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 19^th 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.