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Wednesday, 9 February 2005
Page: 153

Senator Greig asked the Minister for Revenue and Assistant Treasurer, upon notice, on 17 November 2004:

With reference to a recent application by Open Doors Youth Service Inc. to the Australian Taxation Office for public benevolent institution and deductible gift recipient status, which was rejected on the grounds that the organisation, a support service for lesbian, gay, bisexual and transgender young people, did not satisfy the requirements of a benevolent institution:

(1)   Does the Minister consider that the conditions or misfortunes Open Doors is seeking to relieve, that is, suffering, distress, destitution, homelessness, suicide risk, disadvantage, discrimination, and isolation, which it claims occur as a direct result of homophobia, are such as to arouse pity or compassion in the community.

(2)   What criteria does the Australian Taxation Office use to determine that a condition or misfortune arouses pity or compassion in the community.

(3)   Does the Minister consider the experience of discrimination and homophobia experienced by many young lesbian, gay, bisexual and transgender people to be part of the emotional stress and pain encountered in ordinary human experience.

(4)   What balance between direct benevolent relief and other purposes and activities must an organisation achieve to satisfy the test that it is predominantly for benevolent relief.

(5)   Given that the Australian Taxation Office has advised that ‘one may readily accept that an institution with an independent object of fostering the cultural values of a particular group would not be a public benevolent institution’: (a) what constitutes an ‘independent object’; and (b) in instances where an organisation’s main objectives relate to benevolent relief, but contain additional objectives that refer to fostering of cultural values, how does the Australian Taxation Office determine those other objectives to be of such significant weight as to indicate that the dominant purpose of the organisation is not to provide benevolent relief.

(6)   Does the Minister acknowledge that in certain circumstances, an individual’s experience of poverty, sickness, suffering, distress, misfortune, disability or helplessness may be directly relieved through the provision of community education or services that foster values and, if so, that such activity would then constitute benevolent relief.

Senator Coonan (Minister for Communications, Information Technology and the Arts) —As this question deals with matters that are the responsibility of the Australian Taxation Office, I have asked the Commissioner for advice. The advice in relation to the honourable senator’s question is as follows:

(1)   to (6) The secrecy provisions of the tax laws prevent the disclosure of information relating to the taxation affairs of a particular organisation to a third party. Any organisation that is dissatisfied with a decision made by the Tax Office not to endorse it as a public benevolent institution (PBI) is entitled to have the decision reviewed.  On 4 June 2003 the Tax Office issued public ruling TR 2003/5 which discusses public benevolent institutions. The ruling states that a public benevolent institution (PBI) is a non-profit institution organised for the direct relief of such poverty, sickness, suffering, distress, misfortune, disability, destitution, or helplessness as arouses compassion in the community. The ruling also states that it is not sufficient that an organisation’s operations be directed towards categories of people who could be in need of relief. Rather it must be for the relief of suffering and distress experienced by those people. The ruling goes on to say that the organisation must be at least predominantly for the direct relief of such poverty, sickness, suffering, distress, misfortune, disability, destitution, or helplessness.

TR 2003/5 is based on a collection of current judicial knowledge that has developed from many court decisions over a very considerable time frame. When deciding whether an organisation is predominantly for the provision of benevolent relief it is a matter of fact and degree. It is an objective question which will involve the weighing of all relevant factors and both the organisation’s constitution and its day-to-day activities are relevant.

As it is the character and purpose of the organisation that must be ascertained, a solely quantitative measurement would be inadequate. If an organisation has two or more objectives that are roughly equal and only one involves the provision of benevolent relief, then the organisation could not be accepted as a public benevolent institution.