From: Lloyd Woodrow
Sent: Thursday, 11 August 2011 10:28 PM
To: NFP Reform Consultation
Subject: Submission - Exposure Draft - 'In Australia' Special Conditions for Tax Concession Entities

Manager
Philanthropy and Exemptions Unit
Personal and Retirement Income Division
The Treasury
Langton Crescent
PARKES ACT 2600
Dear Sir
 
Submission re Exposure Draft - 'In Australia' Special Conditions for Tax Concession Entities
 
I am writing to you in regards to the recently announced proposed changes to the Income Tax Endorsement Conditions for charities.
I am deeply concerned by these changes as I beleive it will severely affect the way in which churches are able to support those associated with them who are working outside of Australia. 
Many of the funds which are given to overseas missionaries and the programs they are involved with are received from donations by church members after they have already paid tax on their income. It could be said that church members are effectively pooling their funds through the local church to direct it to support such work as they collectively have a significant saty in where the funds are directed.
To seek to apply these proposed changes to the work of churches (or similar ultuistic organisations) will be grossly unfair and detrimental to the (non tax deductible) charitable work that is carried out by many of them.  
Whilst the majority of churches, including my own, do not seek DGR status as Public Benevolent Institutions to attract tax deductible giving for the relief of poverty, misfortune, helplessness etc they all, to some considerable extent, operate to provide such benevolent relief. This relief, that goes largely unnoticed, is integral to the mission of the Church and is financially significant to the state.  
It does not seem reasonable for the State to assert, on the basis of the structure of exemption legislation, that relief of poverty is only a function of society to be supported through an endorsed PBI or the state and not through a church. Relief of poverty is, and always has been, integral to the church and the proposed measure will remove its ability to lawfully do so if it wishes to maintain its exemption.
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 churches.
Perhaps these were unforseen circumstances not recognised in this initial drafting of the legislation. 
On the one hand, the law will continue to theoretically declare that the advancement of religion is a legitimate charitable purpose, but on the other hand these measures in particular will deny the churches the capacity to outwork the purpose and thus render it practically illegitimate in Australian society.
Also with respect to Section 116 of the Federal Constitution the Commonwealth shall not make any law for prohibiting the free exercise of religion.  Yet on the other hand it appears these proposed changes strike at the very ability of a religious organisation to freely exercise that right of free exercise of its religion something which the Commonwealth is prohibited from doing. 
Perhaps this proposed legislation could be considered to be in contravention of the Constitution.
Whilst I have principally focussed on the church, I have no doubt there are many non-religious organisations that will be similarly affected in their legitimate endeavours by this proposed changes. 
I believe that a provision with a similar effect to the existing Sec 50-50(d) must be included in the measures and;
that the proposed Sec 50-50 (2) (c) should 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”
Yours sincerely
 
Lloyd Woodrow
7 Fernan Court 
Murrumba Downs Qld 4503
email: lloyd4w@tpg.com.au