Productivity Commission Review into Philanthropy
In February 2023, the Treasurer asked the Productivity Commission to investigate how to increase philanthropic giving in Australia. In November 2023 the Commission released its draft report. Unfortunately, the report’s recommendations went far beyond the terms of reference, directly targeting religion.
The Commission recommended massively extending tax-deductibility for almost every form of non-profit, with the explicit exception of non-profits whose purpose is advancing religion. The Commission also recommended the removal of two existing categories of tax deductibility — both of them religious. The first was Religious Education in Government Schools (RIGS). That’s school scripture – SRE and RI. The second was School Building Funds, which is used by both the public and private school systems, but predominantly by faith-based schools, to build buildings to educate the next generation.
Finally, the Commission recommended the removal of the category of basic religious charity. This was a category created when the Australian Charities and Nonprofits Commission (ACNC) was formed. Because the ACNC was given wide-ranging powers over non-profits, including removing the executive and replacing them, the Government realised that if the ACNC had this power over churches, they literally could remove the local minister, or even the archbishop, and replace them with their own person.
At that time, it was obvious that the ACNC having that type of power over local churches was unreasonable. So, they created a category for basic religious charities and said they were exempt. This is the category that the Productivity Commission has recommended be removed. They argued that religions should have the same compliance as everyone else.
The impact would be unprecedented Government authority over all faiths.
Our Response
In response to this report, Freedom For Faith supported faith leaders in writing submissions providing feedback on the report and lodged a sizable submission ourselves. Our submission particularly focused on exposing the systematic anti-religion agenda demonstrated by the Productivity Commission. We also supported sustained engagement with the Federal Government by faith groups to explain to the government the impact of these recommendations.
Encouragingly, the Government made a point of saying that the report was a draft report and that the recommendations were merely the Commission’s positions, not the Government’s.
In July 2024, the Commission released its final report. Despite our submissions, all the anti-faith recommendations have remained. We know that they have read our submissions, so their recommendations are not unintended consequences. They are intentional.
It is very disappointing that the Commission completely ignored all our feedback, but the encouraging thing is that the Government has been listening. Once again, they have distanced themselves from the recommendations, highlighting that this is only the Commission’s position.
They have also explicitly ruled out removing tax deductibility from School building funds and religious education in Government Schools. This is a good start.
What’s Next?
We still do not know what the Government will do with the Commission’s recommendations on tax deductibility more broadly, or regarding protection for the Basic Religious Charity category.
The Government very clearly knows our position and we are waiting to hear more. Given the pushback from faith groups, and with a federal election on the horizon, we do not anticipate significant progress with the report in 2024.
