Motivated by dreadful personal stories from former members of Scientology, Senator Xenophon has drafted the Tax Laws (Public Benefit Test) Bill 2010. The Economics Committee of the Senate is taking submissions from the public on this bill.
The central idea of the bill seems to be to replicate the British Charities Commission public benefit test.
This test determined that Scientology was not eligible for tax-exempt status. The Commission argued Scientology's central practice of “auditing”, where an operative encourages a member to pour out all the details of their life while being attached to a device like a lie detector was not a “worship” ritual - a central characteristic of religion. Second, there was significant public disquiet about Scientology in Britain.
The fact this bill and Senate inquiry is happening at all could only be explained by internal machinations between the various political parties represented in the Australian Senate. The bill and its inquiry must be a trade-off for some benefit the government is receiving from the independent and Greens members.
Neither the Labor Government nor the Liberal-National Coalition (with some dissenters) would want a bill like this to proceed and become law because it is a potential Pandora’s box. It threatens to throw into question the legitimacy of the tax-exempt status of other religions in Australia, for, in attempting to set additional criteria for tax-exempt status, it is impossible to have those criteria apply to only one religion. By extension, the bill opens a window into how the Australian political system itself is controlled by political parties who surrender to religion in order to ensure their re-election. More of this below.
The Explanatory Memorandum to Senator Xenophon’s bill glosses over the facts of the tax-exempt status of religion which are:
- All religions that have a supernatural belief, a congregation, with rituals, a building, paying stipends to a minister or someone equivalent, are eligible for tax-exempt status in Australia. Other organisations that “advance religion” in comparable ways are also eligible, such as organisations that produce and sell Bibles.
- All religions are legally charities. To “advance religion” has been deemed to be of public benefit since the 17th century. The Tax Office makes a determination when a religion applies for tax-exempt status as to whether it meets the definition of religion. That definition came from the 1983 High Court case which involved Scientology itself: Church of the New Faith v Commissioner for Pay-roll Tax (Vic) 1983.
- Briefly, the Court held that religion is any belief in a supernatural being, thing or principle and canons of conduct (rituals) that give effect to that belief. Senator Xenophon’s bill aims to narrow these yawning goalposts to bring in a public benefit test, presumably, as noted, along British lines.
In his Explanatory Memorandum Senator Xenophon says a Public Benefit test would include the following principles:
- there must be an identifiable benefit arising from the aims and activities of the entity;
- the benefit must be balanced against any detriment or harm; and
- the benefit must be to the public or a significant section of the public, and not merely to individuals with a material connection to the entity.
I disagree with this kind of language completely. It is not the role of the Commonwealth of Australia to decide whether religion is a public benefit to citizens. That idea is rooted in 17th century thinking that is no longer appropriate in the 21st century.
Religion is a private matter for citizens not a public matter for the Commonwealth. Were there a constitutional separation of church and state in Australia and Britain one would argue that as a matter of logic there should not be tax exemption for religion at all.
Equally, it should be the case that atheist, humanist, rationalist and related organisations should not be eligible for tax-exempt status under the other main justifications for this status: the advancement of education and the advancement of science.
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