Coalition tries again to strip eco-charities of tax-deductibility status

by | Aug 5, 2017 | Energy & Environment, Government

The Government will financially damage environment groups by stripping away their tax-deductibility status while corporate lobby groups pay no tax thanks to their not-for-profit status. Its case, based on arguments espoused by helped by the Institute of Public Affairs (IPA) is that eco-charities should not be political activists. When the IPA spins the facts on climate change, tobacco or GMO foods, however, it is subsidised via tax-deductions for its donors. Cam Walker reports.

WITHOUT COMMUNITY advocacy for the environment, the Franklin River would have been dammed, there would be no World Heritage Areas or national parks protecting our wild landscapes, and the Jabiluka uranium mine would have been built in the heart of Kakadu. These – and hundreds of other wins for the environment – happened because enough people and organisations were prepared to get active in sustained campaigning. Just as good working conditions and public holidays were not gifts from benevolent employers, rather they were a product of long struggle by working people, these wins for the environment were hard fought and have to be eternally defended.

In 2017, the Adani Carmichael coal mine, which is proposed for the Galilee Basin in Queensland, continues to lumber towards securing government support and finance. Often described as a “climate bomb”, it will be the largest coal mine in the Australia when completed, massively adding to Australia’s contribution to climate change. It is being resisted every step of the way by environmentalists, tourism operators, traditional owners and many Australians who understand that allowing the mine will sacrifice the Great Barrier Reef.

The Adani Carmichael mine is emblematic of the struggles occurring around the country. Lock the Gate research shows that 54 per cent of Australia is covered by coal and gas licences or applications. New coal, oil and gas threatens vast areas of the continent and is being opposed by alliances of farmers, rural communities, environmental activists and traditional owners. These campaigns are winning, despite the massive influence of the fossil fuel and mining lobby, the best efforts of the conservative media, and conservative Parties and MPs.

The conservatives don’t like the fact that coal is losing the battle for hearts and minds, or that in spite of the Coalition’s regressive energy policies, renewables are jumping ahead of fossil fuels. For years they have attacked the environment movement in the media, but polling continues to show that most people understand the need to protect the environment.

Enter the far Right Institute of Public Affairs. The IPA, which seeks a “less government is better” pro-corporate libertarianism, has long argued that green groups should lose any government funding they receive. In recent years they have been focusing on the tax status of green groups. Almost every larger environmental organisation (ENGO) and certainly all which employ staff rely on holding deductible gift recipient (DGR) status. To have DGR status, a group must be registered as a charity, and either be listed on the Register of Environmental Organisations (REO) or inscribed in the Taxation Act. This allows them to collect tax-deductible donations from the public and is necessary for philanthropic granting organisations to give them funds. If you can remove the DGR status, you cut the vast majority of that organisations funding.

When Tony Abbott was PM, there was a concerted effort to challenge the tax status of a number of groups, and some conservative MPs actively pursued a sustained campaign against those groups with DGR status. After various attempts, in 2015 the government settled on holding a House of Representatives (HoR) Inquiry into the tax status of green groups.This inquiry, dominated by Coalition MPs, was initiated by the then federal environment minister, Greg Hunt. The Chair was an Abbott ally, conservative MP Alex Hawke.

At the start of the Inquiry, Queensland LNP senator (and until recently the federal Resources Minister) Matthew Canavan said a preliminary audit (of the Register) shows “eco-charities were getting tax deductibility status to engage in political rather than environmental activity“.

We’ve got 100 to 150 groups that seem to have their purpose at stopping industrial development, not just mining, some of those developments include tourism developments or agricultural developments but engaging in what I would view as a political debate, not the environmental debate.”

The Committee appointed two supplementary members. One was George Christensen, an MP from Queensland, who has called environmental activists “gutless green grubs” and “terrorists” and said “the greatest terrorism threat in North Queensland, I’m sad to say, comes from the extreme green movement”.  After attending an early public hearing during the Inquiry, Mr Christensen said “evidence points to them losing their tax deductibility status”, a disturbing pre-empting of the outcome of the Inquiry.

The first hearings were held in June 2015. The federal environment department and the Australian Charities and Not for Profits Commission (ACNC) were the first to appear. These are the entities responsible for managing environmental organisations on the REO and the ACNC more broadly manages the not for profit sector.

Both the department and the ACNC said there were no significant problems with the current management systems. The ACNC said that it has the appropriate enforcement powers to regulate charities. This raised the question — why proceed with further hearings if both government bodies that manage the sector say there are no significant problems?

Of course, the hearings continued, with a Coalition controlled majority report released in May 2016 suggesting an arbitrary requirement that DGR groups spend a quarter of donor funds on “environmental remediation” and a draconian attempt to clamp down on the type of work organisations conduct.

This flawed Inquiry, initiated by the Abbott Government and driven by a small handful of conservative MPs with the support of the mining industry, failed to uncover any evidence to justify removing the charitable status of any environment group. There was a dissenting report from a moderate Liberal MP and minority report from the ALP members. Before the Minister could consider the findings, Malcolm Turnbull announced his high stakes early election. When the dust had settled and the government was returned with a thin majority and unruly upper house, many in the movement hoped that the Coalition would walk away from its low level war against the green movement.

Unfortunately, they have come back for one more go. This is their last chance to hobble ENGOs before next year’s federal election, so we have to expect they will pursue this opportunity to the best of their ability.

The new front in this campaign against environmental protectors comes from a new “review” of tax arrangements for non government organisations (NGOs) singling out environmental organisations for particular scrutiny.

In June 2017, it was announced that the federal Treasury was conducting a review of “potential reforms to the Deductible Gift Recipient (DGR) tax arrangements”. On face value this seems benign enough. For instance, it considers a number of proposals to “strengthen the DGR governance arrangements, reduce administrative complexity and ensure that an organisation’s eligibility for DGR status is up to date”. However, we have to see this through the lens of the long campaign against the green movement by the Coalition government.

And sure enough, the review considers a number of the recommendations from the majority report from the House of Reps inquiry. These relate to the suggestion that:

  • Environmental groups should be limited in how much advocacy they are allowed to carry out (with the suggestion that they be required to spend between 25 and 50 per cent of their funds on environmental remediation (eg tree planting), and
  • They should be open to being “sanctioned” if they are not operating “lawfully”. As pointed out above, during the HoR inquiry, relevant bodies like the ACNC confirmed that the current system allows them to ensure this is the case. So why is the government pursuing this issue?

As noted recently by David Crosbie, CEO of the Community Council for Australia,

“There may be many reasons why the government is seeking to audit environmental organisations and restrict their advocacy, but there is no doubt that lobby groups representing the mining industry are going to be active players in responding to the Treasury DGR discussion paper.”

Key players in the resources sector, such as the national and NSW Minerals Councils are using this review to call for activist groups to have their tax status stripped.

This latest attack on green groups has received very little publicity. The deadline for submissions closed on August 4. Although many members of the community have sent in submissions opposing the attempt to rein in green groups, so have key players in the resources sector, enthusiastically cheered on by elements of the Murdoch press.

With the Adani mine sitting at a pivotal point in the approvals process, and a federal election campaign just over the horizon, I doubt we will have to wait too long to see how the federal government will respond to this new assault on environmental defenders.

For background reading on the campaign against the green movement please check here.

Cam Walker is Campaign Co-ordinator for FoE Australia. He’s also a mountain enthusiast, climber and telemark skier.

You can follow Cam on Twitter @Cam_Walker

Adani embroiled in African corruption scandal via arms deal

Cam Walker

Cam Walker

Cam Walker is Campaign Co-ordinator for FoE Australia. He’s also a mountain enthusiast, climber and telemark skier.

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