From: Leanne Shire
Sent: Thursday, 18 August 2011 5:49 PM
To: NFP Reform Consultation
Subject: Tax Concession Entities - proposed changes
Importance: High

Dear Sir/Madam,

It has come to my attention that the Federal Government has recently announced major intended changes to the tax endorsement conditions for charities.

It is my understanding that these changes (specifically in Sec 50-50) will significantly affect churches and mission organisations to be effective in helping the poor and needy, and their ability to support people or organisations that work to help communities in third world countries.  There are a number of areas of concern:

•	The proposed changes don’t allow for churches and church members donations (raised from members who have already paid their income tax), to fund any overseas missionary program.  This is because there is 
no provision equivalent to the old section 50-50(d) relating to a prescribed institution that has a physical presence in Australia but incurs its expenditure and pursues its objectives principally outside Australia.
•	The failure to allow for prescribed institutions pursuing objectives principally outside Australia means every overseas department of a church in Australia will fail to qualify for exemption.
•	The proposed Sec 50-50(2)(c) [which requires that giving be to an exempt entity], means they will not be allowed to donate money to any other entity (including an individual missionary or group) as, by their very nature, the overseas entities to which missionary funds are provided will never qualify as an “exempt entity” within the meaning of the section.  This means that because the definition of “entity”, as the term is used in proposed 50:50(2)(c), includes an individual, it means that any church wishing to support one of their number going overseas for missionary work will now, as a whole church, lose their exemption status.
•	While many churches do not seek DGR status, the relief of poverty is, and always has been, integral to the church and the proposed measure will remove its ability to lawfully help the poor if it wishes to maintain its exemption.  For example, under the proposed changes a church giving a donation to a needy person who walks in their door in Australia, will place at the risk the exempt status of the church on the basis of proposed Sec 50-50(2)(c).  This is also true of charity organisations who provide funds, services or programs for the relief of poverty and hardship. 

The inclusion of proposed Sec 50-50(2)(c) in its current form, and the exclusion of the previous Sec 50-50(d) provision, will seriously damage the lawful charitable ends of our churches and mission organisations purposes.
 
I would appeal to those who are considering these proposed changes that a provision with a similar effect to the existing Sec 50-50(d) be included in the measures.
 
I would also ask that the proposed Sec 50-50(2)(c) be amended to read as follows
 
“(c) except for charitable purposes (whether or not within Australia), not donate money to any other entity, unless the other entity is an exempt entity

Churches and mission organisations make a significant contribution to society, both here and overseas, and without proper consultation with experts within these types of entities, I believe that the changes in law will have a profound negative effect on society that I am sure is unintended.  I would encourage you to fully support the Australian people who give their money to help others, through churches and organisations.

Thank you for your consideration of these matters.

Yours sincerely

Leanne Shire
Southport, Qld, Australia

On behalf of the churches and charity organisations that support our needy here and overseas.