31 Chapman Street
CHAPEL HILL 
QLD  4069

Ph 	+61 7 3378 3702
Fax	+61 7 3378 3702
Email	director@su.org.au
ABN:    53 681 642 927
ARBN: 098 895 982

May 29, 2012
Manager
Philanthropy and Exemptions Unit
Personal and Retirement Income Division
The Treasury
Langton Crescent
PARKES ACT 2600

Submission regarding the Exposure Draft for legislative relating to the 

‘In Australia’ Special Conditions for Tax Concession Entities

Scripture Union Australia
 
Scripture Union Australia is a federation of Not-for-Profit Christian based Community Development Charitable Agencies whose work is primarily with young people and families within each state and territory.  Our work includes training and resourcing over 7,000 volunteers per year to serve our communities.  Our programs include school camps, state school chaplaincy, working with ‘at risk’ young people, community based school programs and free community holiday programs.  
Scripture Union in Australia is part of an international movement with operations in over 130 countries, many of which are in very poor parts of the world.  As part of our membership of the worldwide network of Scripture Union, and our commitment to making the world a better place, our organization partners with our affiliates in the Pacific nations to help develop a range of services including student led and designed, school based AIDS prevention education initiatives, literature development, and community based camping programs.  We have done this through visits, training, provision of equipment and finances. This support is provided through the generous donations of many thousands of taxpaying citizens who have a concern to see that children, young people and their families in Australia and the wider region have the benefit of quality services such as are provided by Scripture Union. 
Our Concerns
While we recognize that there may be legitimate reasons to consider changes due to some risks associated with the way the current laws are interpreted, (as per 1.5 and 1.6 in the Explanatory Material document) we believe that there may also be some unintended effects that will work against the aim to “ensure the proper operation of not-for-profit entities and their use of public donations and funds.” 
Professional advice we have received suggests the exposure draft, if adopted, will have the following impact on Scripture Union throughout Australia.
Under the proposal as it stands, in order to retain tax exemption for the benefit of our work ‘in Australia’, we would no longer be able to contribute from donated income, derived from taxpaying Australian citizens, to support Scripture Union work in the Pacific and beyond.  This requirement would be at odds with our obligations as part of the worldwide work of Scripture Union as described above. This also would be to fail to honor the wishes of the donors who have already paid taxes on the earned income and it would be to the detriment of the poorer nations in our region for whom we in Australia have a responsibility. And it would be at odds with the high value placed on philanthropy which at this time is being promoted and with good reason. 
Alternatively if we continued our practice of supporting these overseas activities we would risk losing our tax exempt status, and therefore other concessions such as Deductible Gift Recipient status and Fringe Benefit Tax concessions, which in turn would require us to severely curtail the services we provide in Australia. In so doing the community and the Government would be denied much of the services that enrich the community life of many ordinary Australians and their communities. And this would be at a time when the evidence suggests that such services are in unprecedented demand and are sorely needed in our nation.
 Tax exemptions and related concessions are an important part of enabling our agencies to perform their services ‘In Australia’, as well as to support those related organisations that provide a valuable service to our economically disadvantaged neighbors.
It appears to us that the intention of the proposed changes is to effect the status of charitable agencies, whose principal work is conducted ‘In Australia’ but who provide modest support to poorer nations and underfunded international programs, resulting in those charitable agencies being deemed ‘for profit’ in relation to taxation. We urge the framers of this Exposure Draft to consider that the impact of the provisions as regards the real cost to the wellbeing of Australians, and to the supported nations, will be much greater than the value of the revenue that would be gained by the Tax Office.
Recommendations
1.	We are aware of the intention of the Australian Government to establish a single Independent Regulator to be known as the Australian Charities and Not-for-Profit Commission (ACNC). We applaud this initiative and strongly urge the Government to establish this body before it proceeds with the reform of the Taxation Laws. This would seem to us to more adequately and fairly facilitate the reform agenda in due course. 

2.	We request that any new law retains exemptions for all prescribed institutions listed in the current regulations. We believe that these are an efficient, safe and necessary vehicle for the forwarding of donated funds to work overseas in line with donors’ intentions.

3.	We believe that a minimum threshold for donations to entities without income tax exempt status should be introduced into the legislation.  

Thank you for your consideration of this submission

Lloyd Carter
SU Australia
National Director