It’s time to tackle charity rorts, writes William De Maria. The richest schools are charities, as are big businesses like Queensland Sugar Limited. Even the likes of AI Group and NSW Business Chamber Ltd, organisations which fight against higher pay and better conditions for workers, enjoy charity and tax exempt status. Why should taxpayers foot the bill?
The registered charity that is Victoria’s Wesley College, one of the nation’s richest schools, had an income in 2019 of $128.64 million. Its massive renovation program has included $21 million for a music school, $16 million for a boarding facility and $2.5 million to refurbish its boathouse.
As a charity the school receives perks including income tax exemptions, GST concessions and deductible gift recipient status.
Another registered charity just down the road is Caulfield Grammar, with more than $100 million of income. It has been constructing a new aquatic centre with an Olympic-sized swimming pool, moveable floors and walls and “wellbeing spaces” for dance, pilates, meditation and yoga.
Along with Victoria’s Haileybury College and Sydney’s Knox Grammar School, these Australia’s richest schools. Together, these four charities spent more on new facilities and renovations ($402 million) than the poorest 1,800 schools combined (less than $370 million) yet they teach fewer than 13,000 students. The poorest 1,800 schools teach 107,000 students.
Then there is one of Australia’s poorest schools, Sheidow Park Primary School in South Australia. As principal Jennie-Marie Gorman does her annual walk around the school with the finance officer and the grounds person, they pass windows held together by safety screens; inspect the playgrounds built 20 years ago; note the walls that haven’t been painted in 15 years; and look again at the patch of exposed concrete in the front office, where the finance officer’s swivel chair has worn a hole in the carpet. That hole will be fixed in about five years if all goes to schedule. Says Ms Gorman:
“We have a plan to carpet two to three classrooms a year, based on need, so the ones with the biggest holes in them or the biggest rips get replaced first.”
“We also need new carpet in the office, but we look at what the children need first and we put ourselves at the end of the line — which is just normal teacher stuff. That’s just how we operate.”
The charity concession to non-government schools is propping up a massive two-class education system. Tax concessions take more than $1.3 billion from the government’s budget each year.
Opening up the tax concession trough
Take the cruel issue of homelessness. Some 81% of all charities registered with the national regulator in mid-2019 say they are working in the homeless area. So 46,716 registered charities claim that combatting homelessness is one of their core missions. Remarkable.
The problem is in the definition. In 2013, the Commonwealth Parliament recognised a legislative clarification was needed to respond to the exponential growth of charities caused by governments retracting their historical welfare obligations.
It ended up being not so much a “legislative clarification” as the government opening up unprecedented access to the tax concession trough.
As long as your organisation is set up without a profit motive and comes together for a “charitable purpose” then, well, welcome to the trough.
Definition of a charity
What is a charitable purpose? This is a definition that can stretch across an airfield and is applied recklessly.
The Queensland Sugar Ltd (QSL) describes itself as “a not-for-profit, service organisation owned by Queensland cane growers and sugar millers, which is dedicated to serving their interests for the long-term prosperity of the Queensland sugar industry”.
So a strictly commercial operation, with no donors and no charity programs, is recognised as a charity by the ACNC, in fact recognised as the fifth biggest charity in Australia.
It is hard to believe. Even harder is understanding Queensland Sugar’s logic in justifying why it self-nominated to be on the charity register.
In its Activity Information Statement to the charity regulator Australian Charities and not for profits Commission, in response to the regulator’s question: “What charitable work did you do in 2018”?
QSL replied (paraphrased):
“Continued to promote the development of the Australian sugar industry through providing services to all of Queensland’s growers and Millers (sic).”
So there you have it! Every time you sit down for a cuppa and put sugar in your tea or coffee, QSL is right behind you nodding approvingly that it has just performed another charitable act.
Charity that fights against workers
Then there’s the registered charity the NSW Business Chamber Ltd, which fights against better pay and conditions for workers – and has even fought against workplace leave for victims of domestic violence. There is big money in it. In 2019, its revenues rose from $205 million to $237 million.
This charity also enjoys hefty government grants. Its financial statements for 2018 show the Chamber booked government grant income of $7.5 million, with $6.7 million in grants the year before. As a charity the Chamber pays virtually no tax, even though it operates large law firms and an array of recruitment agencies.
We have gone too far. We need a complete review of the flawed Commonwealth Charities Act 2013. This review should cut away most existing charitable purposes and return the definition of charity back to its Samaritan roots.
William De Maria’s latest book "Trouble in the Land of Giving. Australian Charities, Fraud & the State" was published by Palaver Books in January 2020. It is in contention for the Victorian Premier’s Literary Award for non-fiction.