On 28 October 2011, the Assistant Treasurer, the Hon Bill Shorten MP, released a Consultation Paper regarding a new definition of “charity”.
The Consultation Paper proposes that the new definition be based on the definition adopted in the Charities Bill 2003. That definition of charity contained the following broad requirements:
• the entity must be a not-for-profit entity;
• it has a dominant purpose that is charitable;
• it is for the public benefit;
• it does not engage in activities that do not further, or are not in aid of, its dominant purpose;
• it does not have a disqualifying purpose; • it does not engage in, and has not engaged in, conduct that constitutes a serious offence; and
• it is not an individual, partnership, a political party, a superannuation fund or a government body.
The Consultation Paper raises a number of discussion questions about the above definition and other relevant issues.
One of the most important issues for Indigenous organisations arising is the requirement for the entity to be “for the public benefit”. The Consultation Paper recognises that an entity established to relieve poverty of native title holders may not meet the current or proposed public benefit test as it may only be providing benefits to native title holders who are members of the same family. This is a question that has raised difficulties for Indigenous organisations for some time. The Consultation Paper notes that the definition may need to be modified to deal with this issue and invites submissions to address the question of whether changes should be made to the Charities Bill 2003 to ensure beneficiaries with family ties (such as native title holders) can receive benefits from charities.
Another important question raised in the Consultation Paper is whether a charity should be required to have an exclusively charitable purpose or whether it is sufficient for its dominant purpose to be charitable.
The Consultation Paper can be accessed at: http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=2161
Submissions must be lodged by 9 December 2011.