Australian Presbyterian World Mission (Vic.)          	  
 Convener: Rev Phil Simmonds
6 Asquith Place, 
	                                                                                                    Melton Vic 3550
                                                                                                               Phone: (03) 9747 8195  
Email: p.simmo@iinet.net.au

                                                                                         Secretary: Bill McDonald            
                                                                                                         66 Circle Drive Nth.
                                                                                                          Cranbourne
                                                                                                    Phone: (03) 5996 2824
                                                                            Email:w.mcdonald2@bigpond.com

Submission regarding:

Exposure Draft – 
‘In Australia’ Special Conditions for Tax Concession Entities

11 August 2011

Brief Description of Organisation 
Australian Presbyterian World Mission Victoria (APWM Vic), a committee of the Presbyterian Church of Victoria, endorses, encourages and facilitates members of the church who go to serve others less fortunate than themselves both in Australia and in many countries around the world. 
Their work is almost entirely developmental work rather than aid, and therefore has long term outcomes. If this work was not undertaken it is probable that another government would have to be involved financially.
Our members work as volunteers, most without a guaranteed income. They first seek sponsorship from individuals and entities to enable them to live and work where they offer their services. We have members working in literacy, medicine, education and skill training, aviation, community support and development, all contributing in a significant way to the wellbeing and development of those in the communities they live among and assist. 
 
Concerns
The Exposure Draft appears to encourage the belief that charity ends at home. Many Australians have been generous with their time, talents and income towards less privileged or needy people overseas throughout the last century and continue to be so in this century too.
Professional advice suggests the exposure draft will have the following impact on APWM Vic:
The Exposure Draft legislation will remove income tax exemption for most Australian overseas missionary organisations and any churches or exempt organisations that  provides funds to assist them. 
If Presbyterian churches or their members within Australia donate any money to another entity that is not tax exempt, such as an entity whose members work overseas, or a community project in another country, then the Presbyterian church that provides those finances will lose its own tax exempt status, unless the recipient organizations meet the limiting requirements stipulated by the Exposure Draft.
Many Presbyterian church members donate money given from wages and salaries from which tax is paid. These members donate to churches and to support the work of church members who work in a voluntary capacity with entities that provide humanitarian assistance in many countries around the world, mostly among needy people. Such gifts from moneys on which tax has been paid should not be taxed again as income belonging to an entity that would lose its tax exempt status for sending gifts to overseas entities enabling them to assist communities in beneficial ways.
Such a practice would adversely impact upon members of APWM Vic who are currently working in a variety of roles around the world:
One family works as volunteers in association with Orbus, an entity in Malawi run by caring Malawians who run a day care orphan centre for children orphaned because of AIDS. The centre has been established through the generous gifts of Australian church members who have sent goods and volunteered their time and effort to train local people. They have established a group there to run the entity. Orbus and the church members there are supported by freewill gifts both from interested Presbyterian churches and members of the church at large who send gifts through the church. 
Other members of APWM Vic are working overseas as volunteers training community people in skill areas such as operating computers, basic IT, and building competence in the use of different mainstream software. Others are literacy specialists whose focus is assisting rural communities to foster literacy in their own languages. They have also provided assistance to government education systems to train teachers for local communities to develop capacity and sustainability for ongoing literacy in the local communities. 
The new “in Australia” test requires an NFP to “operate principally in Australia” and “pursue its purposes principally in Australia”. 
There are many ways in which our members, working around the world as volunteers both individually and aligned with different entities, such as those mentioned above, would be hampered if tax deductable status was denied to entities which support such humanitarian, often developmental work overseas to any significant extent. Any current tax exempt groups would be unable to continue forwarding funds, as they do now to support such entities who make a valuable contribution to small communities without losing their tax exempt status.
Many Australian churches like to establish a relationship with overseas churches, or church groups to assist them in practical ways. This enhances a positive world view among members of these entities across the globe, and often provides opportunities of significant benefit to those involved. A mechanic from Victoria has visited a community in Malawi. Now after several visits in which he enhanced the skills of those who repair cars to not only do a much better job but see their work as much more valuable, they show an increase in competence and have become more respected in their community. 
In one poorer Middle Eastern country one group from Australia has been teaching English for more than 10 years, and now their students are working as translators for tourists, and others have entered European and East Asian universities to study in English. These are examples only, of great advances made by our Australian workers who operate in voluntary capacities with maximum finance into the project they are running.
APWM Vic has both a focus in Australia and overseas. APWM Vic donates money to several overseas entities to assist them run training colleges and provide scholarships for students. APWM Vic and other entities in the church forward funds to assist individuals who live and work overseas with other entities. The intent to remove tax exemption for any organizations with significant overseas operations or control, which are established to benefit non-Australians would significantly impact on the ability of APWM Vic, through the Presbyterian Church to continue effectively to disburse funds to the above entities and our members who work as volunteers with them, without this church losing its tax exempt status.
We recommend that as we live in an ever increasing flat world with an increasing population and escalating level of needs for assistance, entities that offer to assist others in ways that enhance life and the well being of disadvantaged people be facilitated to do so, and not limited by financially restricting legislation such as the proposals restricting tax deductable status to those operating principally in Australia as in the Exposure Draft. 
We believe that most gifts given to support our members who work with mission agencies overseas have been given by people who give directly to the mission agency or through churches who forward the gifts, and do so from income on which tax is payable in Australia. Taxing those funds again as income belonging to APWM Vic would significantly decrease the funds and limit the benefits achieved when those funds are used to benefit others.

Recommendation
(1) that the new law retains exemptions for all prescribed institutions listed in the current regulations.
(2) a minimum threshold for donations to entities without income tax exempt status should be introduced into the legislation. 
(3) that the compliance relating to an entity’s tax exempt status be more realistically stated so the level of absolute perfection that few if any entities could achieve consistently over many years, is not the benchmark.

Respectfully submitted,
Phil Simmonds
Convenor Australian Presbyterian World Mission Victoria.