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Tax Exemption Reform:
Inquiry recommends a national charities commission
ABC News Radio - PM Shane McLeod and Sabra Lane
September 8, 2010

Source | Audio


SHANE MCLEOD: A Senate committee has recommended setting up a commission to oversee charities and church groups that enjoy tax free status.

The committee's final report was published yesterday, but as you might guess it was swamped by the Independents' decision to support Julia Gillard in becoming Prime Minister.

The recommendation stems from Independent Senator Nick Xenophon's pursuit of the Church of Scientology and his argument that there should be a public benefit test for organisations that are given tax free status.

Senator Xenophon says establishing a charities commission should now be an urgent priority for the Gillard Government.

From Canberra, Sabra Lane reports.

SABRA LANE: The not for profit sector's been the subject of four separate Senate inquiries over the past 10 years, in most cases the recommendations for greater scrutiny have been ignored.

The latest inquiry stemmed from Independent Nick Xenophon's concerns about the controversial organisation, the Church of Scientology.

Senator Nick Xenophon's argued while most not for profits do offer a public benefit to the wider community, he believes they should be forced to demonstrate it publicly, by being transparent and accountable for what they do.

Senator Nick Xenophon.

NICK XENOPHON: The pleasant surprise here is that the findings of this inquiry went further than what I proposed. I proposed a public benefit test to be incorporated into the Income Tax Act.

The committee, the bipartisan committee found that not only should there be a public benefit test, but it ought to be administered by a charities commission which would have a role to supervise, to scrutinise not for profit organisations given that there are literally billions of dollars in tax concessions, tax free concessions that go to these organisations and it's in the public interest to have a level of scrutiny that is lacking in the current system.

This can't wait any longer. It's important that this reform be an urgent priority for the new government.

SABRA LANE: Liberal Senator Alan Eggleston was part of the committee.

ALAN EGGLESTON: It's time we went the way of the rest of the world and provided that kind of organisational structure to oversee not for profits and charities in this country.

SABRA LANE: Labor Senator Doug Cameron says the evidence given to the inquiry was compelling.

DOUG CAMERON: Much of the evidence was in camera so I'm not at liberty to talk about that evidence, but it's quite clear that there is unacceptable behaviour our there, there is illegal behaviour, the psychological pressure on individuals and this is in relation to cult-like groups and, you know, we've seen the results of that overseas and I think it's incumbent upon the committee, was incumbent upon the committee to recommend to government that we look at this very seriously.

SABRA LANE: And Senator Cameron says he was staggered that no one could tell the committee the value of tax concessions given to charities and churches who receive tax free status.

DOUG CAMERON: I just found it absolutely mind boggling that no one, not the Productivity Commission, not Treasury, not the Tax Department could tell us what the cost of charities is to the public purse in Australia.

The estimates we have are between $1 billion and $8 billion. And this is an information asymmetry that has to be addressed. We really need to understand what's happening and other countries are doing that through the establishment of a charities commission.

SABRA LANE: Senator Xenophon says given the new minority Government and the fact the Greens will hold the balance in the Senate from mid next year, that this inquiry's findings can't be ignored.

NICK XENOPHON: The dynamics of this debate have changed and in particular as a result of what has occurred since the election, I think there will be a charities commission. It's inevitable. The Labor Party has committed to establishing a commission. The form of that needs to be determined but it needs to be effective, it needs to have the sort of teeth that the UK Charities Commission has.

The other thing that the inquiry found, though, was that it asked for the Attorney-General to provide a report on the operation of French anti-cult laws, where the criminal law, where industrial laws are much stronger in dealing with victims of cults.

And that's the sort of thing that also needs to be looked at. Not just a charities commission, but also improvements in our criminal and civil and industrial law to ensure that people aren't exploited, aren't tormented by organisations that they try to leave or have left in terms of the bullying and harassment and the stalking that goes on in a number of cases when people leave organisations.

SABRA LANE: The commission could take away the tax free status of an organisation found to be in breach of the rules, or not in the public interest.

The Henry Tax Review also recommended a charities commission. Now that the Lower House Independents have secured an agreement from the Gillard Government to hold a tax summit by the end of June next year, Treasurer Wayne Swan expects the commission idea will be part of the discussion.

WAYNE SWAN: It's certainly part of the Henry Review and part which I'm sure will be fully debated when we have our tax forum, which the Independents will be at as well.

SHANE MCLEOD: The Treasurer Wayne Swan. That report by Sabra Lane.



Disclaimer:This news page is about groups, organizations or movements, which may have been called "cults" and/or "cult-like" in some way, shape or form. But not all groups called either "cults" or "cult-like" are harmful. Instead, they may be benign and generally defined as simply people intensely devoted to a person, place or thing. Therefore, the discussion or mention of a group, organization or person on this page, is not necessarily meant pejoratively. Readers are encouraged to read widely on a topic before forming an opinion. Never accept information from a single source at face value. This website only holds a small amount of information and should not be relied on as a complete source. For example, if you find older information, this should be weighed up against newer information as circumstances can change.
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