The Rationalist Society of Australia has urged independent parliamentarians and minor parties to pursue reform of Australia’s charities system during the next term of parliament in order to restore public confidence and improve accountability and transparency.
In a letter to independent and minority parties in the House of Representatives this week, the RSA outlined three key reforms that it wanted to see the MPs prioritise when the federal parliament resumes following the election.
Executive Director Si Gladman called for the removal of the ‘Basic Religious Charities’ (BRC) category, removal of “advancement of religion” as a charitable purpose, and removal of tax concessions enjoyed by commercial enterprises owned by religious charities and where business activities were unrelated to the charitable purpose.
Regarding the BRC category, Mr Gladman urged MPs to support the advice of the Productivity Commission, which, in its Future foundations of giving report, recommended removal of the BRC category to “enhance regulatory consistency and public transparency”, and to ensure that all charities are “regulated in a consistent manner”.
“BRCs – charities that have ‘advancement of religion’ as a charitable purpose – enjoy tax and other exemptions to the governance and financial reporting standards that apply to all other charities. As a result, government officials have confirmed that ‘potentially billions of dollars’ are going unreported in the charities system,” Mr Gladman wrote.
“Australians have been troubled by media reports about abuse scandals, harmful practices and financial malpractice among religious charities which operate with little accountability and public transparency.
“Regrettably, the Albanese government is yet to respond to the Productivity Commission’s recommendation regarding BRCs.”
Regarding the “advancement of religion” charitable purpose, Mr Gladman said the presumption that “advancing religion” was inherently beneficial for society was highly contestable, and noted that some charities were run by cults and high-demand religious groups that engage in coercive and abusive practices that cause immense harm.
He also argued that the charitable purpose discriminated against non-religious orgnisations in denying them the same treatment.
“The new parliament should ensure organisations with charity status demonstrate a genuine charitable purpose for the public and that they do not cause public detriment and harm,” he said.
“Religious organisations that already perform genuine charitable work would not be affected, as they would continue to qualify for charitable status for purposes other than ‘advancement of religion’.”
In Canada recently, a parliamentary committee recommended removal of charitable tax status for the purpose of “advancement of religion”.
Regarding the business activities of religious charities, Mr Gladman said the tax concessions raise concerns about unfair competition in the marketplace and pointed to food and beverage maker Sanitarium as a prime example of a church-based enterprise engaged in commercial activity unrelated to the charitable purpose.
He noted that the New Zealand government was currently looking to make reforms in this area. There, a government consultation paper for the current public consultation notes that the impact of such tax concessions is “significant” for government coffers.
In early 2024, the RSA urged independent MPs – a number of whom were elected on a platform of improving accountability and transparency in government – to support enhancing “public transparency and accountability” of religious charities, but did not receive responses.
The Rationalist Society of Australia is actively campaigning 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.