The Rationalist Society of Australia is urging the Albanese government to follow New Zealand’s lead and examine the tax concessions of commercial enterprises owned by religious charities.

In a letter to finance minister Katy Gallagher last month, RSA Executive Director Si Gladman said the tax concessions for religious-owned commercial enterprises, such as cereal maker Sanitarium, did not meet public expectations.

He noted that New Zealand had recently announced it would examine loopholes that allow trading entities structured as charities to avoid paying taxes, with media reports suggesting Sanitarium may be among those affected.

In Australia, the Sanitarium Health and Wellbeing Company, which is wholly owned by the Seventh Day Adventist Church, does not pay taxes as it is registered as a charity for the purpose of ‘advancing religion’.

Mr Gladman also asked Minister Gallagher (pictured) whether the federal government knew of the tax amount forgone due to such concessions.

As part of a community consultation process on competition policy with the Treasury Department this year, the RSA argued that commercial enterprises with charity status for ‘advancing religion’ distorted the marketplace.

“This arrangement also distorts the marketplace – with businesses having to compete on an unfair playing field with church-owned commercial enterprises,” he said.

“We believe such enterprises should be subject to the same legal and financial laws as other commercial entities.”

The New Zealand government is expected to announce changes to its charities laws when it delivers its budget in May.

The Rationalist Society of Australia is actively advocating for reform of the charities sector. Follow our campaign updates here.

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Si Gladman is Executive Director of the Rationalist Society of Australia. He also hosts ‘The Secular Agenda’ podcast.

Image: Katy Gallagher (Facebook)

Letter to Minister Gallagher, 23 December 2024

Dear Minister Gallagher,

I’m writing to you on behalf of the Rationalist Society of Australia (RSA), which is Australia’s oldest freethought organisation promoting reason, secularism and evidence-based public policy.

In New Zealand, the finance minister, Nicola Willis, has announced she will examine loopholes that allow trading entities structured as charities to avoid paying taxes. According to recent media reports, cereal maker Sanitarium is one such entity that may be impacted. 

In Australia, the Sanitarium Health and Wellbeing Company is wholly owned by the Seventh Day Adventist Church. As such, it has charity status for the purpose of ‘advancing religion’ and pays no company tax.

But, in a submission to the Revitalising National Competition Policy public consultation in October, we noted that the extent of the problem went well beyond Sanitarium, with religious groups said to be running “huge commercial enterprises” which are “often indistinguishable from comparable business activities in the for-profit sector”.

The federal government’s provision of tax concessions for commercial enterprises with charity status for ‘advancing religion’ does not meet public expectations. This arrangement also distorts the marketplace – with businesses having to compete on an unfair playing field with church-owned commercial enterprises. We believe such enterprises should be subject to the same legal and financial laws as other commercial entities.

Does the Albanese government know the extent of the tax amount forgone due to the concessions afforded to commercial operations owned by religious charities? If so, what is it?

Will your government follow New Zealand’s lead and consider reform of the current arrangements as applying to commercial operations owned by religious charities?

Regards,

Si Gladman

Executive Director,

Rationalist Society of Australia