Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I thank Senator Xenophon for the advance notice of the general theme of his question. Tax deductibility is a tightly targeted concession. Organisations that can accept tax deductible gifts are characterised by the broad benefits that they bestow to the public. To accept tax deductible gifts an organisation must be either endorsed by the tax office as a deductible-gift recipient, a DGR, under one of the general categories or specifically listed in the tax law. The general categories include universities, overseas aid organisations, public hospitals and public ambulance services. These categories are partially administered by the Commissioner of Taxation. None of the general DGR categories cover child care. The parents of children in child care receive more than an incidental private benefit. In addition, providing not-for-profit childcare centres with DGR status could raise integrity concerns if centres reduced fees and solicited tax deductible donations from parents instead.

For similar reasons schools cannot collect tax deductible donations. As charities, not-for-profit childcare centres can access a range of tax concessions, including income tax exemption, GST charity concessions and FBT concessions. In 2004, gift deductibility was extended to state and territory playgroup associations and the federal playgroup association. Playgroups provide a low-cost facility which assists small children, especially those who may otherwise be socially isolated and disadvantaged because of disability or low-socioeconomic status. The childcare tax rebate and childcare benefit both help families with the cost of child care. The childcare tax rebate covers 50 per cent of out-of-pocket childcare expenses for approved child care, up to $7,500 per child per year, for eligible families. (Time expired)