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Wednesday, 16 March 2005
Page: 165


Senator CHERRY (7:38 PM) —I rise tonight to speak on the allocation of tax concessions to charities and in particular the government’s continuing efforts to restrict access to tax concessions for charities to those organisations which fit within its broad category of non-political organisations. I refer to a letter that the Minister for the Environment and Heritage, Senator the Hon. Ian Campbell, sent out this month to environment organisations across Australia. He warned every environment organisation:

Foremost, each organisation’s principal purpose must be the protection and enhancement of the natural environment (or a significant aspect of it); or the provision of information or education, or the carrying on of research, about the natural environment or a significant aspect of it. It is mandatory that any tax-deductible donations be spent only in support of this purpose. That is, the funds should only be expended on the conservation of the natural environment and not for any other purpose, such as political activity.

This is a view which the Treasurer has put on many occasions—and I have crossed swords with him on many occasions—but it is one which increasingly is out of step with the understanding in the law, the community and the rest of the world as to what is a charity and what is legitimate political and non-political activity. The June 2001 report of the charities definition inquiry, established by the Treasurer at the request of the Democrats, recommended that there be a broader approach taken to what sort of advocacy is regarded as charitable and what is not. The report noted:

... advocating on behalf of those the charity seeks to assist, or lobbying for changes in law or policy that have direct effects on the charity’s dominant purpose, are consistent with furthering a charity’s dominant purpose. We therefore recommend that such purposes should not deny charitable status provided they do not promote a political party or a candidate for political office.

It is noteworthy that the UK report into charities and the not-for-profit sector in 2002 notes that the restrictions on the advocacy activities or role of charities are ‘anomalous’ and that in many European countries, for example, France, Netherlands and Sweden, there are no comparable restrictions on not-for-profit organisations. Moreover, charities speak for large sections of the community and often for those who do not have a voice of their own. Charities also provide an important counterweight to government and business interests.

The report gave three key reasons why advocacy and campaigning should be encouraged and not restricted. It pointed to the strong links in local communities which mean that charities are particularly well placed to monitor, evaluate and comment on policies as they are implemented, the fact that charities still enjoy higher levels of public trust and confidence than politicians or established political institutions and are therefore well placed to offer alternative ways of engaging with the public policy debate and the processes of democracy, and the diversity of the causes represented by charities mean that they are able to give voice to a far wider range of political perspectives, including those of minority groups or interests, than might otherwise be heard by government.

All of this continues to be ignored by the Howard government in terms of trying to muzzle charities and ensure that organisations, whether they be environment organisations or other organisations, are restricted to a 16th or 17th century view of what a charity is as defined by the Statute of Elizabeth. Of course, the courts are increasingly reluctant to go down this line. I note in particular, given that the letter from Senator Ian Campbell was in relation to environment organisations, that the Victorian Civil and Administrative Tribunal in 2002 specifically considered whether the Australian Conservation Foundation’s advocacy activities subordinated its charitable purposes and it held that they did not. In so holding, the tribunal observed:

... people engaged in conservation may be said to be engaged in something that is in some sense political ... it [is] obvious that some parts of the national heritage can only be conserved with the active help of the executive and the Parliament.

It went on to say:

... for a variety of reasons many charities nowadays will not be able to avoid conduct that may be said to be political.

There is no question of that. Churches, welfare organisations, environment organisations and organisations campaigning for improved health funding all need to engage in advocacy. This false dichotomy that the government is now establishing is making it harder and harder for them to do their job. It is noteworthy that Lord Wilberforce in the 1981 English case of McGovern v Attorney-General noted:

... the mere fact that trustees may be at liberty to employ political means in furthering the non-political purposes of a trust does not necessarily render it non-charitable.

He noted—and it is noted in the courts in many places—that there was this continuing change in the role of charities. I note also that the New South Wales Supreme Court in 1997 in Public Trustee v Attorney General said:

The cases on charities also involve some confusion between means and ends when it comes to their persuasive activities. There is a range of activity from direct lobbying of the government to education of the public on particular issues, in the interests of contributing to a climate conducive to political change. The line between an object directed at legitimate educative activity compared to illegitimate political agitation is a blurred one, involving at the margin matters of tone and style.

In that case the court went on to say that ultimately you have to have regard to the principal purpose of the organisation.

That was the approach recommended by the charities definition inquiry in 2001. I believe that if it were to come before the Federal Court, even at this point in time, that would be the approach adopted by the court today because that is the approach emerging in the Victorian courts and the New South Wales courts and in the courts overseas. That is why I find it disturbing and concerning that the minister for the environment would write such a letter to environment organisations—one which goes much further than the requirements of the law in terms of stating what they can and cannot spend their money on. It is as if the government is determined to say to environment organisations, ‘You must self-censor; you must totally get out of the mind-set of trying to change policy, because changing policy is somehow not charitable.’ Yet it is quite clear when you look at the history of the evolution of charitable organisations—particularly in the past 20 years to 30 years—and the developments in Europe, the US and the UK and the developments in the courts here that it is increasingly recognised that charities can and should advocate on behalf of their constituent members for policy change which furthers their charitable purpose. That must be the test: does it further their charitable purpose? If it does it is a valid activity. If it does not, then it is not a valid activity.

Fundamentally, the committee of inquiry on the definition of charities recognised that the endorsement of political candidates certainly falls short of the test of a charitable purpose. I support that view because it is important that if we are going to provide tax concessions to charities we do ensure that they do not allow their name to be sullied. I have noted the comments by some senators—Senator Mason in particular in this place—about certain environment organisations which have appeared to have crossed that line. But whether or not that money is coming out of their charitable fundraising or whether or it is coming out of their other moneys is something which has not entirely been addressed.

Fundamentally, though, that is not an excuse for sending out to environment organisations a letter which in my view misrepresents the law—a letter which actually tries to constrain their activities and say, ‘You cannot advocate. You can do research and you can go out and save forests but you cannot advocate for changes of policy which will achieve that outcome.’ That is an approach which the Democrats reject. It is an approach out of keeping with modern thinking on charities law and it is an approach which I do hope the government will desist from in terms of trying to bully organisations into self-censoring and muzzling their advocacy activities.