FACTCHECK: Religion, Tax & Regulation

A number of political parties in the upcoming Federal Election, such as the Australian Sex Party and the Secular Party have, as adopted as part of their policy platform a call to end the tax-exempt status of religious non profits.

As presented by these parties, there is a special religion-only loophole in our tax system which specifically exempt religious non-profits from paying tax at the expense of everyone else.

The problem with this is that it simply isn't true. These parties are being either deliberately dishonest, or simply do not understand how our tax law works.

It is key to remember that non-profits and charities are not necessarily the same thing, and those pushing such a policy seem to conflate them.

Opponents of religious non profits point out that religious bodies receive tax-exemption. This is true, however, so do many many other non profits. This is non specific to religion. If you exist to promote encouragement of art, literature, music, if you're a trade union or a university, if you want to promote fishing, agriculture, tourism, or vineculture, or even if you want to promote animal racing or sports, or if you fall into one of the many many other categories, you are exempt from income tax. There is nothing - NOTHING - special about promoting religion.

As such, to single out organisations that exist to promote religion and hit them with a specific and punative tax hike that does not apply to other non profits is unfair an unjust.

I must stress that when people think about "charities" they usually think of Deductible Gift Recipients. Churches are NOT automatically considered DGR's. This is a totally separate issue. DGRs are "registered PBIs, public universities, public hospitals, school building funds, public libraries, registered cultural and environmental organisations, and ancillary funds." The promotion of religion is NOT one of these. Thus to talk about the benefits the tax-exemption that Churches receive, and give the impression that you are referring to DGR status, is simply factually incorrect.

There is an argument to be made that all non profits should be taxed (with corresponding tax cuts elsewhere of course). Unions would protest vociferously, and I believe that there are strong public policy arguments to keep non profits tax-exempt, but at least there is a logical and consistent argument that can be made about removing this exemption as part of simplifying our tax law. To single out religious non profits for a specific tax hike though is just wrong.

A further concern is the move by parties such as the Australian Sex Party to increase regulation on the non-profit sector, specifically focusing on religious based non-profits, through increasing regulation through the power of the Australian Charities and Non Profits Commission. This is highly, highly disturbing government interference in the non-profit sector, and will have the effect of severely hampering charities with paperwork and bureaucracy; some small charities are already struggling just to survive (the Centre for Independent Studies has some good information on why it should be abolished). The overall effect of strengthening such regulation will be to strangle charities with red tape, killing off civil society and making more and more dependent on the state.

These policies are anti-liberty, anti-choice and are, effectively, using big government to single out and harass religious organisations in Australia. Whether this is done out of ignorance or malice, I do not know, however, when voting this Saturday, please do bear this and mind and don't fall for the line that just because a political party has a couple of good policies, then it means that it is necessarily pro-freedom.

Join ATA on Social Media:

Share our message of less taxes,
regulation and wasteful spending