Time to Address Charities for Indigenous Peoples

Australian indigenous people face difficulties establishing difficulties

The introduction of a charity regulator is an opportune time for Australia to follow New Zealand’s lead and recognise the difficulties faced by indigenous peoples who wish to establish charities, a Not for Profit Law Conference has been told.

Taxation Charity Law Expert and senior lecturer at the University of NSW, Fiona Martin was speaking at the Charity Law Conference in Melbourne under the title of Defining, Taxing and Regulating Not-for-Profits in the 21st Century.

“In Australia the common law poses a legal barrier to the establishment of charities for the benefit of Native Title Groups and Traditional Owners who are defined in accordance with their traditional cultures and practices which often involves family relationships,” Martin said.

“New Zealand followed the common law on this issue until it reviewed the taxation of Maori organisations in 2001 and subsequently amended the law relating to charities.”

Martin says the common law requirement impacts disadvantageously on entities for indigenous Australians where the beneficiaries are defined through family or clan relationships.

“Even though these entities meet all the other requirements for charitable status they may fail the public benefit test due to the close family relationships of their beneficiaries. This is particularly the case where the entity in question holds traditional land for a family or ‘clan’ of indigenous Australians.

“The definition of charitable purpose in New Zealand’s income tax legislation and Charities Act has been amended to broaden the definition of public benefit to allow for beneficiaries connected through a family relationship.

“The aim is that as long as the organisation satisfies the other requirements for a charity apart from the blood relationship, it is able to achieve charitable status.

“This amendment therefore recognises within New Zealand that a blood-tie relationship by Maoris seeking to engage in charitable activities beneficial to their particular community should not be a barrier to receiving the income tax exemption granted to charities.

“I argue that Australia should also amend its income tax legislation to allow that a blood relationship does not prevent the public benefit test from being complied with.

“Such an amendment would be simple to enact and already has legislative precedent. In 2004 as a result of the National Inquiry into the Definition of Charity the Federal Government enacted the Extension of Charitable Purpose Act 2004 (Cth). This legislation deems a public benefit for self-help groups and closed or contemplative religious orders provided that these groups have a charitable purpose.

“It would require a similar short legislative instrument to deem the public benefit for all organisations even though there is a blood connection.”

Martin says i t would then be open to the new charity regulator, the ACNC to publish guidelines regarding how this provision will operate.

“In this way the family connection barrier could be reduced but the revenue protected,” Martin said.