOSS has provided to government, is clear and unequivocal: there is no constitutional barrier to Commonwealth funding for advocacy,” say Hunyor and Goldie.

Professor Anne Twomey, a specialist in constitutional law at the University of Sydney, is of the same view.

“I have raised this question with a lot of people, asking if they can see anything in the Williams case that would stop the government from funding charities to the extent that they engage in advocacy. And I’ve not met anyone yet who actually thinks there were legs to that argument.

“No one’s been able to work out what on earth the government is on about.”

Although the government’s claim is a “mystery” in legal terms, Twomey says, it makes more sense in political terms, as cover for the government’s efforts to silence critics.

“It’s an excuse,” says Twomey. “They can say, ‘Someone else is making us do this – those awful lawyers and the High Court and the constitution.’”

The reality is, governments in general seek to silence criticism.

“If you go back to the original legislation that caused the High Court to recognise an implied freedom of political communication, that was enacted by the Hawke government in the early 1990s,” Twomey says. “They wanted to make sure the only people who were funded in relation to election campaigns were the main parties.”

As things stand, charitable organisations can advocate on political issues, and compare the various policies of parties, although they cannot actually advocate a vote for one party or another.

“And to some extent it’s been realised that is an advantage to Labor because people concerned about the environment or homelessness et cetera, are more likely to favour the left side of politics,” Twomey says.

“Then again, when Labor is in government, they often find these organisations’ people are just as critical of them, because they don’t live up to expectations.”

It has been conservative governments in particular, however, that have tried to silence dissent. Twenty-odd years ago, as Goldie and Hunyor note, “the Howard government not only cut advocacy funding to civil society organisations, but went further to include explicit ‘gag clauses’ into Commonwealth funding contracts”.

In some cases these clauses required organisations to inform the government before making public comment, or seek ministerial approval, or, in others, simply prohibited comment altogether.

In response, in 2013, the Gillard government passed the Not-for-profit Sector Freedom to Advocate Act, to prevent such conditions being imposed in Commonwealth grants.

But that doesn’t stop the government from simply defunding bodies that annoy it. And the current government has done quite a lot of that, as Twomey noted last year in a comprehensive paper, “Silencing the Voices of Charities in Advocacy and Issues Campaigning”.

“In 2014,” she wrote, “the Commonwealth Government chose to defund a number of advocacy bodies, such as the Refugee Council of Australia, the Australian Youth Affairs [Coalition], the Alcohol and [Other Drugs] Council of Australia and the National Congress of Australia’s First Peoples.

“The then minister for immigration, Scott Morrison, was reported as saying with respect to the Refugee Council of Australia that the government did not believe that ‘taxpayer funding should be there to support what is effectively an advocacy group’.”

“And,” she says, “you can understand why it irks government to be funding charities, only to have the charities use that funding to criticise the government.

“The other side of the argument is that it improves outcomes, because you’ve got these organisations that can scrutinise policy and let them know the genuine consequences and effects on people. That is actually an important part of the system.”

But the current government has sought to cow civil society groups through various actions, from defunding to attempts at gagging, to legislative measures such as last year’s legislation amending the electoral act and limiting foreign influence in Australian politics, to things as petty as excluding organisations it doesn’t like from the budget lockup.

Although big organisations such as ACOSS can find a way around the latest attempt to limit advocacy – they do so by funding those activities out of a “different pot of money” – others can’t, says Hunyor.

“Just the knowledge that the government has an antipathy to advocacy has a chilling effect,” he says.

The evidence is there to see. In 2017, a survey of 1462 senior representatives of Australian non-government organisations, conducted by Melbourne University academics Sarah Maddison and Andrea Carson, found organisations increasingly responded to government hostility by “self-silencing”.

More than half of those surveyed said they felt constrained by the fear of funding cuts, the fear of losing access to decision-makers, decreased resources for advocacy, and clauses in their funding agreements that restricted public comment.

The latest “constitutional” tactic by the government can only exacerbate that, says Goldie.

A further anecdotal indication of that chilling effect: Goldie suggested The Saturday Paper speak with another significant charity on which the government had used its constitutional prohibition argument.

We contacted the chief executive, only to be told they would not talk about it.

“I’m overly cautious about speaking in any way critically of the government. We have funding submissions in at the moment.”

That’s the way it works, even if the whole constitution argument is, as multiple legal experts say, bogus.

We contacted the office of the minister for families and social services, Paul Fletcher, whose department funds ACOSS, seeking an explanation of the legal position. There was no reply.

This article was first published in the print edition of The Saturday Paper on March 30, 2019 as "Legal gambit to deny charity funding".

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