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Tax Laws Amendment (Public Benefit Test) Bill 2010

ACTING CHAIR —We welcome the Atheist Foundation of Australia in the form of Mr David Nicholls, who is the president. Mr Nicholls is appearing via teleconference. Would you like to make an opening statement?

David Nicholls —I certainly would. Thank you for the opportunity to speak to this committee. The Atheist Foundation of Australia has existed since 1970. I have been a member for 26 years, on the management committee for eight years and the president for five years. The AFA is by far the largest subscripted atheist organisation in Australia, as well as having the biggest internet membership. All members of the management committee must sign a privacy charter which disallows any information about members or numbers of members to leave the committee room. We would be best classed as a philosophical educational organisation and not a religion. The views expressed by the Atheist Foundation of Australia represent a wide cross-section of people known as ‘free thinkers’ and, by survey on various topics, the opinions of the AFA represent a substantial number of those of a religious persuasion.

I want to stress that the AFA is strongly in favour of granting tax concessions to genuine charities that give assistance to combating poverty, illness and the problems of our aged citizens. We also endorse taxation support for educational institutions for their secular pursuits and taxation benefits for other purposes beneficial to the community, as long as they are clearly defined and secular.

The 192 High Court decision in the DOGS case—Defence of Government Schools—included that be advancement of religion was permissible, not compulsory, under the Australian Constitution. One of the prerequisites for charitable status is the advancement of religion—that is not just permissible; that is compulsory. Even so, as humans have followed around 34,000 religions and worshipped about 3,000 gods, it is reasonable to assume that advancing any or all religions is a time bomb that will create dangerous sectarian divisions in the community. A study by Gregory S. Paul titled ‘Cross-national correlations of quantifiable societal health and popular religiosity and secularism in the prosperous democracies’ leaves little doubt that religion is a divisive force in societies and in politics, but that is not the worst part. The study indicates that the greater religiosity in a society the greater dysfunction, the indices being violence, rape, murder et cetera. It follows, therefore, that the AFA does not support the notion that the advancement of religion is a charitable exercise, especially as the convention originates from the 400-year-old preamble to the Statute of Elizabeth in the year 1601, which equates all religious activity with charity.

A charity is a non-profit-making organisation. Most organised religions today are large corporations with vast reserves and holdings in equities ranging from stock market shares to real estate to manufacturing. Their profits are in the billions. Were they charities, 100 per cent of these tax-free profits would be ploughed back into charitable works, but they are not. For the most part, they are used to increase assets and, simultaneously, their influence. When the profits of the Anglican stock market portfolio were reduced last year, they curtailed their charitable work, despite the profits made in their considerable rental and other commercial enterprises. The AFA demands that only the charitable arms of religions receive tax relief, but only if, like all secular charities, their books are open to inspection and auditing, they do not restrict their charity to their own adherents and they abide by every provision of the United Nations charter of human rights. To this end, the purely commercial activities of religions must be treated as separate entities and pay their fair share of tax, thus relieving the burden on honest taxpayers. The facts are damning. The estimated untaxed income of religions in 2009 was $30 billion. Australian taxpayers had to make up the shortfall. It does not take a rocket scientist to see that this is unethical and unacceptable. If this figure of $30 billion of untaxed income was firmly implanted in the public mind, with it being common knowledge that the number of regular churchgoers is only about seven per cent of the population, there would be an understandable majority outcry of some magnitude. It is the opinion of the Atheist Foundation of Australia that blanket support of religions through tax breaks should cease and the charitable arms of religions should receive only taxation concessions if they are accountable to the Australian public.

CHAIR —Thank you.

Senator CAMERON —I have heard the figure of $8 billion as the cost of charities to the public purse. Where do you get $30 billion from?

David Nicholls —I am talking not just about charities; I am talking about the cost of all aspects of religion in Australian society. To give you an example—I cannot quite remember what they were called; it has escaped my mind for the moment. But in America the Council of Churches—I cannot remember the date but it was in the 1990s—declared that they had a tax income of $450 billion. Now, that is with 253 million people, which is more than us. But, if you do a quick calculation, you work out that the $30 billion is a reasonably accurate figure, and it is a figure that is supported by a book by Max Wallace called The Purple Economy, and there is also a study by Gomez and Perkins—and I think you have a submission from them, from the Secular Party of Australia; that is submission No. 68—which verifies what I am saying.

Senator CAMERON —The bill that is before us from Senator Xenophon goes some way towards what has already been established in the UK, Ireland, Scotland and New Zealand, and that is a charities commission. This could be like a stepping stone towards a charities commission. Do you have any views about the establishment of a charities commission?

David Nicholls —You were breaking up considerably, sorry.

Senator CAMERON —I do not know that I can do anything.

ACTING CHAIR —Senator Cameron asked you if you had any views on the establishment of a charities commission, along the lines of the UK—

David Nicholls —Yes. As our submission says, and as I have just stated, charities have to be accountable. And they have to be separate from church matters, because nobody in Australia knows—and I am sure that none of you good people would be able to tell me—what proportion of that $30 billion is towards charities and what proportion is enhancing the religions that are being mentioned.

Senator CAMERON —It seems to me that the Atheist Foundation have basically said that religions have to accountable, and that is a fair enough proposition. But there seems to be a bit of intolerance towards religion, and it is clear that the High Court has accepted that people are entitled to make a choice to practise a religion. What is your view on that?

David Nicholls —I do not think ‘intolerance’ is the correct word. I think religions should be treated the same as any entity that has its hand out for tax benefits. What is in tolerant about that?

Senator CAMERON —No, I am talking about tolerating people who decide that they believe there is a spiritual focus and they want to practise a religion.

David Nicholls —We are not intolerant of people who want to practise a religion. People can believe anything they like. People can believe there are fairies at the bottom of the garden; we do not mind. But, when that belief encroaches upon everybody, the Atheist Foundation has to say something about it. That is what we are here for.

Senator CAMERON —Okay. That is it from me.

ACTING CHAIR —Thank you. Senator Xenophon, do you have some questions?

Senator XENOPHON —Mr Nicholls, thank you for your submission. This bill provides for a public benefit test. Does the Atheist Foundation of Australia receive tax concessions under division 50 of the Income Tax (Assessment) Act or any other legislation?

David Nicholls —We do not receive any more taxation benefits than your average pony club.

Senator XENOPHON —Sure. Mr Lind, a lawyer who acts for charitable and religious organisations, made the point in terms of broader public policy that, if an organisation delivers common-good outcomes—in other words, they perform charitable acts, they alleviate poverty or homelessness, or a number of other acts that could universally be described as being in the public benefit—and they get a tax concession, one of the arguments is that, if they did not do it, the government would have to do it, at greater expense ultimately to taxpayers. I am trying to fairly paraphrase what Mr Lind, a lawyer who acts for charities and presumably religious organisations, has put to the committee. Do you have a comment on that?

David Nicholls —We are not saying that people who are doing public good should not receive tax concessions; we are saying they should receive tax concessions. We are very strong about that. But we also say they should be accountable. There have been a couple of cases—one in your home state, Senator Xenophon—of the Agape Ministries, who use coercion and forced abortions and all sorts of things. They are classed as a charity. The figures floating around in the paper are that they have received something like $150,000 to carry out this work. How do you tell who is doing good stuff and who is doing bad stuff if there is no accountability? All we are asking is that charities have to be accountable.

Senator XENOPHON —You do not have any argument from me in relation to that, Mr Nicholls. I just want to get your views on what Mr Lind said. To be fair to Mr Lind, he seemed to be broadly supportive of a charities commission type approach. There is one that exists in the UK and one that exists in New Zealand more recently, where there is a degree of transparency and accountability. Is that the sort of thing that you would welcome—that there be a body that can supervise and provide benchmarks for the activity of organisations that receive tax concessions?

David Nicholls —If those bodies are working efficiently, I would suggest, yes, that would probably be the way to go. But, as I say, I do not know. I realise there are probably thousands and thousands of charities. Will they be capable of being effective?

Senator XENOPHON —You are saying that it is good to have that level of supervision or overview, as exists in New Zealand, for instance?

David Nicholls —If it is as I assume, that they have the power to investigate any matter they deem necessary that has to do with taxation money going, yes, I would agree with that statement.

Senator XENOPHON —And you have said in your submission that you are supportive of the introduction of a public benefit test. How would you see such a test working? Further to that, how would you like to see the not-for-profit sector reformed in terms of its operations?

David Nicholls —It would be a pure matter of auditing as far as I can see. The money that goes in has to be accounted for in how it goes out.

Senator XENOPHON —So it is more of a financial transaction?

David Nicholls —I think that is the only way that you are going to be able to have some sort of control on anybody who wants to class themselves as a religious charity and can get away with things such as the Mercy Ministries and Agape and probably countless others that we do not know about. Apart from separating religion itself from charities, which seems to be something that people cannot get their minds around, there has to be some sort of control on the money that goes into religion that is untaxed and where that money goes. The public have a right to know where the money goes.

ACTING CHAIR —So there needs to be a right of audit? Yes or no? You would support an audit of expenditure of where the money goes?

David Nicholls —Yes.

Senator XENOPHON —In your view, do any religious based charities provide benefits to the public, leaving aside whatever systems of belief a religion may have? You do concede that they can provide benefits to the public in terms of charitable works?

David Nicholls —Yes, I would certainly agree. People who are of a religious nature have different motives for helping with charitable institutions. I do not want to go into what those motives might be. Yes, I would fully support anybody who was trying to benefit other humans.

Senator XENOPHON —Thank you, Mr Nicholls.

ACTING CHAIR —Mr Nicholls, that concludes this segment of the hearing. Thank you for appearing this afternoon. Your evidence has been very useful.

David Nicholls —Thank you for inviting me; it has been most wonderful.

Proceedings suspended from 3.59 pm to 6.06 pm