The purple economy

In 2004, the Vatican launched a global diplomatic campaign for the recognition of Christianphobia. The need for such a campaign, according to the sponsor of the UK Parliamentary debate on the issue, was, “the relentless assault on the nation’s much loved Christian heritage. It’s about how anti-Christian sentiment is increasing.” Not a day goes by in Australia, says a Christian leader, “where the faith is not being bashed, pilloried, mocked, attacked, and dragged into the mud”.

The church has persuaded itself, that not only is it losing its faithful by the pewful, but under attack by secular and atheistic forces, it is losing the support and protection of the State. In fact, this so called attack is an extremely effective strategy by the church, not only to divert attention from itself, but to strengthen the state’s support for the church.

In terms of the evangelistic mission of the church, the support from the state has never been greater. Australian churches in fact, have never had it so good.

At a time when the pew and the pulpit are emptying, the church at another level is booming. Never in Australian history, have so few Christians received so much recognition, protection and cash from taxpayers, ratepayers, corporations and governments. Never has there been a time, when the church has held and traded so much property,mananged such extensive investment portfolios and banks, and created such a diversity of profit making businesses.

Never before have there been so many exemptions for churches, everything from, “GST, income tax, fringe benefits tax, land tax, stamp duty, payroll tax, car registration, to property rates”.

It’s not then Christianphobia that’s the problem for the church, but the increasing taxpayer concern, frustration and anger, as to why they should continue to protect and further fund, not only the church’s preaching, but also its company profits.

The church gets away with this, because so little is known of the extent of the church’s wealth and whether or not it could be doing a whole lot more in paying its way. The churches, and its study centres, such as the Australian Centre for Christianity and Culture, show no interest in such transparency. The Australian Centre received a $5 million start up gift from the Federal Government, so its hesitancy is understandable!

Only journalists and the media provide the occasional glimpses:

• a dossier was published on “Salvation Inc. the nation’s biggest and wealthiest charity” (The Australian, June 22, 2001);
• in 2005, it was reported that the nation’s financial regulators were going after the church, “Watchdog to put bite on God’s banks”(The Australian, October 28, 2005); and more recently
• Renton’s, “Taxpayers’ sacrifice to the churches”, filled in a few more gaps (The Age, May 6, 2008).

Probably the Business Review Weekly has provided the best monitoring and analysis of the church’s business dealings: “Charity Inc.” (March 24, 2005); “God’s Millionaires” (May 26, 2005); “God’s Business, taking advantage of lax taxation regulations” (June 29, 2006).

In short, the church appears more interested in value investing and minimum variance portfolios than up front transparency.

But up until now, there has been no overall analysis of the wealth of the church and its insatiable demand for even more of the taxpayer’s dollar. Wallace’s recent book, The Purple Economy Supernatural Charities, Tax and the State, is a must read for those concerned with the increasing state investment in the church. While the black economy is well known and illegal, the purple economy is largely unknown and legal.

For Wallace, the purple economy is, “the wealth generated by the eternal mass exemption from taxation of supernatural organisations, their subsidiaries and their charitable arms”. According to Wallace, “the sums that have been lost to revenue up to now through supernatural charity tax exemptions, and that will be lost into the future, are many billions”.

His is a powerful argument for scrutiny and change.

First, churches are changing. Losing members to the point where some will disappear, they desperately and eagerly grab hold of any cash, grant or tax protection on offer. Note the eagerness in which the latest handout in the form of school chaplains was appropriated.

Calls for inquiries into the funding of secret and abusive churches which teach in their schools the subjugation of women, creationism as science and how to avoid voting, is not Christianphobia.

Why should the church demand that the Australian Defence Force fund the training of its clergy, or Centrelink be used to support Mercy Ministries, in which damaged women must begin by “identifying patterns of sin in the past generations of their families”?

When the Catholic Church demands of taxpayers more than a $100 million to fund evangelistic crusades, cathedral tagged indulgences, and an affirmation of “the importance of the universal church and the person of the Pope”, it should not be surprised that it causes anger in the community.

Priests and pastors are changing: they appear to have no shame or any civic responsibility. Renton notes that the Tax Assessment Act, “gives total exemption to fringe benefits given to employees who are religious practitioners”. This in turn means that, “as there is no cap to this, some churches use remuneration packages that consist of nil salary and 100 per cent fringe benefits”, which in effect can create “an unwarranted entitlement to social security benefits”.

How many parishes and priests are manipulating the system in this way? Why should a pensioner struggle to pay her council rates, while her next door clerical neighbour deftly avoids them?

Wallace notes a further change which should mean a rethink of the state’s investment in churches. At no time in Australian history have churches been so creative in the management of their finances and so entrepreneurial in their business activities. He notes that, “the Catholic Church does not consolidate its accounts and it is in their interest not to do so. It has 200 religious orders which control assets worth tens of billions of dollars”.

Church assets across all denominations now include car parks, agri business, office buildings, insurance companies, travel agencies, record companies, banks and residential apartment towers.

Who would know that ACS is actually Australian Christian Services, which is a wholly owned company of the Pentecostal churches, dealing in everything from cash management, car leasing, home loans and business insurance? Or that Bethel Funerals is owned by Word Investment Ltd, which in turn is a company of Wycliffe Bible Translators?

It’s not Christianphobia, when Kellogg’s complains of the competitive advantage of Sanitarium, a wholly owned company of the Seventh Day Adventist church. All such companies are in direct competition with other parts of the private sector, but are protected by a series of tax exemptions, not available to their competitors.

Religious groups according to the Business Review Weekly, “are the hidden giants of the economy. In an era of corporate regulation, they are virtually unaccountable” (March 24, 2005).

In the past decade, for example, the Uniting Church has sold 52 churches, and expects “to sell more than 350 properties in Victoria and Tasmania alone, over the next forty years”. Such wheeling and dealing of property, by all churches, has seen them become “a new breed of land-developers, selling off open space as well as buildings for commercial exploitation”.

Enough is enough, according to Wallace. Direct funding, tax exemptions, with little or no regulation, together with a deliberate strategy of non transparency of church finances, makes for a political-religious complex, which “plays a significant and ominous role in Australia’s political and religious life”.

Churches need to understand that the demands for accountability and transparency, taxation reform, and for an Australian Charities Commission, will continue, and it will be futile campaign to label such demands as Christianphobia.