TAXATION LAWS AMENDMENT BILL (NO. 7) 2003: Second Reading
Mr CADMAN (Mitchell) (6.33 p.m.) —Mr Deputy Speaker Barresi, it will not surprise you one little bit to find out that I absolutely oppose and condemn the amendment.
I do not think it is worthy, because the fact of the matter is that we have to take charge of a growing philanthropy that we need to encourage in Australia. It is irresponsible to expect, as it appears the opposition members do, the largesse of the taxpayer to extend to any possible organisation or to any possible reason whatsoever that people want to claim the tax benefits offered by organisations. That appears to be what the opposition is arguing, and I reject it completely.
I have studied this because, when the exposure draft of the Charities Bill 2003 was released for people to look at, it was organisations such as Greenpeace, Oxfam Community Aid Abroad and the World Wildlife Fund which were the main objectives. Those organisations are internationally based. They operate worldwide, and a lot of their activity is criticism of government. Whether or not they fall within the scope of this legislation needs to be tested, but the fact is that we need to focus on those organisations that are actually delivering support to and achieving something beneficial for others. That is the purpose of this legislation. I cannot do better than quote Mr Tim Costello, who is the director of Urban Seed, in Perspective, a radio program that he presented on Monday, 18 August 2003. He said:
So was Phillip Adams right in his charges? Yes and No. No, because I do not think the Treasurer's primary intention was to change the common law but to codify it. He hoped to retain the current position that requires practical hands on service delivery, not advocacy, as the distinguishing mark of a charity. Delivery of aid must be the substantive purpose to obtain tax deductibility.
There he has it, absolutely perfectly expressed. I think that is what the purpose of this legislation and this process is.
The Labor Party can object until the cows come home. I know that, in doing so, they align themselves with a number of advocates. One of these is of course Andrew Hewett, who is the Executive Director of Oxfam Community Aid Abroad. Andrew Hewett got stuck straight into the Treasurer in relation to freedom of speech, saying that what had been put forward was terrible stuff but failing to recognise that Community Aid Abroad must really be able to demonstrate, as Tim Costello said, the delivery of aid that must be the substantive purpose to obtain tax deductibility. We need to be able to ensure that the substantive purpose is delivery. I am not for the restriction of criticism, but if an organisation would be better registered as a political party then it ought to get registered as a political party. That is the difference; that is where the line needs to be drawn.
Like a number of these international organisations, Greenpeace is basically undemocratic. You cannot vote for the directors of Greenpeace or for anybody it employs. You just accept the organisation, make your donation and let it rip. The question is: are organisations such as Greenpeace worthy of support? It is very challengeable. I think it is very doubtful if you compare them with some of the local organisations in all of our electorates that deliver support, aid and welfare. Day after day, people on the streets deliver aid and support to those in need. They are right through Western Sydney, and they need to be encouraged. In fact, they need greater support from governments to claim the philanthropic dollar that they ought to receive. We have to encourage the process of getting the philanthropic dollar to organisations. The more we do that, the less reliance there is on complete subsidisation by the taxpayer. We ought to encourage those attitudes in the Australian public. [start page 19169]
I have mentioned Andrew Hewett of Oxfam Community Aid Abroad. He was quite extreme when he accused the IPA of being:
... an extreme right-wing business lobby group with a demonstrated hostility towards NGOs.
He also accused it of:
... vilification and a smear campaign against charities, welfare and aid agencies.
I know that is not the case with the IPA. They do not operate like that. Gary Johns does not operate like that. Gary Johns, who is going to do the inquiry, does object to the wasteful use of the taxpayers' dollar and to concessions that waste the effort that should be a charitable effort, properly directed. I know that it is not easy to get the definitions right, but it is certainly not the Treasurer's intention to harm organisations that ought to be advocating, on behalf of those in need, for some more assistance. But it is not the role of those organisations to advocate mainly or solely; that is the role of a political party.
There must be a purpose for taxation support. Taxpayers have scarce resources that must be used properly and effectively. They must be targeted to the needs of others so that programs of support and charitable use can be properly identified. That is the way in which the common law process ran, and that is the way in which the Treasurer has intended this legislation to apply. The Treasurer has intended to codify the process—nothing more, nothing less—but he has drawn the ire and criticism of organisations such as Community Aid Abroad, Greenpeace and the World Wildlife Fund.
Gary Johns has said that some of these organisations increasingly resemble the political parties and international corporations that are their target—with one important difference: they are far less accountable. And Johns is right there. That has always been Gary Johns's theme. When he was here as a minister, he ran the theme that accountability is a critical part of government expenditure. If anybody on either side of the House could be critical of Johns for that, I would be very surprised. Whilst people may disagree that it should be a sole purpose, I think it is a very laudable purpose for somebody in public life to make sure there is complete accountability.
Let me quote Alan Wood, the economic editor of the Australian. On Tuesday 19 August he said:
What Johns and others have recognised is that while these groups base their popular appeal and fundraising on claims such as saving the environment and protecting workers in developing countries and the poor, there is an underlying agenda which is hostile to Western, particularly Anglo-American, liberal democracies and the political, institutional, corporate and economic structures that underpin them.
And that is right. Nobody could doubt that that is their purpose. Johns is saying that these organisations are basically political in the way in which they operate. Therefore, I have no trouble rejecting what is said by the Australian Labor Party. We should be encouraging charitable giving and charitable organisations. I agree with Tim Costello. He is in a difficult position. We know that he speaks his mind on any topic that comes into his head; he will have a go at it and, even if it affects the life and career of his brother, he will say things. He has a very balanced approach to what the Treasurer and the government are endeavouring to do here.
Mr King —He has got integrity.
Mr CADMAN —Thank you, my friend; that is a very helpful interjection. He has integrity in the way in which he is presenting this case.
The DEPUTY SPEAKER (Mr Barresi)—No interjection is helpful.
Mr CADMAN —Mr Deputy Speaker, I know that it was out of order, but it was a very helpful interjection just the same. I think the words of Tim Costello and of Gary Johns, whose purpose is clear, override what the Australian Labor Party is trying to do. One only has to comb through the Senate committee inquiry into this legislation to understand the complexity of what we have done as a community. I would not say that the records of Treasury became confused, lost or so complex that it was hard to know which charities were entitled to benefits and which ones were not, but there was a point when it had become a Topsy like process. So the registration and licensing process that the government entered into some three or four years ago has been clarifying which organisations are worthy to receive taxpayers' support.
Having done that, we have come to the legislative process for funding, and I think this is completely appropriate. The Treasury officials, in consultation with the Senate, have determined how many organisations are entitled to benefit, how they are to be registered and the processes of regulation that will be used to add charities to the new list. Rather than having to add a whole list of organisations which are not tax exempt but which receive tax exemptions for gifts every time legislation is made—there are some charities nominated for taxpayer support in the current legislation, in fact—the public listing is going to continue by way of regulation. That is the purpose, in part, of this legislation.
So there are reams of stuff, which the Senate looked at line by line, which is the way it does things. There are, for the House, the comments of people such as Andrew Hewett. There are further comments from individuals such as Elsa Atkin of the National Trust, who says that our heritage is at risk. She says, `As a charity, we rely heavily on tax-deductible donations.' The National Trust works out there and does stuff on the ground. No-one should ever doubt that they are an organisation that carries out a very worthwhile function in our society. In codifying the common law, as the Treasurer set out to do, I think that there is no intention that organisations such as the National Trust, which draws to public attention the need to preserve particular buildings or natural features, should not continue its fundraising programs, seeking to restore and establish those parts of our heritage which are worthy of retention. The complete exaggeration that I find here is quite strange, because there must be, I would suspect, some sort of political agenda behind what is going on. [start page 19170]
I want to quote again from Alan Wood's article:
Johns sees the NGOs, charities and others as part of a new communitarian civil society that is challenging the legitimacy of representative governments in liberal democracies. They are able to do so because liberal democracies provide an unprecedented ability for citizens to voice their disquiet.
This makes the present democratic institutions appear inadequate and less trustworthy, a position NGOs exploit. `The irony is that the critics of liberal democracy—indigenous, feminist, gay, environmentalist, civil-libertarian, socialist—have all had their greatest successes in liberal democracies' ... `They are not doing so well in crony-capitalist, Islamic or communist states, even less well in tribal polities.
That is Johns's view and I think that it is a very frank and, probably, stark presentation that is in part true. He will be examining what charities exist for. He will be presenting his findings to the government and we will be clarifying the process of codification of the common law.
I reject some of the statements that have been made. There is no way that Peter Costello could ever be seen as other than charitable and supportive of people wanting to help themselves. That is his family tradition. That is his own personality. That is the personality expressed by his brother. Coming in here and denigrating a perfectly reasonable process is not only an objectionable but a quite unnecessary and wrongheaded action on the part of the Labor Party.
There are other provisions in this Taxation Laws Amendment Bill (No. 7) 2003. There is a whole range of proposals, including the one referred to by the member for Reid—the tax exemption for Second World War payments, which he wanted extended to the whole wide world and anybody living in Australia that had suffered under some undefinable, undefined hardship. I think he said, `like circumstances to World War II'—but he did not specify that there should be payments for those.
We tried to track down the war criminals in Australia. That inquiry ran for years and cost millions of dollars and achieved nothing. Not a single war criminal was identified, nobody was charged, nobody was brought before the courts and nothing happened: are you suggesting, as a party, that we go through that process to establish the legitimacy of who should receive these funds—these undefined funds and benefits that your colleague wanted to establish? I can understand the hurt and the pain and I can understand the hardship that these people have gone through, but that is in the past. They are in an open, free and democratic country now, where they have wonderful opportunities to build new lives. That is what we should be focusing on, rather than trying to nail some character overseas who may or may not have committed atrocities against them many years ago.
I deplore the atrocities. I think people should be brought to justice. I do not resile from that, but we have tried that process here in Australia and it failed. We could not carry it out. We could not get witnesses that were reliable. We could not get people to come forward and testify in a manner that would give a result. That thing cost millions of dollars and produced no results whatsoever. It had all the attention of our best lawyers, and some of our great nation's greatest constitutional and criminal lawyers were involved in that process. No funds were spared. In the Second World War, the Holocaust was the most stark, relevant and clear-cut denial of human rights. To try to compare the effort we made with some of the goings-on in Uruguay or other places where we have even less likelihood of establishing what happened is, I think, wrongheaded.
The tax exemption for Second World War payments—described here as restitution—is, I think, a sensible and worthy objective. But to extend it to the point that the Australian Labor Party wants to extend it to is fraught with unreasonable risk and traps and holes that have not been thought through. We have covered gifts and covenants. The harmonisation and deeming provisions that affect the Crimes (Tax Offences) Act are reasonable. The consolidation measures, the foreign loss makers transitional arrangements and the GST interaction with the consolidation regime are all commonsense things, and the consolidation of companies into one entity for the purpose of the GST is a further refinement. Regarding the imputation rules for life insurance companies, I do not want to say a great deal about life insurance companies. I have held forth on them previously in the House. I think that we are going through a process, but the sooner we have real integrity and real competition in Australia amongst insurance companies the better off we will be.
The bill also addresses overseas forces tax offsets, and I think that is worthy and very worthwhile. I have not commented on the rollover provisions for the financial sector reform regime or the foreign hybrids. As the opposition member at the table realises, there are, as always, technical amendments in addition to that. The technical amendments are always great areas for exploration and possible game playing, but not in this instance. I have no trouble recommending the bill to the House, but I will say that the opposition's amendment is ridiculous and unnecessary. The purpose of charitable organisations is clear in the mind of the government. We are striving to refine the process to make sure that people do not abuse the concessions. (Time expired) [start page 19171]
Author: Alan Cadman MP
Source: House Hansard - 10th September 2003
Release Date: 10 Sep 2003