SENATOR DEAN SMITH
SHADOW ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY
SENATOR FOR WESTERN AUSTRALIA
MEDIA RELEASE
1 November 2024
LABOR WITHOLDS INFORMATION FROM NOT-FOR-PROFITS INQUIRY
The Albanese Government sat on documents relating to its bungled implementation of tax reporting rules for not-for-profit organisations – deliberately denying a Senate Inquiry access to them.
An Order for the Production of Documents, moved by Senator Dean Smith and agreed to by the Senate on 20 August, required the information – including correspondence between Assistant Charities Minister Andrew Leigh’s office, the Australian Taxation Office and the Australian Charities and Not-for-profits Commission – to be supplied by 10 September.
Labor failed to comply until yesterday, the same day that the Senate Economics Committee was finalising its report following an Inquiry into the issue.
This tactic prevented the Committee from considering the documents in its report and makes a mockery of the Albanese Government’s alleged commitment to both the future of the sector and Parliamentary transparency.
The Inquiry, which held a public hearing in Canberra last week, was formed to investigate the roll-out of new tax obligations for non-charitable not-for-profits that require them to complete a tax return to retain their tax-exempt status.
It was established by Senator Smith on behalf of the Coalition, following serious concerns raised by the sector about the Government’s flawed efforts to implement the policy.
The Committee also learned through ATO evidence that Assistant Minister Leigh’s office had sought and received a verbal briefing on these matters on 14 March, followed up by written information.
It means that Dr Leigh and his team fully understood both the poor progress of the roll-out and the challenges the sector was experiencing – and did nothing to address either.
The Inquiry report, released today, found significant inconsistencies between the ATO and Government’s view of how the rollout and associated consultation has been performing and the almost overwhelmingly negative experiences of stakeholders.
Of the estimated 155,000 not-for-profits affected, approximately 11,000 have so far lodged their tax return – or 7 percent.
This falls dramatically short of the 83 percent target for the 2023-2024 financial year the ATO set itself for ordinary tax returns and betrays the information and logistical challenges faced by organisations in meeting the new requirements.
The report also noted the significant administrative burden the changes are placing on what are often small, volunteer-run groups and that this burden is disproportionate to the potential tax risk they pose – all compounded by inconsistent advice provided by the ATO and ACNC.
It makes six recommendations, including introducing thresholds to exclude smaller not-for-profits, extending the deadline for lodging returns beyond the current 31 March 2025, and that the ATO and ACNC do a better job of practically consulting with the sector and harmonise the advice being provided.
Quotes attributable to Senator Dean Smith:
“The report findings were damning enough of the Albanese Government before the revelation it had been withholding important information from the Inquiry – but Labor’s conduct over the past couple of days says everything about it wrong priorities.”
“Thousands of small, community organisations are feeling unheard and under threat as they struggle with this bungled regulatory roll-out, and Andrew Leigh decides to play politics.”
“The implementation of this policy, which has obviously moved away from its original intent, has clearly been a failure and Labor cannot ignore it any longer.”
“I am hopeful that this is the wake-up call the Albanese Government needs and urge it to adopt the report’s recommendation in full.”
“If it doesn’t, and outcomes for the sector do not improve, the ramifications for many Australian not-for-profits will be catastrophic – and the community will pay the price.”
ENDS