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Tuesday, 18 June 2013
Page: 6108


Mr TUDGE (Aston) (17:03): Perhaps the key difference between the coalition and the Labor Party is our view on the size and the role of government. The Labor Party, with its socialist roots, has always believed in big government. It believes that the government should be at the centre of economic activity, as Kevin Rudd has articulated, and that it should be the answer to almost every social ill in the nation. If there is a problem then government is the solution, according to the Labor Party. This view leads to a government which grows over time and reaches into almost every aspect of our society. On the other hand, the coalition believe in small government, but big individuals and big communities. Our view is that there is a role for government, but that it should be minimal in order to allow maximum freedom for individuals, for families and for communities. We firmly believe that a society is at its best when there is a strong, civic engagement from people acting voluntarily for the betterment of their community. That is the context in which we debate this bill: what the central role of government is and what the role of government is vis-a-vis the community sector. As I said, we firmly believe in fostering volunteerism and a strong civil society.

The name of the bill that we are debating today suggests that it is relatively inconsequential. It is called the Charities (Consequential Amendments and Transitional Provisions) Bill 2013, and I would imagine that this bill will not receive much media attention or publicity—there is virtually nobody on the Labor side of the House who is speaking on this bill or discussing it—and that there will not be much debate after the members of the coalition have spoken in relation to it. But this bill is actually immensely important and deserves considerable scrutiny, because it will impact hundreds of organisations, it will potentially have a significant impact on taxpayers and it will overturn 400 years of history.

For those three reasons, it is an immensely important bill that does deserve considerable scrutiny and I believe it deserves to be rejected. I am encouraged that so many people—at least in the coalition—are taking this bill very seriously and are debating it, analysing it and working out what it means for the Australian community. I must say that I am disappointed that the government has put this through without much debate or consultation, and that there is so little interest amongst the Labor members on the other side of the chamber to even speak on this bill or to put forward its particular case.

The bill seeks to introduce a definition of 'charity' and 'charitable purpose'. This definition would apply from 1 January next year and would apply across all Commonwealth legislation. Up until this point the definition of 'charity' has not previously been legislated in statute. Rather it has been based on 400 years of common law. It developed and evolved in a methodical manner through the common law system. The common law system over these 400 years has settled on a pretty clear definition of what a charity is. A charitable purpose is commonly characterised to fall within one of four categories: the relief of poverty, the advancement of education, the advancement of religion and for other purposes beneficial for the community. These definitions have served us well. Those four definitions were most clearly articulated in a British House of Lords case—the Commissioners for Special Purposes of Income Tax v Pemsel in 1891—and that has served us very well.

My key critique of this bill is that there has been no rationale as to where the problems with the current definition lie. My view is that if something is not broke we should not try to fix it. It is incumbent upon those who are putting forward a change to prove where the problem lies and to articulate how that proposal will fix that problem. This government have done no such thing. They have not come in here and outlined where the problems currently lie in relation to that 400-year-old definition of charity. They have not then gone and said, 'Due to those problems, we are going to introduce these measures which will fix those problems.' Far from it—they have introduced this relatively out-of-the-blue. They have had almost no speakers articulate the case for it and they will no doubt guillotine this bill through the parliament, as they have guillotined all the other bills over the last couple of weeks in the dying days of this parliament.

Why does this matter? The definition matters because if an organisation is characterised as a charity they get great privileges. Those privileges are largely financial ones. It means they do not have to pay income tax. It means they typically will not have to pay GST. Usually it leads to them having charitable status from the point of view of being able to receive donations and those donations being tax deductible. So it confers enormous financial privileges to be deemed a charity. At its essence, we as a parliament representing the people need to take great care in determining what actually should be the definition of organisations that should have those benefits conferred upon them so they will be getting, in essence, financial assistance to do their work.

As I said, that 400-year-old definition appears to have worked. There has been no outcry for it to change. There have been no great movements of people knocking on our doors to change that 400-year-old definition. It has worked. Those individual entities that have not been able to get charitable status, and hence have been unable to receive donations and be able to make donations tax deductible for donors, have been able to make a submission to the government and to the parliament to have their particular organisation listed for deductible gift status, DGR status, which then enables them to receive donations that are tax deductible. It is something which many organisations obviously seek. So the system works at the moment and I believe there is no reason to change it.

My second concern in relation to this bill is that it changes the definition from four categories into almost eight to 10 categories of charitable purpose. This includes advancing health, advancing culture, promoting or protecting human rights and advancing the security or safety of Australia or the Australian people. It includes advancing the natural environments and the catch-all category of promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country and furtherance for protection of one or more of the above purposes. We have gone from having a relatively narrow defined definition of charity which we can all accept to one outlined here which is enormously broad.

My concern with this very broad definition is not necessarily the financial aspect of it to the Commonwealth but rather because I think it will lead to the breaching of one of those core principles over which we have had bipartisan agreement for a long time and which there has been no outcry to change. That is the broad principle: that political advocacy should not attract public funding and should not attract any financial or public benefits for it. That has been the broad principle which there has been agreement on across this parliament for a long time. We have not allowed that in the past.

In fact, this bill specifically says that political parties will not receive charitable status, but it allows many other organisations to receive charitable status through these provisions which are not charities and really are political organisations. I think particularly many of the green groups that we know that can be aggressively political will seek charitable status under this new definition, should this bill pass this parliament. I believe that many of those green groups do not act in the interests of our nation; therefore, I do not believe that the Australian people would think that it is right that some of their taxes should go towards subsidising green activities. I raise a particular example of the Wilderness Society. It is an organisation which is known very well and which has run an enormous campaign to lock up Cape York Peninsula against the wishes of the traditional owners. And many of those traditional owners and many of the Cape York leaders, led by Noel Pearson, want to be able to have sensible development in their communities so that they can be beneficiaries—they can grow fruit, they can raise cattle, they can have other businesses and therefore help sustain their communities—and have economic developments in their area.

The Wilderness Society ran a huge campaign to try to make that impossible. They were so successful that they managed to convince the previous Bligh government to pass a series of laws—the wild rivers legislation—which had the practical impact that no businesses were able to start up throughout most of Cape York Peninsula. It is fine for the Wilderness Society to run that sort of political activity—we live in a free society and we allow such activities to occur—but my argument here today is that such an organisation should not receive any public support for doing such an activity, because I do not believe that their activity supports the overall benefit of the nation. In fact, it was contrary to the interests of Indigenous people who have been looking after that land for thousands upon thousands of years.

That is just one example, but it goes to the key principle that I have been articulating: that Australian taxpayers' funds should not be directed to organisations for political activity. I believe if we pass this legislation we will have many organisations who otherwise may not fit the present common law charitable definition that I outlined fitting under the definition of 'advancing culture', 'advancing the natural environment' or 'promoting or protecting human rights' and therefore be, in essence, recipients of special tax treatment.

This bill is not a good bill. We have not had a case for a change made by this government. It has not been made in this parliament. I know that many in the charitable sector are concerned about this bill. They are concerned that the charities commission that will oversee the operation of this bill, that will make decisions in relation to who is given charitable status, may not operate as well as the government says it will operate. They are concerned that it will add red tape to its activities, which will just cost those organisations money rather than that money going towards doing the good work that they do in the communities.

Our existing charities—the Salvation Armies of the world, the St Vincent de Pauls of the worlds, the Red Crosses of the world—do fantastic work in our community. We want to support those organisations. We want to support the volunteering in our community, but we do not think that we should be completely changing the definition of charity and, through that process, enabling a lot of political activity to, in essence, be deemed to be charitable activity, which I do not think it is.