No More Tax Loopholes: It’s Time For Faith Groups And Religions To Render Unto Caesar

Hugh Harris / 05 January 2016

The perk of ‘tax-free status’ should be reserved for charities which provide unambiguous benefits, writes Hugh Harris in New Matilda.

Jesus was quite clear on the question of tax. Noting the Roman coin bearing the emperor’s graven image, he advised the Jews to render unto Caesar the things that are Caesar’s.

Fast forward to contemporary Australia and there’s precious little rendering going on.

Nominating the purpose of “advancing religion” is one of the ways not-for-profits can gain tax-exempt status. In doing so, faith groups also avoid many state taxes, stamp duties and local government charges.

Tax-free status is granted on the basis that advancing religion is unequivocally beneficial to the public.

We can trace the origins of this presumption to the 400-year-old Statute of Elizabeth. Evidently the following four centuries of barbecuing heretics and warring over the finer points of doctrine haven’t quite dispelled this shibboleth.

No ambiguity pertains to the other charitable purposes covered by the Charities Act such as alleviating poverty, caring for the aged, and providing social welfare: these are directly and inarguably beneficial to the public.

And many faith-based service providers obtain tax-free status by nominating one of them. Thus, genuinely charitable faith groups would suffer no disadvantage from scrapping “advancing religion”.

Thousands of Australians are involved in endeavours such as helping children in need, providing food and shelter for the homeless, and meals on wheels for the aged. This work is laudable, regardless of whether they’re faith-based or secular – even more so, since many volunteers are unpaid.

(IMAGE: Jody Claborn, Flickr)
(IMAGE: Jody Claborn, Flickr)

Some would argue that “advancing religion” enables these charitable services. But since they’re already available as tax-free purposes, “Advancing religion” actually incentivises groups who don’t provide charitable services.

In days of yore, advancing religion was beneficial to the public because the public was universally religious. Virtually everyone participated in it.

But these days, young people are becoming less and less religious. Despite the attempts of recent governments to reassert Christianity in schools, “No religion” is now the highest category for Australians below the age of 25. The more governments try to promote faith, the more public sentiment moves away from it – almost as if they are mutually repellent forces.

And yet despite all the incentives, religion isn’t “advancing”, it’s retreating.

We commence 2016 a determinedly profane people. Perhaps it’s due to the relatively prosperous and peaceful vantage point from which we view the world, and the contradistinction between those countries and regions which are fervently religious.

An increasing number of Australians answer the Census as “No religion”. By 2017 non-belief will overtake Catholicism to become the largest demographic. Fewer than 8 per cent of Australians attend church regularly. Only 15 per cent of men and 22 per cent of women observe the doctrines of their faith.

So why continue to promote it? If there’s an exercise in futility, this is it. What’s the point in patronising empty churches? Why must all Australians chip in for activities that so few take part in?

And it’s not just that so few Australians benefit from promoting religion. Many faith groups act in ways which are contrary to the public interest, and antithetical to the ideals of charity.

The prosperity gospel of Hillsong Church features pastors who make “bags of cash”, and demands its flock to give a 10th of their income to the church. Church leader, Brian Houston even wrote a book called “You Need More Money”.

The fundamentalist Christian Exclusive Brethren, accused of splitting up families, were described by Kevin Rudd in 2007 as an “extremist cult”.

The Church of Jesus Christ of Latter-day Saints (Mormons) now ex-communicates same-sex couples and their children.

Scientology demands larger and larger payments from its disciples as they climb the rungs of its audit hierarchy. By the time they get to the upper levels a substantial, life-altering investment has been made. Only then do they hear the science fiction-esque foundational story of galactic commander Xenu, alien spirits called Thetans, and the hydrogen bombs which were dropped into Earth’s volcanoes.

In opposing Scientology Nick Xenophon has proposed a public benefit test to assess the aims and activities of proposed charitable groups. Though similar to a scheme used in the UK, the Federal parliament voted this down in 2010.

(IMAGE: Anonymous9000, Flickr)
(IMAGE: Anonymous9000, Flickr)

The Catholic Church’s moral authority has been crippled by the child sexual abuse scandal. Despite the pay-outs to victims of sex abuse, the Catholic Church is still the wealthiest private institution in the world. And despite the teachings of Jesus, its treasure is on earth rather than in heaven, but if it sold all it has and gave it to the poor, we’d have an immediate end to extreme world poverty.

Faith groups avoid billions of dollars in tax. The Australian charity sector recorded a 2014 income of $104 billion, with 37.5 per cent of groups nominating the purpose of advancing religion. Basic religious charities aren’t even required to submit financial reports. No exact figures exist, but according to The Secular Party of Australia tax exemptions could cost taxpayers up to $31 billion per annum.

We should cease sponsoring the dogmas of faith, and use the billions of dollars saved on evidence-based policies. Reinvest the money in infrastructure, education, science, technology, and healthcare. Consider easing the debt burden on University graduates, or use the savings to fund tax cuts for ordinary Australians.

Or give tax credits to charity’s unpaid volunteers.

It’s not as if we couldn’t use the money. Our country has a revenue problem, an ageing population, and an economy requiring renewal through investment in innovation.

Australia is face-to-face with the challenge of a tech-led global economy. No longer can we rely on simply gouging our wealth from the soil: never before has the way we spend our tax dollars been more crucial.

Tax dollars must be allocated to programmes providing real and measurable benefits to all. We cannot afford the luxury of subsidizing arcane and increasingly irrelevant belief systems which provide little tangible benefit.

The ghosts of Christmas past still haunt our tax policies, recalling a bygone era of universal religiosity, when churches were unblemished by scandal and still considered the exemplars of moral goodness.

No religious ideology has proven itself to be universally good. If any ideology (religious or otherwise) could substantiate such a grand claim we would have all subscribed to it by now.

As we move into a new year we should scrap the anachronism of tax-free status for advancing religion, reserving it for activities providing direct and unambiguous benefits to society.

All the more reason.