Senator WEBBER (6:09 PM) —by leave—I move:

I rise to make some comments in relation to the report on the provision of the Taxation Laws Amendment Bill (No. 7) 2003 presented today by the Economics Legislation Committee. As a cosignatory to the minority report, I rise to point out that there is a significant area of difference among members of the committee. That area of difference relates to schedule 3 of the bill. Schedule 3 refers to gifts and covenants. The minority report recommends that the Senate delete that part of schedule 3 that provides for the naming of deductible gift recipients, or DGRs, by regulation.

The background to this recommendation goes to the government's decision to codify some 400 years of common law on the definition of a charity. As we all know, there have been numerous public debates and comments about the manner in which the government proposes to treat charities. Many charities have expressed a concern that this government, or any future government, could use legislative change to restrict or deny charities the right to participate in public debate. Put simply, there is a concern that this is a codification of common law to muzzle charities. One has to ask the question: why does the government need to codify 400 years of common law? Until 2003 there had been a collective understanding of what a charity was, and now we have to codify it—or at least that is the view of the government.

The reason that there is a minority report from the Economics Legislation Committee is that schedule 3 of the Taxation Laws Amendment Bill (No. 7) deals with a related matter. At the present time there are two processes by which an organisation receives DGR status. The first method is for the organisation to fall under one of the general categories set out in the Income Tax Assessment Act 1997. The organisation applies to the Commissioner of Taxation, who assesses the application. If the application is successful then the organisation is endorsed as a deductible gift recipient. The committee was told during its hearings that there are currently some 18,000 organisations that have been endorsed by the commissioner.

The other method by which an organisation can receive DGR status is for it to be included by name in the legislation. We were told that there are currently some 100 organisations specifically named in the legislation. This meant that the legislation was amended on each occasion that an organisation or organisations applied to government to be included. The government is now proposing to do this by regulation rather than by amendment of the legislation. The stated reason for this is that the government believes that this process will be more effective and efficient. As outlined at the committee's public hearings, the current process is that an organisation writes to the government requesting inclusion in the legislation. The government considers the application, generally seeks the views of the Commissioner of Taxation and then seeks to amend the legislation. From what we were led to believe, the new process would essentially be the same except that the government would now make a new regulation rather than seek to amend the legislation.

Of course in all this the government maintains that it will behave in an unchanged manner. Currently there can be conditions attached to an organisation being named in the act—typically those that relate to time durations. The concern about this change is that the government could, through the regulation process, place more stringent requirements on an organisation seeking status as a deductible gift recipient. The difference from the current situation would be that, in order to reject the conditions placed on the organisation, the Senate would have to disallow the entire regulation. Currently the government can attempt to put stringent conditions on an organisation seeking that status and the Senate can simply amend that condition. But if we go down the path proposed by the government in Taxation Laws Amendment Bill (No. 7) then the Senate would give up the ability to scrutinise, review and amend any new conditions. The only option left open to the Senate would be to reject the entire regulation, and therefore the organisation—or any other organisations listed in that regulation—would be denied access to deductible gift recipient status.

Of course the government would have us believe that it would never, ever do this. We are told that this government welcomes open and frank discussion and disagreement with its policies and programs. Any and all organisations can say what they like about the government and this government would never, ever do anything about it. Never, ever would this government, or any future government, go down that path. Never, ever would this government seek to limit the rights of an organisation to speak out on any issue. No processes would seek to limit or restrict research or advocacy projects. In my view, if you believe that you will believe almost anything.

It is too easy to say that regulation amendment to legislation is just about effectiveness and efficiency. Has the government actually demonstrated that the current process is inefficient or ineffective? The Senate has demonstrated time and time again that non-controversial legislation is dealt with efficiently and effectively. The Senate has also demonstrated that when any government attempts to impose stringent and unreasonable regulation or legislation that attempt will be subject to rigorous review. We must think carefully when we decide on this legislation when it comes before the Senate.

The minority report is about ensuring that those parts of this bill that are about diluting the power of the Senate are not agreed to. Currently the safeguards are there. No government could pretend that it would be in a position to put unreasonable conditions on an organisation seeking DGR. The Senate could, and would, amend those conditions. Schedule 3 removes that safeguard. Let us not fall prey to the efficiency and effectiveness arguments. Let us collectively work to ensure that the legislative safeguards that currently exist are maintained. Let us not hand more power to the executive. I commend the minority report to the Senate.

Question agreed to.