Nick Xenophon (SA, Independent) Share this | Hansard source

by leave—I move amendments (1) and (2) on sheet 6105 standing in my name:

(1)    Clause 2, page 2 (after table item 7), insert:

(2)    Page 34 (after line 6), after Schedule 4, insert:

Schedule 4A—Public benefit test

Income Tax Assessment Act 1997

1  After section 50-50

Insert:

50-51  Public benefit test for items 1.1 and 1.2

Public benefit test

        (1)    The regulations must formulate a test (to be known as the public benefit test) against which the aims and activities of an entity may be assessed.

        (2)    The public benefit test must include the following key principles:

             (a)    there must be an identifiable benefit arising from the aims and activities of an entity;

             (b)    the benefit must be balanced against any detriment or harm;

             (c)    the benefit must be to the public or a significant section of the public, and not merely to individuals with a material connection to the entity.

        (3)    The public benefit test may contain provisions relating to the manner in which the test is to be applied to the aims and activities of an entity, as well as ancillary or incidental provisions.

        (4)    The Minister must take all reasonable steps to ensure that regulations are made for the purposes of subsection (1) before 1 July 2010.

Entities must meet public benefit test

        (5)    An entity covered by item 1.1 or 1.2 is not exempt from income tax unless the entity meets the public benefit test.

During the last sitting session I moved two Senate motions calling for an inquiry into the Church of Scientology and in particular into the need for a public benefit test for organisations that receive tax exemptions from the Australian government. Recommendation 41 of the Henry tax review supports the establishment of a national charities commission which would monitor, regulate and streamline tax concessions for the not-for-profit sector. Importantly, it would also be tasked with codifying the definition of a charity.

The government’s response during the last sitting session was that they did not want to pre-empt the Henry tax review in relation to considering the motions I had put before the Senate—in particular, one motion which specifically targeted the whole concept of a public benefit test like that which exists in the United Kingdom. The review is out and the recommendation is there, but the government has chosen not to adopt it.

A public benefit test currently exists in the United Kingdom. This amendment would introduce a similar process here. In the United Kingdom it applies to religions and charitable organisations. It says that there must be an identifiable benefit arising from the aims and activities of such an entity, the benefit must be balanced against any detriment or harm and the benefit must be to the public or a significant section of the public and not merely to individuals with a material connection to the entity.

This amendment puts in place a reasonable test for bodies seeking to be recognised as charities and seeking to get tax-free status. It ensures that their aims and activities are of true benefit to the community as a whole. For charities and other entities to receive tax exemption it seems only fair that they must meet this public benefit test if they are to be propped up and supported by the Australian taxpayer.

I make no apology for introducing this amendment here in the context of this legislation. I have flagged previously that I will be persistent and relentless in pursuing a just outcome for the victims of Scientology to ensure that this organisation receives appropriate scrutiny. Indeed, for any organisation that receives the benefit of a tax-free status there must be a degree of accountability, and that is lacking in our current laws. This would fix that, by adopting the tried and tested UK test of a public benefit test. Some of the allegations that have been made against the Church of Scientology include criminal behaviour, coerced abortions and stalking. There is completely unconscionable conduct in relation to the way their members are treated. There are issues in relation to child labour laws and in relation to the way employees and volunteers are treated. The whole issue of the conduct of this organisation—the hundreds of thousands of dollars they charge, and more, for their courses—seems extraordinary. People are put under pressure and families are ripped apart. It causes harm and devastation to individuals.

I acknowledge the support of Professor Pat McGorry, an Australian of the Year and one of Australia’s pre-eminent experts in mental health, and others, such as Professor Ian Hickie, who have expressed real concern that this organisation is against people seeking assistance from medical practitioners, psychiatrists or psychologists for mental health issues—that is dangerous. And that is why it is appropriate that we have once and for all a public benefit test. I seek the support of my colleagues to do so.

If this is defeated, as I expect it will be, I indicate that, every week that this Senate sits, there will be a motion related to this issue. Senator Sherry is smiling and he does so with good grace, but this is an issue that will not go away. Too many people have been hurt by this organisation. We need to have a degree of accountability and public scrutiny. This mechanism of a public benefit test is a significant way forward. It has been tried and tested and been subject to robust scrutiny in the United Kingdom. We should adopt it here.