Charity status doubt
By Chris Lindsay
Proposed Federal legislation to define a charity has cast doubt on the ability of sections of the Catholic Church to continue to function as charities.
The legislation will also gag charities from advocating changes in government policy to improve the lot of the people they support.
The Bill proposes to enshrine in legislation a definition of both a charity and a charitable purpose.
Essentially, the proposed legislation defines a charity as an entity which: is not-for profit; has a dominant charitable purpose; is for the public benefit; and does not have a disqualifying purpose.
Disqualifying purposes include:
. advocating a political party or cause;
Seven Catholic organisations have stated in a joint submission to the Board of Taxation that the legislation is impracticable and unworkable.
The organisations making the submission were the Australian Catholic Bishops’ Conference, the Australian Conference of Leaders of Religious Institutes, Catholic Welfare Australia, Catholic Health Australia, the National Catholic Education Commission, the Archdiocese of Melbourne, and Catholic Church Insurances.
The combined submission stressed that the Church’s structure is complex and that Catholic organisations must be assessed for their charity status as a whole, and not in isolation.
The submission said various elements of the Bill are ambiguous, and the Bill fails to give greater clarity and transparency to charities.
Fr Brian Lucas, general secretary of the Australian Catholic Bishops’ Conference, said he didn’t know whether the intention of the legislation was to gag charities, “but it certainly is the effect. It needs to be changed”.
He pointed out that the call to advocate on behalf of others is not only a Christian imperative, it is part of the activity of a healthy democratic society.
“The other area of concern is the complex character of a charitable organisation like the Catholic Church,” Fr Lucas said.
“The tax office looks at those parts of the Church in isolation and attempts to deny them charitablestatus because they think that a particular activity has some form of commercial element.
“Two areas that might fall into that area are aged care and some of the administrative activities of the Church, the entities that provide the infrastructure.
“Charities now have to be registered with the Taxation Office as an income tax exempt charity.
“There have been some instances where charitable status has been refused.”
A report on the Bill prepared by Margaret Deerain, senior policy analyst with Catholic Health Australia, says the Government wants to capture in a statute what has been determined by four centuries of common law.
The Church submission argued that the common law approach to identifying charitable organisations is flexible enough to allow new kinds of activity and organisations to be recognised as charitable in light of changing economic and social conditions.
The view was that defining too closely by statute what is charitable and what isn’t will lead to increased litigation and dispute, not less.
“The draft legislation and explanatory material provide little justification for how the proposed legislation will in fact improve how the charitable sector operates or how it will remove what are perceived to be uncertainties and inconsistencies,” the report noted.