Scrapping the national body responsible for regulating charities is unneccessary, federal Labor says.
The federal opposition has lashed out at a new report recommending the government proceed with plans to scrap the national body responsible for regulating charities.
A Centre for Independent Studies report released on Thursday calls on the government to abolish what is says is the ineffectual Australian Charities and Not-for-Profits Commission (ACNC).
It says despite being in operation for more than a year, the ACNC has failed to fulfill its key mandates - reducing the red-tape burden for charities, increasing public trust in the sector, and policing fraud and wrongdoing.
And it's unlikely to do so in future because of "fundamental flaws" in the regulatory model.
"It doesn't need more time, it needs to be abolished," the report says.
Social Services Minister Kevin Andrews plans to scrap the ACNC in the coming months and is considering replacing it with an American-style online "charity navigator", which polices charities based on private sector feedback.
But the opposition says it's unnecessary to remove the ACNC, which Labor established in 2012.
Shadow assistant treasurer Andrew Leigh said it will mean the Australian Tax Office might have a conflict of interest if it both collects revenue and determines whether an organisation gets tax-deductable status.
"Only blinkered idealogy would have you say the tax office would do a better job becoming the default regulator of charities," he told AAP on Thursday.
Dr Leigh said replacing the body with a US-style league system was "completely baffling" because that system supported an ACNC-type model already.
"It would be a retrograde step to abolish the ACNC and it would go entirely in the opposite direction of other nations in terms of an efficient regulator of charities."