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Treasurer responds to concerns about possible changes to tax status for charities.

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Wednesday 30 July 2003

Treasurer responds to concerns about possible changes to tax status for charities


LINDA MOTTRAM: The Federal Treasurer, Peter Costello, has called i n to respond to claims by the Australian Democrats on the possible changes to laws on the tax status of charities. 


Treasurer, why is it not muzzling, as your critics have said, to link tax status of charities with effectively supporting Government policy? 


PETER COSTELLO: Because that's not what's done. 


LINDA MOTTRAM: So can you explain to us how you, what you propose to do? 


PETER COSTELLO: Well the, the legislation has been put out as a draft for discussion and it's clear in the legislation that to be a charity you have to do charitable works. 


It doesn't say that you're banned from making comment, of course you're entitled to make comment, as you are under the current law. 


What it says that if you are formed for the purpose of being a lobby group, that is if you're lobbying is not ancillary to charitable work, you're not a charity, and that is the current law. 


You know, I'm just amazed. Anybody who has looked at the legislation would see that. 


LINDA MOTTRAM: How fine a line is it though? I mean the concern from charity groups, some charity groups at least, and from the Democrats seems to be as much that it's just too fine a line to draw. 


PETER COSTELLO: No, it's the current law. The current law requires this. 


LINDA MOTTRAM: So you're not proposing to change that? 


PETER COSTELLO: No we are not proposing to change it. The current law, which is embedded in the cases, we were asked to produce a statutory formulation of the current law and we replicate the current law on this point. 


A lobby group at the moment, you know at the moment a lobby group does not get gift-deductible status. It doesn't get it. A charity does. 


Now to be a charity you actually have to help the poor or the sick or engage in education and it replicates the current law and in the course of helping the poor or the sick or engaging in education you want to make comment or criticise Government policy, you are still a charity as long as you are helping the poor or the sick. 


It's only if you don't have any primary purpose and you are a lobby group, you're not a gift deductible recipient. That's the current law. 


LINDA MOTTRAM: So are you saying to charities that there will be absolutely no change in the way that they are currently able to operate, in terms of… ? 


PETER COSTELLO: No change whatsoever for any charity that is a charity, that is, that helps the poor or the sick or engages in education. 


LINDA MOTTRAM: Animal welfare groups? Environment groups? 


PETER COSTELLO: …this is actually designed to replicate the current law. That's why it's been drawn up and that's why it's been put up for discussion. 


Frankly, you know, you would have to be mischievous to try and allege to the contrary. 


The legislation is out there so people can see this, and I just want to say to all of the genuine charity groups, this is replicating what was the old common law, it's been put out there for discussion. 


The current law is if you're a lobby group, you're not a charity. A charity is someone who engages in helping the poor or the sick and in the course of that they are entitled to criticise the Government as they currently are and they would be if this statute were passed. 


LINDA MOTTRAM: So why is it that you think there is this sensitivity? Is it just that you've written something down and there's reaction to it? I mean is there… 


PETER COSTELLO: Some lobby groups want to get a status they don't currently have. There would be some lobby groups that are not charities that would like to get gift deductible status, something they don't currently have and they will be arguing their case to extend the law so that lobby groups which aren't charities, which don't help the poor or the sick, suddenly get tax deductible status. 


LINDA MOTTRAM: So are you saying that the situation will continue to apply; that a group like the Catholic Health and Welfare Organisation, which has criticised what you have put out, that they would not see any change in their specific status? 


PETER COSTELLO: Absolutely. As long as the Catholic Health and Welfare Commission is engaged in providing health services which, as I understand, it is, it's a charity, absolutely. 


LINDA MOTTRAM: And animal welfare groups? Environment groups? All of those who currently get that tax free status? 


PETER COSTELLO: Environment groups are different. They're not charities. 


LINDA MOTTRAM: But some do have tax deductible status, don't they? 


PETER COSTELLO: That's because they're named in the statute. They're not covered by this. This is to do with charities. This is to do with charities which are directed towards helping the poor or the sick or engaging with education. 


LINDA MOTTRAM: Okay. The Federal Treasurer Peter Costello. Thanks for your time. 


PETER COSTELLO: Thank you very much.