The Rationalist Society of Australia has again urged the federal government to get on with reforming religious charities to restore public confidence in the nation’s charities system, noting it has been two years of inaction since receiving key recommendations.

In a letter to the responsible minister for charities, Andrew Leigh (pictured), this week, the RSA asked whether the government would formally support the Productivity Commission’s 2024 recommendation to remove Basic Religious Charities (BRCs) from the nation’s charities system.

Two years ago – on 10 May 2024 – the Productivity Commission handed the government its report from its Future foundations for giving inquiry.

Typically, governments table their responses to such reports in the houses of parliament, but the Albanese government is yet to do so.

Among the recommendations, the Productivity Commission called for removal of the BRC category from the Australian Charities and Not-for-profits Commission (ACNC) Act 2012 so as to  “enhance regulatory consistency and public transparency”.

The Productivity Commission said it “could not identify a policy rationale that justifies retaining” BRCs.

BRCs – organisations with charity status for ‘advancing religion’ – enjoy exemptions to the governance standards and financial reporting requirements that apply to all other charities, even to some religious organisations that do not have BRC status.

The Productivity Commission also recommended removal of: Deductible Gift Recipient (DGR) status for religious education activities in government schools and all activities for the purpose of ‘advancing religion’; plus removal of DGR status for school building funds, as donations to such funds overwhelmingly benefiting the wealthiest (mostly faith-based) private schools.

As the RSA reported in September last year, Senator David Shoebridge sought answers from the government on who was tasked with working on a response to the report and why it was taking so long.

In his letter this week, RSA Executive Director Si Gladman said the government needed to adopt the Productivity Commission’s recommendations relating to BRCs to help restore public trust and confidence in the charities system.

He urged Dr Leigh to also listen to the charities regulator, the ACNC, on the issue.

On several occasions in recent years, the ACNC has publicly stated that the exemptions for BRCs may be reducing public trust and confidence in the charities system.

Last year, in a submission to the Victorian parliamentary inquiry into cults, the ACNC said that the “differences between the obligations” of BRCs and other charities “could impact … the public’s trust and confidence” in the charity sector.

The ACNC added that some religious charities’ exemptions to reporting requirements and governance standards “significantly impacts” its ability to act when public concerns are raised about charities.

According to ACNC data from last year, Australia has 13,872 charities registered for the purpose of ‘advancing religion’, with 7,742 of these being charities self-identified as BRCs.

Although it has not tabled its full response to the Productivity Commission’s report, the Albanese government has been announcing separate policies in response to the inquiry.

In response to Senator Shoebridge’s questions last year, Treasurer Jim Chalmers said the government had agreed to: remove the condition that a gift to a DGR gift be valued at $2 or more before the donor may claim a tax deduction; and align and increase the minimum annual distribution rate for public and private ancillary funds.

Upon the public release of the Productivity Commission’s report in mid 2024, Dr Leigh swiftly rejected the recommendation that DGR status be removed for school building funds.

In a speech in 2024, Dr Leigh said the government would be taking its time to respond to the report as it “wanted to allow a reasonable window for a direct conversation with the sector as we consider its recommendations”.

Religious lobbyists responded angrily to the Productivity Commission’s recommendations, describing the independent research and advisory body as having “a clear anti-religion agenda” and as having mounted a “direct attack” on faith communities.

We are actively campaigning for reform of the charities sector. Follow our campaign updates here.

If you want to support our work, please make a donation or become a member.

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