The Rationalist Society of Australia has called on federal and state governments to examine the impact on business competition of tax concessions for church-owned commercial enterprises.
In a submission to a public consultation on ‘Revitalising National Competition Policy’, the RSA said tax concessions for commercial enterprises with charity status for ‘advancing religion’ was unfair to competitors and urged governments to address the “long-standing barrier to fair competition”.
In a foreword to the consultation paper outlining the joint ambitions of federal and state/territory governments to boost competition, federal treasurer Jim Chalmers and New South Wales treasurer Daniel Mookhey said competition was important in “leveling the playing field” so that businesses “don’t face unfair barriers to growth”.
RSA Executive Director Si Gladman pointed to cereal-maker Sanitarium, owned by the Seventh Day Adventist Church, as a prime example of a church-based enterprise enjoying an unfair advantage.
Mr Gladman pointed to arguments that the competitive advantage could be reflected in lower prices for customers of the church business, but said the RSA was not aware of comprehensive research on the extent of market distortion.
He, therefore, suggested governments should investigate this area further as part of their efforts to revitalise national competition policy.
“Australian governments have an opportunity to examine the extent of the impact on competition in these circumstances, and to take appropriate action,” he said.
“Australian businesses deserve a level playing field. We urge you to address this long-standing barrier to fair competition.”
In 2008, the High Court’s ruling in Commonwealth of Australia v Word Investments Ltd – in which a majority decision overturned the Australian Taxation Office’s refusal to grant Word Investments tax-exempt charity status – ensured church-owned commercial enterprises would have tax exemptions if their profits went towards the charitable purpose of ‘advancing religion’.
The RSA’s submission pointed to international examples where comparable countries separated the unrelated commercial activities of religious organisations with their charitable activities.
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Si Gladman is Executive Director of the Rationalist Society of Australia. He also hosts ‘The Secular Agenda’ podcast.