Government noise about reform to the
charities sector seems to be just an empty echo, BRW reported last week. “In May, the tax commissioner, Michael
Carmody, came out with all guns blazing and issued a 70-page draft ruling into
the charities sector aimed at narrowing its definition and reducing the number
of not-for-profit organisations claiming tax exemptions.” Adele Ferguson writes:

As part of the clampdown, Carmody fired off letters to many charities and
non-government organisations (NGOs), informing them that their tax-free status had
been revoked. Others received a warning via a court case that of Public
Benevolent Institutions (PBIs), which could be construed as government entities,
is also in the sights.

This apparent crackdown on the $70-billion
sector was reinforced by letters from the federal Environment Minister, Ian
Campbell, to environmental groups saying that he, too, was reviewing the
tax-deductible status of green groups… Campbell
warned them their tax-deductible status was at risk if they engaged in ‘political
activity’, advocacy or awareness-raising. Instead, the funding would go to
groups doing on-the-ground work, such as tree-planting.

And that’s where the fun began. There’s a
serious debate about when advocacy groups become political organisations. The
lines are very blurry.

The tax clampdown was marked by dire
warning of restrictions on freedom of speech.

At the same time, though, issues of what
happens with taxpayer-provided public funding for elections – let alone other
grants from the public purse – are significant here.

Despite the potential for abuse of public
money for political campaigns, it all seems too hot to handle for the Government.

“Five months on, nothing has happened,” Ferguson says.

The
controversial draft ruling is still to be determined – despite the rush to get
the sector to make a submission in a short time – and most of the letters
Carmody sent to charities and NGOs revoking their tax-free status have recently
been overturned after case-by-case discussions. Even the green groups have
missed a bullet; Campbell’s
letters remain idle threats…

The feeling is that, with all the controversy
surrounding changes to the industrial relations legislation and anti-terrorism,
the Howard Government does not need to attract the ire of the charities sector,
which represents about 10% of Australia’s
gross domestic product, includes more than 700,000 organisations, employs
600,000 people and attracts more than three million volunteers each year. More
important, many of the country’s most powerful people either donate money or
serve on the boards of these charitable groups.

And looking after these people is much more
important than being accountable to us about how our tax dollars get spent,
isn’t it?