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Tuesday, 30 October 2012
Page: 8390


Senator MASON (Queensland) (13:30): This is an important debate about a very important aspect of Australian civil society—the voluntary sector. It contributes so much in addition to, or perhaps even instead of, government in so many different areas in dealing with the challenges of health, education and underprivilege. Indeed, it often does a better job than government.

As we debate these bills and argue about the levels of regulation and compliance in the charities and not-for-profits sector, and the best ways to balance accountability and, of course, flexibility, one issue remains largely unaddressed, and it has not really been addressed in the debate thus far today. It is a problem that has been with us for some years now, and I remember raising it in this chamber some eight years ago, but little has changed since then. If anything, the problem is even more pronounced today. It is simply this: increasingly, some charities are moving into political advocacy, not just in addition to their other work but, in many cases, almost as their sole work. We live in a democracy and everyone is entitled to voice their opinions, advocate for certain positions and lobby for any outcomes they desire. That is all fine; none of us would object to that. This right applies to individuals as well as groups of people, businesses and, indeed, charities and not-for-profits—of course it does. But the right to free political expression does not entail an ancillary right to have that free political expression subsidised by the taxpayers. That is the issue. This, however, is what some charities now expect.

Charities and not-for-profits enjoy numerous tax benefits. As you know, Mr Acting Deputy President, they are exempted from income tax, they can get refunds on imputation credits, they can reduce their fringe benefits tax and they can obtain all sorts of various GST concessions. They are entitled to all that. Last but not least, the gifts and donations they receive from the public tend to be tax deductible. They are all benefits the charities and not-for-profits receive. This has been a longstanding practice which recognises the public benefit—the public good—that derives from the work of charities, which we all accept. In return for these benefits, we as a society and a government agree that we should make life and work easier for charities so they can better compete for staff with the public and private sectors as well as help them raise funds to finance their work. In a sense, that is the give and the take of what they do.

This has been a pretty straightforward proposition for hundreds of years now—indeed, since Elizabethan times—generating a strong consensus and little debate, because the public benefit from the work of charities was pretty clear. People could see it everywhere: education charities would provide education, health charities would provide medical care, social charities would care for those in need, and, more recently, environmental charities would roll up their sleeves and plant trees, clean up pollution or shelter animals. That is what they would do.

But the last few decades have seen the emergence of a new phenomenon: some charities and some not-for-profits are now simply involved in political advocacy and campaigning. No longer would community donations go to help charities do something; they would go to help charities lobby the government to do something. There is a big difference. It is a sort of philanthropy by proxy or compulsory philanthropy. It is no longer really philanthropy because when the government does something we all pay for it whether we want it or not.

This is of course always a matter of degree—I accept that. Many, if not most, charities and not-for-profits from time to time find themselves trying to influence public debate. That happens all the time and I accept that. The law has always recognised this as an entirely legitimate activity if carried in an ancillary way to the main charitable purpose. So the Salvation Army or St Vincent de Paul may talk about poverty, but their main purpose is providing for the poor. They are quite able, of course, to lobby government in certain areas and in certain sectors. There has never been a problem with that. The problem is when influencing public debate becomes a dominant, or even the sole, purpose for the charity's existence. That is when the problem emerges. For such charities, their work becomes less tangible. It is no longer underprivileged kids getting a better education or the homeless getting a roof over their heads or a koala habitat being protected and preserved—it is about affecting the direction of government policy and government spending, or even affecting those who are elected to government.

Such charities are no longer charities per se; let's face it: they are in effect not-for-profit lobbying and PR outfits, enjoying a sizeable subsidy from the taxpayers and the public purse. That is what they become. The question is: should they? If the aim is to effect policy or political change, shouldn't the charity workers join political parties, which have their own and relatively low tax deductible thresholds? Or, conversely, if political lobbying or campaigning should have tax benefits for charities, then why not for everyone else as well? If it is okay for koalas and the homeless, why isn't it okay for sugar farmers or small business men?

An even more ambiguous case than merely lobbying is campaigning at election time. This seems to be particularly common in my home state of Queensland, where charities and other groups enjoying favourable tax status, such as the Wilderness Society, have on many occasions in recent years produced and distributed election material, including how-to-vote cards, aiming to boost the Australian Greens or the Labor Party or at least diminish the coalition vote. That is what they have done with the tax benefits that they receive. This is not what a majority of people imagine charities do or should be doing. The courts and the bureaucracies, however, have been quite liberal in reinterpreting the definition of charitable purpose, as well as expanding the scope of other activities that charities can engage in without losing those particular tax benefits. We might ask, however, is it good public policy? We might want to ask ourselves that question. Should the taxpayers really be subsidising political lobbying and political campaigning? What makes charities so special that they should enjoy this privilege and benefit, which is not available to anyone else in our society except, to some extent, to political parties? Are some charities in reality merely associated entities of political parties? Are not the tax benefits granted to charities in recognition of the value of services and actual tangible support delivered to those actually in need? Should then these tax benefits be available to self-proclaimed charities which do not actually do anything directly to help, but merely write press releases and lobby politicians? Is that appropriate? We need these sorts of questions debated, and sooner rather than later actually answered—one day soon.

As any questioning of the status quo invariably attracts a howl of indignation about the evil Liberals trying to stifle debate and silence dissent, let me repeat that the debate is not whether charities have the right to express their opinion or to lobby. Yes, they do. I make that very clear. Of course they do. The debate is whether some of them should enjoy a special tax status, not available to anyone else, if their supposedly charitable work consists mainly in expressing opinion or lobbying. That is the question.

The coalition opposes the current bill because it ends up burying civil society in red tape. I do hope, however, that future governments will find time to address the problem of politicised charities. Way back in 2004 I made a few comments and they are still relevant today. I said that the taxpayers of Australia are owed some answers regarding the activities of organisations such as the Wilderness Society. But also, just as importantly, we owe it to other charities and groups enjoying tax deductible status, who quietly go about their work of helping others without involving themselves in the rough and tumble of politics, to ensure that charities, which as a general rule do so much good in our society, are not tarnished in the public's eye by the misdeeds of a few political wolves in charity sheep's clothing. If the coalition wins the next election, I do hope we address this issue, which gnaws at the credibility and public acceptance of the status and benefits which we bestow very willingly on our charities.