Government Inquiry into Register of Environmental Organisations: Submissions and Hearings

Thursday 16 July 2015 @ 11.06 a.m. | Taxation | Trade & Commerce

We have previously reported that on 26 March 2015 the House of Representatives Committee on the Environment (the Committee) adopted an inquiry referred by the Environment Minister, Greg Hunt, asking the Committee to inquire into and report on the Register of Environmental Organisations (the Register) (see Government Inquiry into Register of Environmental Organisations).

With final submissions completed by 21 May 2015, that inquiry has now moved into the consideration of submissions and public hearing stages and some of the response to the Committee's inquiry makes for interesting reading and debate.

First a Recap

The Committee is to inquire into and report on the administration and transparency of the Register and its effectiveness in supporting communities to take practical action to improve the environment. In doing so the Committee was to have particular regard to:

  • the legislative definition of an 'environmental organisation' in the Income Tax Assessment Act 1997, including under Subdivision 30-E;
  • requirements to be met by an organisation listed on the Register and maintain its listing;
  • activities undertaken by organisations currently listed on the Register and the extent to which these activities involve on-ground environmental works;
  • reporting requirements for organisations to disclose donations and activities funded by donations;
  • administration of the Register and potential efficiency improvements;
  • compliance arrangements and the measures available to the Department of the Environment and the Australian Taxation Office to investigate breaches of the Act and Ministerial Guidelines by listed organisations; and
  • relevant governance arrangements in international jurisdictions, and exploring methods to adopt best practice in Australia.

The Crux of the Matter

From current reporting of the submissions and of the evidence given at Committee hearings, the inquiry and the issues are evolving into  a confrontation between:

  • mining interests supported by government, who argue that, taxpayer's should not be indirectly funding politically active organistaion, like Green Peace for example, as a result of  giving them the same tax deductible status for donations as a more standard charity; and
  • environmental interests who argue, as Greenpeace boss David Ritter has been reported, that it is Greenpeace's job to challenge the world's worst environmental crimes and that certain acts of civil disobedience do amount to the protection of the environment just as much as the more passive on the ground activities of organisations like Landcare and other natural resource management groups.

In its report of the submission of the Minerals Council of Australia, the Australian reports, chief executive Brendan Pearson's alleges that a “significant minority’’ of environmental organisations are breaching the law in their use of tax-deductible donations and had “persistently committed or encouraged behaviour that is unlawful or contrary to public policy’’. Some had “undertaken or funded politically partisan activity’’ or established and promoted activities that return a profit to these organisations. One organisation mentioned in this respect in the submission, was the Leard Forest Alliance which has, through a spokesman, said in reply that it “does not and has not solicited donations that are tax-deductible to pay for activist fines’’ and does not have tax- deductible status.

Also reported is Rockhampton-based Senator Matt Canavan who is reported to be calling for Federal Government action against environmental organisations that break the law or run "political" campaigns. He is reported as having made a submission to the Committee and saying after appearing at the Brisbane hearing of the Committee that:

". . . environmental organisations should be audited and stripped of tax-deductibility status for public donations if they ha[ve] broken the rules, . . .
Sabotaging the economy, destroying jobs and putting Queensland families out of work should not be tax-deductible".

The Senator's view is that:

"It is time for more stringent requirements on registered environmental organisations. This does not amount to an 'attack on democracy': democratic rights don't extend to requiring taxpayers to unwittingly fund political debate and activity. Free speech does not necessitate free funding."

An interesting counter to the above views is an article posted to the newMatilda website in which it reports the view of The Law Council of Australia in its submission, which takes a very different view, arguing that advocacy activities are legitimate and valuable in protecting the environment:

“Advocacy activities [should] continue to be recognised as legitimate activities undertaken by environmental groups to protect the environment, . . .”

The Law Council submission in fact, is reported by newMatilda as recommending in its submission that the government should:

“. . . broaden the scope of legitimate charitable activities for environmental organisations . . .” because “. . . activities that can be characterised as seeking to protect the natural environment are not limited to those that involve physical on-ground works . . . In particular, education activities, advocating for effective regulation of activities that may impact on the environment, and providing legal advice and representation in respect of environmental law matters can be activities directed to the achievement of protection of the natural environment.”

The Law Council's points reported above are also reflected in The Australia Institute submission which stated that:

“. . . in contrast to the activities of environment groups, which often deliver clear public benefit, tax-deductible lobbying from the mining industry tends to work against the public interest . . . These organisations provide a counterpoint to the hundreds of millions, perhaps billions, of dollars spent on lobbying by the mining industry in recent years”.

The Australia Institute report also draws attention to an interesting anomaly in the mining industry's views with respect to the inquiry, namely that, while it lobbies for the interests of the tax payer in respect of environmental organisations registered as charities, it fails to recognise that "lobbying" is also tax deductible and a cost to the taxpayer:

". . .  The mining lobby’s concern for the taxpayer comes at a time when tax avoidance by mining companies has been attracting headlines and featuring in other parliamentary inquiries. Ironically, spending by mining companies on lobbying activities is also tax deductible".

What Next for the Committee?

If reports of Queensland National Senator George Christensen's tweet, after public hearings of the Committee on 14 July 2015, as reported on the ABC AM program (15 July 2015) are an indication, it is likely this area of the tax law will be subject to change not favourable to many environmental organisations following only the Committee's report. The Senator who is sitting on the Committee is reported to have tweeted after the days' hearings to two environmental organisations appearing at the hearing that it was:

"Time to get the donations in. I can't see it continuing longer once we report." 

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