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Democrats oppose new FBT impost on charities [Fringe Benefits Tax]

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Senator Meg Lees Parliamentary Leader and Senator for South Australia Australian Democrats spokesperson for Treasury

Senator John Woodley Senator for Queensland Australian Democrats


Democrats oppose new FBT impost on charities

The Democrats would not support the Federal Government's plan to impose an additional Fringe Benefits Tax (FBT) burden on charities and the not-for-profit sector, Democrats’ Leader, Senator Meg Lees announced today.

Senator Lees has written to the Treasurer to confirm Democrat opposition to the proposed $17,000 cap on FBT tax exemptions for charities.

"The charity sector cannot accommodate this impost without reducing services and that is simply not acceptable to the Democrats," Senator Lees said.

"Charities need time to focus on implementation of the new tax system without facing additional costs caused by increased FBT."

The Democrats have long been concerned at the lack of definition of what constitutes a charity and how they should be taxed.

"We have asked the government to establish a two-stage inquiry into charities, looking first at the definition of charities and then at their tax treatment," Senator Lees said.

"Armed with this knowledge, the Democrats would be able to review what tax concessions are appropriate for the not-for-profit sector.

Senator Lees called on the ALP to oppose increased FBT on charities.

"At the last election, Labor said they would support the Government's plan," she said.

"Now that the full extent of the impost on charities is clear, I hope Labor will join us in ‘rolling back’ this new impost."

Senator John Woodley, who liaised between the Democrats and the charities on tax, said today’s FBT announcement represented around $200 million in revenue to charities and not-for-profit groups this financial year.

"As a former Uniting Church employee I understand the difficulties charities face. I’m pleased my party is taking a strong stance in softening the tax burden for the sector."

"The Democrats have kept our pledge to keep the government to its promise that charities will not be disadvantaged by tax reform," he said.

Senator Lees said the Democrats supported the FBT exemption for remote area housing.

"We ask the government to consider broadening the FBT exemption for remote areas to help not-for-profit organisations attract professionals," said Senator Lees.

Meantime, the Democrats also stated that they would continue discussions with the government on the proposed cap on FBT exemptions for public hospitals.

"We will not agree to any cap on FBT exemptions unless hospitals are compensated fully for this revenue loss. Public hospitals are already critically under-resourced and cannot afford to lose any additional funding," said Senator Lees.

"Unless the government can deliver a compensation package that goes directly to the hospitals as

replacement funding for salaries affected by the FBT changes, the Democrats will not agree to the proposed cap."

Senator Lees thanked her colleague, Senator Woodley, for his detailed work with the charity sector on this and other important taxation issues.

Senator Lees and Senator Woodley said today’s announcement was consistent with the Democrats’ pledge to work toward a better, fairer tax system for all Australians.


Representatives from the not-for-profit sector have provided the following endorsements of the Democrats’ position on FBT and charities:

"We strongly support a full inquiry into the charities sector and the taxation system. That is the proper course for the Government on FBT and all taxation issues." Mike Myers Manager of Queensland Community Housing Coalition Community Housing Federation of Australia's representative

on the Charities Consultative Committee

"QCOSS welcomes the Australian Democrats taking a stand on the issue of changes to Fringe Benefits exemptions for charities. QCOSS supports the Democrats’ call for an inquiry into the tax treatment of charities as a way of finding a balanced solution to these issues." Shirley Watters

Director of Queensland Council of Social Service Inc

"It is critical for every corner of the Australian community that parliament makes an informed decision. Currently, it is not well informed. Therefore, we see great merit in an inquiry into FBT concessions for charities." Mark Henley

Chief Executive Officer

The Paraplegic and Quadriplegic Association of Queensland Inc

"YANQ welcomes the Democrats’ opposition to the $17,000 cap on FBT exemption. We support the need for a wide ranging inquiry into taxation including how the youth sector is funded." Bernice Smith Director of Youth Affairs Network of Queensland