The Rationalist Society of Australia (RSA) is urging the Albanese government to support the Productivity Commission’s call for the removal of ‘Basic Religious Charities’ (BRCs) from the charities system.
The Productivity Commission has stared down pressure from religious groups and the Liberal-National opposition to recommend the removal of BRCs in order to “enhance regulatory consistency and public transparency”.
In the final report for its inquiry into philanthropy, Future foundations of giving, released yesterday, the Productivity Commission said it had carefully considered submissions and evidence provided at public hearings but “could not identify a policy rationale that justifies retaining” BRCs.
Having BRC status means that a religious group is exempt from financial transparency obligations that apply to other religious groups and other charities.
The Productivity Commission has also retained its recommendations for the removal of Deductible Gift Recipient (DGR) status for religious education activities in government schools and for school building funds, and for excluding all activities for the purpose of ‘advancing religion’.
Religious groups heavily criticised the Productivity Commission’s interim report, released in November, describing it as having “a clear anti-religion agenda” and a “direct attack” on faith communities.
In submissions to the inquiry mid last year and early this year, the RSA said the exemptions enjoyed by BRCs in regards to meeting governance standards and financial reporting requirements undermined the integrity of the charities system and public trust.
In its final report, the Productivity Commission’s recommendation 7.1 for “a more transparent and consistent approach to regulating charities” said the government should amend the Australian Charities and Not-for-profits Commission (ACNC) Act 2012 to remove the concept of BRCs and associated exemptions. The report says:
“Basic religious charities should be subject to the same ACNC governance standards and financial reporting requirements as other charities…”
“These changes are reasonable, proportionate and necessary given community expectations around the transparency and accountability of all charities, and the benefits associated with the collection and publication of financial information of a significant proportion of the charitable sector.”
The report referenced testimony from the RSA and others, including the Atheist Foundation of Australia, that different governance and reporting requirements for BRCs lacked a principles-based rationale and contributed to a lack of transparency and accountability. The report says:
“The Commission carefully considered the submissions and evidence provided at public hearings in support of current exemptions afforded to basic religious charities, but could not identify a policy rationale that justifies retaining them.”
The Productivity Commission dismissed warnings from religious groups that the reform would place additional administrative burden on religious charities, particularly small charities with limited administrative capacity. The report says:
“Overall, requiring basic religious charities to meet ACNC financial reporting requirements is anticipated to generally represent low administrative burden for most affected charities.”
RSA Executive Director Si Gladman said the wider Australia public now expected the Albanese government to accept the advice of the Productivity Commission and implement the reforms.
He pointed out that the ACNC, in its own submission to the philanthropy inquiry, recognised that special exemptions given to BRCs may be reducing public trust and confidence in the charities system.
“There is a clear need for greater transparency and accountability in the charities system. We’re urging the Labor government to do the right thing by the Australian community and help restore public confidence by removing the Basic Religious Charities category,” he said.
In parliament earlier this year, the coalition grilled Productivity Commission officials on whether they had addressed the concerns of faith groups and revised its recommendations.
In 2022, government officials confirmed that “potentially billions” of dollars were going unreported in the economy because BRCs did not have to submit financial information to authorities.
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Si Gladman is Executive Director of the Rationalist Society of Australia. He also hosts ‘The Secular Agenda’ podcast.
Image: Melissa Walker Horn (Unsplash)