Believe it or not, Senate Inquiries can generate all sorts of humorous exchanges.
A hearing earlier this week into the Tax Laws Amendment (Public Benefit Test) Bill generated so much laughter at one point, you could be forgiven for thinking you were watching ‘Bill and Ted’s Excellent Adventure’ instead.
It went something like this. When discussing the impact of the introduction of a Charities Commission in New Zealand, the Church of Scientology’s New Zealand Secretary, Michael Ferriss, explained that the organisation’s income of $2.623 million in 2007 fell to $374,000 the following year because of, “from memory, the exchange rate drop”.
That’s right, apparently the Church of Scientology’s New Zealand arm dropped $2.25 million in income in just one year because of a bad Kiwi dollar.
Well, actually, the NZ dollar gained value on the US dollar, up from $1.46 to $1.30 between the 2007 and 2008 financial years.
The suggestion was ludicrous and practically everyone in the room knew it.
Rather, could it have had something to do with the fact that the New Zealand Charities Commission was established in 2005, meaning that organisations such as the Church of Scientology were then required to open their books for scrutiny?
It seems fairly logical – in order to justify why an organisation shouldn’t pay taxes, they should have to prove they deserve it.
Now, despite a fear a campaign from vested interests, the introduction of a Public Benefit Test as proposed in the Bill will not quash freedom of religion and won’t make things more difficult for charities.
The Church of Scientology is but one example of why the assessment of charities and religions by the Tax Office must include a transparent Public Benefit Test, and that the public benefit must be weighed against any harm the organisation causes.
On Monday, five former members of the Church of Scientology gave their personal accounts to the Senate Economics Committee.
These former members spoke about having a passport taken away from them so they couldn’t leave the United States headquarters; about the $1.2 million paid to the Church for ‘religious teachings’; how one woman was coerced into having two abortions and how she worked up to 70 hours a week for as little as $2000 a year.
Scientologists are entitled to believe or say, for example, that aliens from outer space have come here and been blown up in volcanos, if they wish.
But what is the public benefit that justifies taxpayers subsidising people being told that this is the cause of their problems?
Should Scientology ‘auditing’ sessions be regarded as providing a public benefit? They seem more like a cross between personal counselling and Maoist self-criticism.
And even if they do provide benefit to the individual paying for them (often at great cost) how is this of public benefit?
The Productivity Commission recently found that the tax-free benefit charities receive in relation to public funding is worth between $4 billion and $8 billion a year.
But under the current system, the ‘public benefit’ is presumed, but never really tested.
The Inquiry revealed that the Tax Office doesn’t have the resources to remove charitable or religious status from an organisation once it’s been granted, without court proceedings or Police investigations first taking place.
This is in stark contrast to the United Kingdom and New Zealand where their Charities Commission regularly reviews organisations to ensure they remain eligible for tax exemption.
The use of a Public Benefit Test in the UK and New Zealand has not been onerous on charitable or religious organisations in either country.
Here in Australia, the way the Tax Office determines tax exemptions for charities and religions is fundamentally flawed.
Former NSW State and Federal MP, Dr Stephen Mutch, who has assisted numerous victims of cults over the years, in particular former members of the Kenja cult, told the Inquiry about the discrepancies in the Tax Office’s current assessment.
The Raelian Movement, for example, was denied tax exemption status in Australia because they say they saw little green men emerging from spaceships.
Interestingly, they weren’t denied religious status because of the strange claim, but because they said they believed in something physical rather than having a belief of a spiritual nature.
So, if they had said that they believed in the spirit of little green men and not that they’d seen them, they too could be eligible for tax exempt status.
The Church of Scientology pointedly gave an opening statement to the Inquiry during which they said that only 19 Private Member’s Bills have been passed since Federation, implying that the chance of something happening with my Bill was unlikely.
But the fact is that the Senators from both the major parties, Liberal Senator Alan Eggleston and Labor Senators Doug Cameron and Ursula Stephens, who’s also the Parliamentary Secretary for Social Inclusion and the Voluntary Sector, took a keen and forensic interest in this Inquiry.
And with evidence that the United Kingdom and New Zealand Charities Commissions are working well, effectively and fairly, expect some real reforms here sooner, rather than later.
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