Federal Register of Legislation - Australian Government

Primary content

A Bill for an Act to prohibit Commonwealth agreements from restricting or preventing not-for-profit entities from commenting on, advocating support for or opposing changes to Commonwealth law, policy or practice, and for related purposes
Administered by: Finance
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Registered 15 Mar 2013
Introduced Senate 13 Mar 2013



The Parliament of the Commonwealth of Australia




Not-for-Profit Sector Freedom to Advocate Bill 2013


Explanatory Memorandum


Circulated by authority of Senator the Hon Penny Wong, Minister for Finance and Deregulation


Not-for-Profit Sector Freedom to Advocate Bill 2013


The Bill introduces provisions that would prohibit and invalidate clauses in Commonwealth agreements with the not-for-profit (NFP) sector that restrict or prevent NFP entities from advocating on Commonwealth law, policy or actions (‘gag clauses’). 

The Bill will provide a clear and tangible response to the advocacy concerns raised by the NFP sector.  The use of ‘gag clauses’ can restrict the NFP sector from engaging in debate or lobbying on Commonwealth policy.  The Bill will enable ongoing positive engagement, together with open communication and debate, between the Federal Government and the NFP sector.

Financial impact statement

The Bill will not have a financial impact on the NFP sector.

There is a remote possibility that the retrospective aspect of invalidating ‘gag clauses’ in existing Commonwealth agreements may result in a minor financial impact to the Commonwealth.  In this highly unlikely circumstance, the Bill provides for reasonable compensation, where there has been an acquisition of property by the Commonwealth.

Statement of Compatibility with Human Rights

The Bill engages and promotes the right of freedom of expression as set out in Article 19 of the International Covenant on Civil and Political Right (ICCPR).  The Bill will prevent the Commonwealth from including clauses in agreements that prevent or restrict NFP entities from advocating on Commonwealth policy issues.


The Bill does not relate to any of the other applicable rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011, such as encompassed in the ICCPR.


The Bill does not limit any human rights, nor propose any offences or penalties. 


This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011.


Clause 1

This clause provides that, if enacted, the Bill may be cited as the Not-for-Profit Sector Freedom to Advocate Act 2013.

Clause 2

This clause provides for the Act to commence on the day after it receives the Royal Assent.

Clause 3

This clause contains a range of definitions that apply for the purpose of the Bill.  The scope and intent of the range of definitions are largely self-explanatory, or drawn from other legislation, but the following point should be noted:

-          The definition of ‘confidential information’ encompasses existing concepts contained in the Freedom of Information Act 1982.  The definition of ‘prohibited content’ also excludes personal information within the meaning of the Privacy Act 1988.  This definition should be read narrowly.  Parties to the agreement must be able to justify why particular information is confidential.

Clause 4

This clause is the main operative clause in the Bill.  It protects and promotes the NFP sector’s freedom to advocate or oppose changes on Commonwealth law, policy and actions.  It does this by preventing an agency from including prohibited content in a Commonwealth agreement.  The Bill recognises that a strong, independent and innovative NFP sector is essential to building an inclusive community. 

The Commonwealth government is committed to promoting the NFP sector’s freedom to advocate.  The Bill is intended to encompass and build on the Commonwealth Grant Guidelines, which include a specific clause that prevents agency staff from including suppression clauses in grant application and selection processes or clauses in grant agreements.

This clause invalidates any clauses in Commonwealth agreements that purport to restrict or prevent the NFP sector from advocating on Commonwealth policy issues.  As a result, it will not be necessary to monitor compliance with the legislation, since any clause in a Commonwealth agreement that purports to ‘gag’ the NFP sector will simply be void from the day after the Act receives the Royal Assent.  This will assist to enable the freedom of the NFP sector to advocate on Commonwealth policy issues in the future. 

Clause 5

‘Prohibited content’ is defined broadly to enable the NFP sector to advocate freely on the breadth of Commonwealth law, policy or practice.  This freedom to advocate should be read to include the release of non-confidential information. 

The definition of ‘prohibited content’ does not extend to confidential or personal information. 

Clause 6

Clause 6 is included to ensure the constitutional validity of the Bill.  It is intended to cover the highly unlikely circumstance that a party to an agreement with the Commonwealth that was entered into before the commencement of the legislation would suffer loss because a ‘gag clause’ in the agreement became void upon commencement of the legislation. In the event that this situation does arise, clause 4 will ensure that the legislation does not give rise to an acquisition of property other than on just terms, by enabling reasonable compensation to be paid to the affected party.

Clause 7

Clause 7 provides that the Act will apply to all Commonwealth agreements, regardless of whether they were entered into prior to the commencement of the legislation.  Since 2008, it has been Commonwealth government policy to not include any ‘gag clauses’ in Commonwealth agreements, in order to remove any restrictions on the NFP sector from engaging in policy and debate. 

Where a Commonwealth agreement contains ‘prohibited content’ immediately before the commencement of the law, the ‘prohibited content’ will become void on the commencement of the law and any right, privilege, obligation or liability acquired in relation to the ‘prohibited content’ before the commencement of the law will continue to exist (i.e. can still be enforced).