Footnotes
Summary and recommendations
[1]
The 'third sector' refers to organisations that are neither part of the
private sector nor the government sector.
Chapter 1 - Inquiry into Tax Laws Amendment (Public Benefit Test) Bill 2010
[1]
Senator Nick Xenophon, Second Reading Speech, Senate Hansard, 13
May 2010, p. 3.
[2]
Tax Laws Amendment (Public Benefit Test) Bill 2010, proposed subsection
50-51(1), lines 8-10, p. 3.
[3]
Tax Laws Amendment (Public Benefit Test) Bill 2010, proposed subsection
50-51(2), lines 11‑17, p. 3.
[4]
Tax Laws Amendment (Public Benefit Test) Bill 2010, proposed subsection
50-51(3), lines 18‑23, p. 3.
[5]
Scrutiny of Bills Committee, Alert Digest, No. 7 of 2010, 23 June
2010, p. 12.
[6] Ms Louise McBride, Submission
66, Attachment 1; Proof Committee Hansard, 28 June 2010. Similar
objections were raised by Mr James Graham, Submission 78, and the
Western Australian branch of the International Commission of Jurists, Submission
85, and Rev. Mary Anderson, Submission 49.
[7]
Section 53 of the Constitution states: 'Proposed laws appropriating
revenue or moneys, or imposing taxation, shall not originate in the Senate...'
[8] Ms Louise McBride, Submission
66, Attachment 1, p. 1.
[9]
Permanent Trustee Australia v Commissioner of State Revenue
(Victoria), 2004, 220 CLR 388, pp 408-410.
[10]
Re Dymond, 1983, 101 CLR 23.
[11]
Laing, R, Advice: Tax Laws Amendment (Public Benefit Test) Bill 2010,
p.4.
[12] Section 55 of the
Constitution states 'Laws imposing taxation shall deal only with the imposition
of taxation, and any provision therein dealing with any other matter shall be
of no effect...'
[13]
Ms Louise McBride, Committee Hansard, 28 June 2010, p. 49.
[14] Section 116 of the
Constitution states 'The Commonwealth shall not make any law for establishing
any religion...or prohibiting the free exercise of any religion...'.
[15] Ms Louise McBride, Submission
66, Attachment 1, p. 2.
[16] Mr Andrew Lind, Partner,
Corney & Lind, Committee Hansard, 28 June 2010, p. 35.
[17] Dr Stephen Mutch, Committee
Hansard, 28 June 2010, p. 7.
[18] Examples include Anglican
Church Diocese of Sydney, Submission 10; Mr Tom Grimshaw, Submission
52; and DF Mortimer and Associates, Submission 73.
[19] Rule of Law Institute of
Australia, Submission 75, p. 3.
[20] This point was made in a
number of submissions including those received from Corney & Lind, Submission
2, p. 2, Mr Paul Paxton-Hall, Submission 62, p. 2, and Family Voice,
Submission 22, p. 4.
[21] The role of this committee is
to scrutinise the clauses of bills introduced into the Senate and advise whether
a bill, among other things, inappropriately delegates legislative power.
[22] Senate Standing Committee
for the Scrutiny of Bills, Alert Digest No. 7 of 2010, 23 June 2010, p.
11.
[23] Senate Standing Committee
for the Scrutiny of Bills, Alert Digest No. 7 of 2010, 23 June 2010, p.
12.
[24] Department of Families,
Housing, Community Services and Indigenous Affairs, A new relationship
between the Australian Government and the Third Sector—National Compact between
the Australian Government and the Third Sector, February 2010.
[25] Department of Families,
Housing, Community Services and Indigenous Affairs, A new relationship
between the Australian Government and the Third Sector—National Compact between
the Australian Government and the Third Sector, February 2010, p. 8.
Chapter 2 - Australia's not-for-profit sector and recent reviews
[1] ABS, Australian
National Accounts: Non-profit Institutions Satellite Account, Cat. No.
5256.0, 18 September 2009.
[2] Treasury, 2009 Tax Expenditures
Statement, January 2010, p. 74.
[3] Treasury, 2009 Tax
Expenditures Statement, January 2010, p. 29.
[4] Treasury, 2009 Tax
Expenditures Statement, January 2010, p. 6.
[5]
Productivity Commission, Contribution of the Not-for-Profit Sector,
January 2010, p. E7.
[6] Treasury, Inquiry into
the Definition of Charities and Related Organisations, 2001, pp 21‑22.
[7] Treasury, Inquiry into
the Definition of Charities and Related Organisations, 2001, p. 4.
[8] Treasury, Inquiry into
the Definition of Charities and Related Organisations, 2001, pp 15‑18.
[9] The Hon Peter Costello,
Commonwealth Treasurer, Government Response to Charities Definition Inquiry, 29
August 2001, Press Release No. 49, p. 1.
[10] The Board of Taxation, Consultation
on the Definition of Charity—A Report to the Treasurer, 2003, Chapter 2, pp
10-11. www.taxboard.gov.au viewed 15
July 2010.
[11] Treasury, Inquiry into
the Definition of Charities and Related Organisations, 2001, p. 14.
[12]
Senate Standing Committee on Economics, Disclosure regimes for
charities and not-for-profit organisations, December 2008, p. 5.
[13]
Productivity Commission, Contribution of the Not-for-Profit Sector,
January 2010, p. iii.
[14] Productivity Commission, Contribution
of the Not-for-Profit Sector, January 2010, pp 113, 117, 119, 144, 148-152
and 156.
[15] Productivity Commission, Contribution
of the Not-for-Profit Sector, January 2010, pp 113, 117, 119, 144, 148-152
and 156.
[16] Australia's Future Tax
System—Report to the Treasurer, Part One—Overview, December 2009, pp v–vii.
[17] Australia's Future Tax
System—Report to the Treasurer, Part Two—Detailed Analysis, December 2009,
p. 205.
[18] Australia's Future Tax
System—Report to the Treasurer, Part Two—Detailed Analysis, December 2009,
p. 212.
Chapter 3 - Charities and tax treatment
[1]
Ms Tanya Smith, Submission 32, p. 1.
[2] Father Brian Lucas,
General Secretary, Australian Catholic Bishops Conference, Committee Hansard,
29 June 2010, p. 18, repeated p. 20.
[3] Department of the
Treasury, Submission 82, June 2010, pp 4-5. The four heads were set out
by Lord Macnaughton in Commissioners for Special Purposes of Income Tax v
Pemsel [1891] AC 531.
[4]
Department of the Treasury, Submission 82, pp 4-5.
[5]
Department of the Treasury, Submission 82, p. 3.
[6] Mr Trevor Garrett, Chief
Executive, Charities Commission New Zealand, Committee Hansard, 28 June
2010, p. 25.
[7] Mr David Graham, Submission
7, p. 1.
[8] Ms Joanne Edwardes, Head,
Status and Public Benefit Policy, Charity Commission for England and Wales, Committee
Hansard, 28 June 2010, p. 68.
[9] Ms Joanne Edwardes,
Charity Commission for England and Wales, Committee Hansard,
28 June 2010,p. 68.
[10] Name withheld, Submission
13, p. 1.
[11] Ms Edwardes, Charity
Commission of England and Wales, Committee Hansard, 28 June 2010, pp
63-64.
[12]
Southland Vineyeard Church, Submission 12, p. 2.
[13] Ms Joanne Edwardes, Head,
Status and Public Benefit Policy, Charity Commission for England and Wales, Committee
Hansard, 28 June 2010, p. 65.
[14] Mr Trevor Garrett, Chief
Executive, Charities Commission New Zealand, Committee Hansard, 28 June
2010, p. 28.
[15] Mr Alan Low, Submission
18, p. 1. A very similar view was put in Submission 3, p. 1.
[16]
Mrs Cassandra Kelsey, Submission 38, p. 1.
[17] Name withheld, Submission
3, p. 1.
[18]
Vision Australia, Submission 51, p. 5.
[19]
Anglicare Australia, Submission 69, citing former Senator Andrew
Murray and Mary O’Donovan, One Regulator, One System, One Law: the case for
introducing a new regulatory system for the not‑for-profit sector,
Canberra, July 2006.
[20] 154 CLR 120. Department of
the Treasury, Submission 82, p. 5. The High Court was hearing an appeal
against a decision by the Supreme Court of Victoria about whether an
organisation was a genuinely religious organisation; Dr Stephen Mutch, Submission
16, Attachment 1, pp 61-65; Confidential Submission 23. One
submitter went so far as to call the High Court's ruling 'the definitive legal
decision on freedom of religion in the world'; Confidential Submission 74,
p. 2.
[21] Dr Matthew Turnour, Submission
1, Attachment 1, p. 7.
[22]
Ms Louise McBride, Submission 66, Attachment 1, pp 8-10.
[23]
This comment was highlighted by Dr Stephen Mutch, Submission 16,
Attachment 1, pp 74-75.
[24] Competitive neutrality is
the principle that promotes the equal treatment by government of competing
organisations to achieve a level playing field by removing artificial
advantages. It is a key aspect of promoting strong competition.
[25] Australia's Future Tax
System–Report to the Treasurer–Part Two, Detailed Analysis, December 2009,
p. 206.
[26] 2008 HCA55, 3 December
2008. Word Investments operated a commercial funeral business to fund its
translations of the Bible.
[27] Ms Sandra Roussel, Manager,
Philanthropy and Exemptions Unit, Department of the Treasury, Committee
Hansard, 29 June 2010, p. 49.
[28] Productivity Commission, Contribution
of the Not-for-Profit Sector, January 2010 p. 197.
[29] Australia's Future Tax
System–Report to the Treasurer–Part Two, Detailed Analysis, December 2009,
p. 209.
[30]
Anglicare Sydney, Submission 46, p. 2.
[31]
Mr Andrew Lind, Partner, Corney and Lind Lawyers, Committee Hansard,
28 June 2010, p. 35.
[32] The responsibility for
endorsement of charities rests with the Commissioner of Taxation.
[33] Division 426 of the TAA
1953 sets out the procedural rules relating to endorsement of charities and
other entities. These rules cover matters such as the application for and
revocation of endorsement, and the entry of the details of endorsement on the
Australian Business Register.
[34] Australian Taxation Office,
Income tax guide for non–profit organisations, NAT 7967‑03.2007,
2007, p. 63.
[35]
Australian Taxation Office, Income tax guide for non-profit
organisations, NAT 7967‑03.2007, 2007, p. 21.
[36] ATO, Income tax guide
for non-profit organisations, 2007, p. 33.
[37] Australian Taxation Office,
Taxation Ruling TR 2005/21—Income tax and fringe benefits tax: charities,
para 43 and pp 8-11.
[38] Taxation Ruling TR
2005/21, para 50 and 58, pp 13-14.
[39] Taxation Ruling TR
2005/21, paras 128-131, pp 34-36.
[40] Australian Taxation Office,
Income tax guide for non–profit organisations, NAT 7967‑03.2007,
2007, p. 33.
[41] Mr Michael Hardy, Assistant
Commissioner, Australian Taxation Office, Committee Hansard, 29 June
2010, p. 41.
[42] Australian Taxation Office,
Income tax guide for non–profit organisations, NAT 7967‑03.2007,
2007, p. 20.
[43] Mr Michael Hardy, Assistant
Commissioner, Australian Taxation Office, Committee Hansard, 29 June
2010, p. 40.
[44] Mr Michael Hardy,
Australian Taxation Office, Committee Hansard, 29 June 2010, p. 40.
[45] Department of the Treasury,
Submission 82, p. 5.
[46]
Dr Stephen Mutch, Committee Hansard, 28 June 2010, p. 2.
[47] Mr Andrew Lind, Partner,
Corney and Lind Lawyers, Committee Hansard, 28 June 2010, p. 36.
[48] Department of the Treasury,
Submission 82, p. 6.
[49] Mr Michael Hardy, Assistant
Commissioner, Australian Taxation Office, Committee Hansard, 29 June
2010, p. 40.
[50] Mr Michael Willcock,
General Manager, Personal and Retirement Income Division, Department of the
Treasury, Committee Hansard, 29 June 2010, p. 36.
[51] Charity Commission for
England and Wales, Submission 41, p. 2.
[52] Mrs Roslyn Hodgkins,
President, Cult Information and Family Support, Committee Hansard, 28
June 2010, p. 19. See also their Submission 14.
[53] Dr Stephen Mutch, Submission
16, p. 6.
[54] Interministerial Mission of
Vigilance and Combat Against Sectarian Aberrations. The organisation is
referred to by Dr Stephen Mutch, Submission 16, p. 6.
An English translation of their 2006 annual report is
available at http://www.miviludes.gouv.fr/IMG/pdf/Report_Miviludes_2006.pdf.
Chapter 4 - An alternative to the bill – a national commission
[1] Mr David Nicholls,
President, Atheist Foundation of Australia Incorporated, Committee Hansard,
28 June 2010, p. 58.
[2] Dr Matthew Harding, Senior
Lecturer, Not-for-Profit Project, Melbourne Law School, University of
Melbourne, Committee Hansard, 29 June 2010, p. 30.
[3] Uniting Care Australia, Submission
60, p. 1.
[4] Dr Matthew Turnour, Submission
1, p. 3.
[5] Philanthropy Australia, Submission
42, p. 1.
[6] Australian Christian
Lobby, Submission 48, p. 4.
[7] In addition to those
quoted here, submissions supportive of the bill included Vision Australia, Submission
51; Australian Skeptics, Submission 31; Ms Natascha Fareed, Submission
57; Mr Chris Lavery, Submission 64; Mr Nevin Cartwright, Submission
45; and Submissions 13, 17, 29,30, 34, 54, 70, 71 and 72 from
persons who requested their names be withheld.
[8]
Mr Dane Weber, Submission 15, p. 1.
[9]
Mr Julian Moller, Submission 27, p. 2.
[10]
Mr Hudson Carrad, Submission 65, p. 1.
[11]
Dr Matthew Harding, Committee Hansard, 29 June 2010, p. 32.
[12]
Anglicare Diocese of Sydney, Submission 46, p. 3.
[13]
PilchConnect, Submission 81, pp 2-3.
[14]
Not-for-Profit Project, University of Melbourne Law School, Submission
47, p. 2.
[15]
Asia-Pacific Centre for Social Investment and Philanthropy, Submission
53, p. 2.
[16]
The Salvation Army (Eastern Territory), Submission 61, p. 1.
[17]
Father Brian Lucas, General Secretary, Australian Bishops Conference, Committee
Hansard, 29 June 2010, p. 25.
[18] The Charities Bill, [HL]
Research Paper, 06/18, p.9; Religions Working Together (UK), Submission 86,
p. 1.
[19] The Charities Bill, [HL]
Research Paper, 06/18, p.11.
[20] The Charities Bill, [HL]
Research Paper, 06/18, p.11.
[21]
The Charities Bill, [HL] Research Paper, 06/18, p. 12.
[22]
Dr Stephen Mutch, Cults, Religion and Public Policy, PhD thesis,
University of New South Wales, March 2004, pp 365-366. Indeed, it traces
its origins back to the 19th century.
[23]
As found in the Charities Act 2006 (UK), ss 2(2)-(4).
[24]
Ms Joanne Edwardes, Head, Status and Public Benefit Policy, Charity
Commission for England and Wales, Committee Hansard, 28 June 2010, p.
62.
[25]
The Charities Act 2006 (UK), s 3(1)-(4).
[26]
Charities and Trustee Investment (Scotland) Act 2005, s7(1)-(2).
[27]
Charities and Trustee Investment (Scotland) Act 2005, s7(2)(p).
[28]
Charities and Trustee Investment (Scotland) Act 2005, s8(1).
[29]
Charities and Trustee Investment (Scotland) Act 2005, s34.
[30]
Hon Judith Tizard, House of Representatives Hansard (NZ), 12 April
2005, p. 19940.
[31]
Charities Act 2005 (NZ), section 2(1).
[32]
Ms Georgina Beyer, House of Representatives Hansard (NZ), 12 April
2005, p. 19944.
[33]
Hon Judith Tizard, House of Representatives Hansard (NZ), 12 April
2005, p. 19940.
[34]
Ms Judith Collins, House of Representatives Hansard (NZ), 12 April
2005, p. 19943.
[35]
Hon Judith Tizard, House of Representatives Hansard (NZ), 12 April
2005, p. 19973.
[36]
Mr Trevor Garrett, New Zealand Charities Commission, Committee Hansard,
28 June, p. 27.
[37]
Ms Joanne Edwardes, Charity Commission of England and Wales, Committee
Hansard, 28 June 2010, p. 60.
[38]
Mr David Locke, Charity Commission of England and Wales, Committee
Hansard, 28 June, p. 66.
[39]
Mr Michael Willcock, Treasury, Committee Hansard, 29 June 2010, p.
35.
[40]
As detailed in the 2008 Report scholarly literature often divides society
into four sectors: Business (First Sector); Government (Second Sector);
Not-For-Profit, non-government, voluntary, intermediary (Third Sector); and
Family (Fourth Sector). The Third Sector in Australia sits alongside the
government and private sectors. Third Sector organisations may receive
government funding to provide public services, but they are not part of
government. Similarly, Third Sector organisations may charge for business
services, but are not part of the business sector because their primary aim is
not to generate profits for their owners. Broadly, Third Sector organisations
comprise charities, churches and religious organisations; sporting organisations
and clubs; advocacy groups; community organisations; cooperatives; trade
unions; trade and professional associations; chambers of commerce; welfare
organisations; and service providers, which can be divided into three clear
classes of organisations (i) Mutuals, (ii) Social Enterprises and (iii) Not-For-Profits.
Source: Senate Economics Committee, Disclosure regimes for charities and
not–for–profit organisations, 2008, p. 11.
[41]
Father Brian Lucas, General Secretary, Australian Catholic Bishops Conference,
Committee Hansard, 29 June 2010, p. 25.
Additional Comments by Senator Xenophon
[1] Mr Michael
Hardy – Australian Taxation Office, Proof Committee Hansard – Tuesday 29
June 2010, p. 37.
[2] Mr Michael
Hardy – Australian Taxation Office, Proof Committee Hansard – Tuesday 29
June 2010, p. 40.
[3] Mr James
Anderson, Proof Committee Hansard – Monday 28 June 2010, p. 11.
[4] Mrs Carmel
Underwood, Proof Committee Hansard – Monday 28 June 2010, p. 12.
[5] Ms Jannette
Vonthehoff, Proof Committee Hansard – Monday 28 June 2010, p. 13.