Submission to Treasury: Joint Submission on Tax Deductible Gift Recipient Reform Opportunities
August 2017 | Download full submission
Submission summary
The Deductible Gift Recipient (DGR) framework as provided for under the Income Tax Assessment Act 1997 (Cth) provides a vital system which enables charities and other organisations to receive gifts for which a donor can claim a tax deduction. This means that access to DGR status is an important part of ensuring ongoing funding for charities and DGRs across Australia, particularly in the face of increasing reductions in Government funding.
The community legal sector supports a clear regulatory framework for the not-for-profit sector that ensures good governance and transparency, and the work of the Australian Charities and Not-for-profits Commission (ACNC). As a result, in principle, we support some of the reforms proposed in the Discussion Paper.
We are concerned, however, that the proposed reforms in the Discussion Paper, along with the recent inquiry into the DGR status of environmental organisations, form part of a broader shift to limit advocacy by not-for-profit organisations.
Australian charities, including many community legal centres, undertake important advocacy work and have a long and successful history of bringing about positive and systemic reform of laws and legal frameworks at all levels of government.
In our view, it is important to recognise the economic and public policy benefits of advocacy by not-for-profit organisations and the resulting importance and rationale for ongoing subsidies and support for this work by Government, including through granting of tax concessions.
As a result, we have serious reservations about some of the questions and proposed reforms in the Discussion Paper. We caution against reform in this area, given the absence of evidence that reform is needed, and taking into consideration the potentially unintended consequences of such reform on the quality of laws and public debate in Australia, as well as the rule of law more broadly.
Recommendations
1. The Australian Government should continue to support a strong and efficient charity and deductible gift recipient sector, including by maintaining existing taxation concessions and arrangements.
2. Administration of Deductible Gift Recipient status in Australia should be streamlined, within a clear regulatory framework, administered by the Australian Charities and Not-for-profits Commission.
3. The Australian Government should provide the Australian Charities and Not-for-profits Commission with sufficient resources to undertake its important regulatory work, including any additional responsibilities as a result of proposed reforms.
4. The Australian Government should continue to respect and acknowledge the role of charities in undertaking advocacy work, including through continuing assessment of charitable and deductible gift recipient status based on purposes rather than activities.
5. The Australian Government should undertake further and broader work and consultation in relation to proposed deductible gift recipient reform prior to implementing any such reform.