Senator CHERRY (2:25 PM) —My question is addressed to the Minister for Revenue. On 22 July the Treasurer released an exposure draft of the Charities Bill defining `charity' for all Commonwealth legislation—a bill which is of serious concern to the charitable sector, given this government's form in cold-shouldering charities which disagree with it. Can the minister confirm whether a second bill containing so-called consequential amendments has been or is being drafted? If so, can the minister assure the Senate that any such bill will also be released for public consultation with charities under the auspices of the Board of Taxation, alongside the Charities Bill?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you, Senator Cherry, for the question. The consequential amendments to the Charities Bill have not been released, but of course they do deal with a number of technical matters—the technical interaction of the exposure draft and the current law—so there is no substantive policy contained in the consequential bill, as you would appreciate. Senator Cherry's question is premised on a completely false statement; namely, that this government has cold-shouldered charities. That is an extraordinary notion when what has in fact been released is an exposure draft of the Charities Bill 2003. The exposure draft is in the public domain for the very purpose of public consultation—for the board to conduct consultations—and it is certainly not in any way a rebuff to charities.

In fact, we announced the policy in August 2002, which is 11 months ago, and draft legislation has been released recently. The draft provides—as, indeed, is the current situation—that a charity must be not-for-profit, have a dominant purpose or purposes that are charitable and be for the public benefit. The definition follows the definition that has been in operation, in effect, for more than 400 years of common-law precedent. The draft legislation only widens the definition of `charity' to include not-for-profit child care available to the public, self-help bodies that have open and non-discriminatory membership, and closed or contemplative religious orders that offer prayerful intervention for the public.

I hope that there will be some people offering prayerful intervention for the Democrats, because nothing could be further from the truth but that this government not only understands the needs of charities but also has, in the move to the new tax system, specifically adjusted the tax law so that charities can effectively operate. In fact, the definitions that are now in the exposure draft simply take up what has always been the case. So recent criticism—I think Senator Cherry made some criticisms of the exposure draft—really has no foundation when you look at the draft and the words. The most important point of all is that this is, as it says, an exposure draft. The Board of Taxation will now have an opportunity—as will stakeholders, members of the public and anyone interested—to have some input into its final shape.

Senator CHERRY —Mr President, I rise to ask a supplementary question. The minister mentioned in her answer the response of the government to the Charities Definition Inquiry report made 11 months ago. We have been very contemplative about that response as well. Two years ago the report described the key charitable definition of `public benevolent institution' as clearly out of date, and recommended a broader category of benevolent charity to extend concessions to charities with the dominant purpose of benefiting, directly or indirectly, those whose disadvantage prevents them from meeting their needs. When will the government respond to that recommendation of the report, made over two years ago, that the definition of `benevolent charity' be updated after 80 years? Will that be in the consequential amendments bill?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —As I have said, the consequential amendments bill deals with technical matters, but the exposure draft that is currently on the table codifies the common law definition of charities and reinforces the dominant purpose—that a charity must be not for profit, must have a dominant purpose or purposes that are charitable and must be for the public benefit. They are pretty time-honoured concepts. They have endured for over 400 years. They are now in an exposure draft and they are going to the Board of Taxation for consultation. It will be a matter obviously that will need to take final shape when all of the consultations have had an opportunity to be considered.