The Productivity Commission has rejected claims that the removal of the Basis Religious Charities (BRCs) category from Australia’s charities laws would infringe on the constitutional guarantee of free exercise of religion.
In its report on philanthropy, released on Thursday, the Productivity Commission expressed its belief that removing BRCs and related exemptions “would, on its face, comply with section 116 of the Australian Constitution”. Among other things, section 116 prohibits the federal parliament from enacting laws “for prohibiting the free exercise of any religion”.
A number of participants in the inquiry warned that the removal of the special exemptions to governance standards that apply to all other charities could result in the charities regulator, the Australian Charities and Not-for-profits Commission (ACNC), interfering in a religious organisation.
Some submissions argued making it possible for the ACNC to take action against a religious charity that engages in wrongdoing – such as through the suspension, removal or replacement of a responsible person – would breach section 116 of the Australian Constitution and Australia’s obligations under international law, such as Article 18(1) of the International Covenant on Civil and Political Rights.
Under current Charities Act rules, some faith groups are considered BRCs and are exempt from financial transparency obligations and regulatory oversight applicable to other charities. However, some faith groups are not considered BRCs and have always been subject to the same rules as non-religious charities.
Others who made submissions – including by constitutional law expert Professor Luke Beck of Monash University – argued that the proposed change would be unlikely to infringe any such freedom under section 116, given the narrow construction of that protection by the High Court of Australia.
The report says:
“In Kruger v Commonwealth, the High Court held that to attract invalidity under section 116 of the Australian Constitution, a law made by the Australian Parliament must have a purpose of achieving an object that the section forbids (such as prohibiting the free exercise of religion).
“The Commission’s proposed change does not have such a purpose. Rather, the purpose of recommendation 7.1 is the consistent application of the ACNC’s regulatory framework – including governance standards and reporting requirements – to all charities.
“Similarly, the identified regulatory mechanisms (such as the ACNC governance standards) do not have a purpose of prohibiting the free exercise of religion.”
Also, the Productivity Commission argued that the voluntary nature of ACNC registration would not impose obligations that were inconsistent with the Constitution.
The Productivity Commission again did not support calls from pro-secular groups – referencing submissions by the Rationalist Society of Australia and Humanists Victoria – for the government to remove ‘advancement of religion’ as a charitable purpose in and of itself from the Charities Act.
After the Productivity Commission signalled in its interim report late last year it would not make recommendations in relation to ‘advancement of religion’, the RSA called for it to instead propose the introduction of a new charitable purpose for advancing non-religious worldviews in order to remove religious-based discrimination.
The report says:
“Some participants proposed removing the advancement of religion as a charitable purpose within the Charities Act. The effect of doing so would remove access to other tax concessions for these charities, such as the income tax exemption. Although the Commission is not proposing to extend access to DGR status to charities that have a sole charity subtype of advancing religion, it is not recommending any changes to the Charities Act, nor changes to the existing eligibility for the income tax exemption for charities outside the scope of the DGR system.”
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Si Gladman is Executive Director of the Rationalist Society of Australia. He also hosts ‘The Secular Agenda’ podcast.
Image: Andy Wang on Unsplash.