Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Hansard source

This motion goes to the tax treatment of charitable organisations in Australia. The government does recognise that it is an important issue. The contribution regulation and tax treatment of this sector has very recently been the subject of two significant reviews: the Productivity Commission’s study of the contribution of the not-for-profit sector, and the independent tax review. Both reports are currently before the government. Both reviews involved extensive consultation, with the Productivity Commission receiving over 300 submissions during its 12-month-long study and the independent tax review receiving over 1,500 written submissions and 4,700 letters.

It should be noted that both of these substantial pieces of independent work have benefited from extensive prior consideration of this issue. They follow on the back of three important reviews of the not-for-profit sector conducted over the past 15 years—namely, the 1995 Industry Commission report on charitable organisations in Australia, the 2001 Report of the inquiry into the definition of charities and related organisations and the 2008 Senate Standing Committee on Economics inquiry into disclosure regimes for charities and not-for-profit organisations. It should be specifically noted that one of these precursor reviews was conducted by the Senate economics committee, the same body that the current motion seeks to refer the matter to today. In addition, the 2001 Report of the inquiry into the definition of charities and related organisations went directly to the matter at the centre of today’s motion, recommending that the government strengthen the current public benefit test for charities. The subsequent draft Charities Bill 2003, based on the recommendations of the 2001 inquiry, included a requirement that to be a charity the entity must also meet a public benefit test. To be of public benefit, its purpose must:

• be aimed at achieving a universal or common good;
• have practical utility; and
• be directed to the benefit of the general community or a ‘sufficient section of the community’.

The Senate should note that the bill did not ultimately come before the parliament due to concerns raised by both the sector and the Board of Taxation that the bill did not provide the sector with sufficient certainty.

The point here is that this issue has been examined extensively, and this history will inform the government’s current and ongoing detailed consideration of this matter. Based on these detailed records of analysis and in light of the two review reports currently before the government, we will not be supporting this motion today. A further review of or inquiry into this issue is currently unwarranted.

The government acknowledge Senator Xenophon’s strong interest in this issue and, through the Assistant Treasurer, Senator Sherry, we will keep Senator Xenophon informed of progress on these matters. We are happy to continue to engage with him on this issue going forward. I have also been advised by Senator Stephens that she is leading a significant piece of work in third-party reform which will also inform the government in this area. I thank the Senate.