Nobbling the charities
It’s called the Statistical Return of Tax Deductible Donations, and every year at this time the federal environment department requires Australia’s about 600 registered conservation groups to fill it out. But this year it was different.
In previous years, it simply asked them to report the total expenditure from their public funds. This time, though, the government wants to know a great deal more. Among other things, it is demanding details of where the money was spent – whether within Australia or offshore, how much went to campaigning and advocacy, how much to legal expenses, and how much on “on-ground environmental remediation”.
The new demands are more than an exercise in trying to tie up pesky environment groups in a great deal more red tape, although they are doing that.
They are a fishing exercise – not backed by any legislation, yet – to lay the basis for stripping tax deductibility from green groups the government deems too politically active.
And they are part of a broader, multifaceted attempt to nobble the advocacy efforts not just of environmental organisations – although they are a focus of the Turnbull government and its big donors, particularly the mining industry – but the whole of Australia’s charitable sector. Moves also are afoot to cut off sources of funds, to silence them during election campaigns, and remake the body charged with regulating the sector.
There have been growing calls within the conservative parties to have green groups stripped of their tax-deductible status. In June 2014, for example, Tasmanian right-wing MP Andrew Nikolic brought a motion at the party’s federal conference to do just that, arguing that major green organisations, including the Australian Conservation Foundation, Wilderness Society and state environmental defenders offices, “engage in untruthful, destructive attacks on legitimate business and undertake political activism, which shouldn’t attract those very generous concessions from the taxpayer”.
The motion passed unanimously.
At the same time, other players closely associated with conservative politics, including right-aligned think tank the Institute of Public Affairs and the Minerals Council of Australia, were urging similar action.
In 2015, the government initiated an inquiry by the house of representatives standing committee on the environment into whether green groups should lose their Deductible Gift Recipient status if they engaged in advocacy or protest.
The committee went through the motions of taking submissions and evidence, but the result was a foregone conclusion. Indeed, some members of the committee trumpeted their findings before the inquiry began. During one inquiry hearing, Queensland Nationals MP George Christensen tweeted about cancelling tax-deductible status: “Time to get the donations in. I can’t see it continuing longer once we report.”
Sure enough, a majority of that committee recommended in May last year that the advocacy of these groups should be limited and at least 25 per cent of the budgets should be focused on “on-ground” environmental remediation work.
In other words, they should concentrate on cleaning up environmental messes rather than lobbying to prevent them happening. As David Crosbie, chief executive of the Community Council for Australia, the peak body representing non-profit groups, puts it: the change would see them “picking up the dead fish instead of advocating to stop the poisons going into the stream”.
The deputy program director at Greenpeace, Susannah Compton, attacked the proposal as an attempt to “turn environmental advocates into a clean-up crew for fossil fuel companies and the government”. She said it amounted to “a double hit” for taxpayers.
“First the government subsidises large fossil fuel companies through tax exemptions and grants that cost the taxpayer hundreds of millions,” she said. “Then they try to force charities to use the money given to them by the community … for cleaning up the fossil fuel companies’ mess.”
Subsequent to the parliamentary committee, the government commissioned an inquiry by the Treasury into the Deductible Gift Recipient status of other charities, not just environmental ones, which also recommended they be required to devote more resources to on-ground activities rather than advocacy.
“Indeed, the Treasury paper steps it up and talks about 50 per cent,” says Darren Kindleysides, director of the Marine Conservation Society, who passed on to The Saturday Paper the environment department’s letter demanding information from his organisation. “It amounts to an attack on free speech, to democracy.”
There is international precedent for this. In Canada, the right-wing Harper government attempted to close down environmental advocacy by auditing charity groups and insisting they spend less than 10 per cent of their time and resources on political advocacy. It was effective in muting the voice of civil society, but his Conservatives still lost the last election in a landslide.
Beyond these changes, is the second front in the Abbott/Turnbull government’s efforts to nobble charities: the changes to the operation of the Australian Charities and Not-for-profits Commission (ACNC).
The commission was established nearly five years ago by the previous Labor government as a watchdog on the sector, which turns over more than $130 billion a year. It was a badly needed reform. Before the commission, there was no accurate information of how many charities and non-profits Australia had, or how active they were.
With advent of the commission, however, charities were much more closely regulated. They were required to report on their activities, to different degrees depending on size. The commission has, according to almost all in the sector, been a great success. It has removed red tape and made it easier for legitimate charities to be established and to operate, allowed potential donors more transparency to see where their money is going, and has closed about 19,000 moribund, and in some cases crooked, charities. Sector leaders give much of the credit for that to an exceptional bureaucrat appointed to head it, Susan Pascoe AM.
But not everyone liked it. There was vigorous opposition to the establishment of the commission by conservative elements of the Catholic Church, led by Cardinal George Pell, who objected to the idea of a secular institution having insight into the operations of the church. There was opposition also from trust companies that administered charitable bequests from the rich, because it would reveal the size of the fees they took for their work.
Under Tony Abbott, the Coalition opposed the commission’s establishment and, once in government, tried to abolish it, a move strongly driven by the very conservative Catholic minster for family and human services, Kevin Andrews.
The attempt at abolition was defeated in the senate. The government finally abandoned its commitment to abolishing the commission in March last year, but relations have remained frosty.
The current minister with responsibility for the commission – the fifth since its inception – is the assistant minister to the treasurer, Michael Sukkar.
“Michael Sukkar is of that right-wing part of the Victorian Liberal Party, along with Kevin Andrews, that opposed the very notion of the ACNC,” Crosbie says.
“Sukkar refused to meet the ACNC for six months after he was appointed.”
In June, it was announced that Pascoe would not be reappointed at the end of her term as commissioner on September 30. Her departure will coincide with a review of the functions of the commission.
The news came as a shock to the sector. Pascoe was keen to stay on for at least an extra year, to see the organisation through the review. The commission’s advisory board wanted her to stay. Its chairman, Tony Stuart, who also is chief executive of UNICEF Australia, did some vigorous behind-the scenes lobbying. This was to no avail.
“Scott Morrison was not opposed to her staying on,” says the Reverend Tim Costello, chief advocate for World Vision Australia. “It was Sukkar and the Andrews/Abbott right-wing push that wanted her out. Having failed to defeat the commission, they want to change its terms.”
Within a week of the announcement, more than 100 organisations, working in areas as diverse as the arts, medical science, the environment and foreign aid, and including virtually all of the big charities, had signed a letter to the prime minister protesting the removal of Pascoe and expressing fears for the direction in which Sukkar was taking the commission.
“Failing this reappointment,” it said, “we would like you to ensure there is a transparent, fair and consultative process to appoint the best possible replacement. Given what has happened with Commissioner Pascoe, it is very difficult for the sector to have any confidence that the new appointment process will reflect the need for a strong, effective, independent charities regulator.”
The evidence to date has not allayed those fears.
“When they advertised the position, they had 25 applicants, including her two deputies and some other outstanding applicants,” Crosbie says. “They decided the field wasn’t big enough, so they have extended the process.”
The suspicion is that the applicants were deemed politically unacceptable, which is understandable, given that Sukkar is one of the hardest of right-wing warriors in the government.
To the extent that Michael Sukkar has any public profile, it is largely negative. He made headlines in June for publicly attacking judges of the Victorian Supreme Court as “hard-left activist judges” who were “soft on terror” and whose attitudes to the law had “eroded any trust that remained in our legal system”. He subsequently issued a grovelling apology, in the face of possible contempt of court charges.
Sukkar also made news for inviting Tony Abbott to address his local Liberal branch, which Abbott used as a platform to attack Malcolm Turnbull.
A few months ago, he was caught up in controversy around his involvement, along with others in the Victorian right of his party, including Kevin Andrews and the minister for environment and energy, Josh Frydenberg, in a body called the Deakin 200 club.
Fairfax Media reported in March on concerns that the “fundraising club linked to the hard-right of the Liberal Party is obscuring its donors by failing to make disclosures to the Australian Electoral Commission as required by law …”
The story went on to note: “With membership about $200 a year, the club also hosts regular fundraising events, attracting luminaries such as businesswoman and football identity Susan Alberti.”
Last week Alberti was appointed to the board of the ACNC.
Charity leaders have expressed concern about that, but of greater worry to the sector is a second appointment, a former tax partner with PwC, Peter Hogan.
Sukkar’s media release noted Hogan remained “actively involved on boards of listed corporations …”
It failed to mention what types of corporations. It omitted, notably, that he was chairman of a fossil fuel company, Carbon Energy, which specialised in mining unconventional gas and the technology of underground coal gasification, now banned for its pollution of groundwater, soil and air.
“So,” says Crosbie, “now we have a director of a company which is a member of the Minerals Council, which is driving the campaign to close down advocacy, with influence inside the commission.
“What concerns us is that they are planning to repurpose the ACNC to close down advocacy.”
Says Costello: “What they’re doing – stacking the board as vacancies arise – is really quite terrifying for those of us in the sector. We want transparency, not the closing down of advocacy or the nasty Minerals Council agenda.”
So to the third prong of the government’s attack: mooted changes to the Electoral Act. In response to legitimate concerns about the influence of foreign donations to political parties, the government has promised legislation to outlaw them.
But the Coalition wants to extend the restrictions on foreign money beyond political parties to include civil society groups. And many of the major charitable organisations, not only in the environmental field, but more particularly working with the provision of overseas aid, are international.
“We seek to raise public awareness about the value and importance of Australia’s aid program. We get overseas funding to do that,” says Marc Purcell, chief executive of the Australian Council for International Development.
Conversely, he says, “you have groups campaigning in overseas jurisdictions, using Australian money to try to effect change”.
“They want to curtail overseas donations to try to limit advocacy. Once you get to trying to constrain charities on the basis of their activities, I think it’s a slippery slope.”
In any case, Crosbie says, charities are “already more constrained and accountable than any other advocacy groups”.
The Charities Act forbids them from partisan political campaigning: they can take their arguments to the public on issues within their remit, but they cannot tell people how to vote.
“If a green group hands out a how to vote card, you can complain and have it stopped,” he says. “But you can’t complain about the Minerals Council telling people how they should vote, much less stop them.”
That is not sufficient for the conservatives.
“Our understanding is that the changes being drafted will say that if you received any overseas donations you won’t be able to campaign during an election period,” Crosbie says.
“The flow-on from that is that every organisation involved in any advocacy during an election campaign would have to be audited to show their sources of income and what their activities were.”
Once again, he says, there is overseas precedent. Before the most recent British election, the government passed a law to monitor anyone involved in electoral activities, broadly defined, including advocacy. Then their spending was audited. The civil society groups were required to show all sources of income and detail all their activities and spending.
“It had a very chilling effect,” Crosbie says.
Which, of course, is exactly what the government intends to achieve. It does not want charitable advocates out there, particularly at election time, highlighting swingeing cuts to the aid budget, or the environmental consequences of coalmining, or the inadequate support for the unemployed, homeless, refugees, you name it.
But it is not, on the available evidence, what the public wants. An Essential poll of what the people expected of the charities to which they donated showed 70 per cent wanted them to engage in advocacy.
“People who give to charities do so partly because they are a voice for a cause during elections,” Crosbie says. “You want those groups to be advocating for the communities they serve.”
In a way, the Coalition government’s multipronged effort to silence the charitable sector is a backhanded compliment to their influence. The wealthy vested interests on whose behalf the government is working realise they are losing the debate on certain issues, particularly environmental issues, and so demand the rules be changed.
“It’s not how much money they’ve got, it’s how much support they’ve got. It’s called democracy,” Crosbie says.
“The bottom line here is that charities are more trusted than politicians, that people see them as working for good. And that is exactly why the government is trying to close down their voices.”
The whole issue is freighted with irony and hypocrisy: that a government allegedly committed to removing red tape for industry is intent on burdening civil society groups with more of it; that a government that advocated the right of racists and bigots to free speech is trying to curtail the rights of civil society groups; that a government trying to prevent charities from advocating to political ends imposes no such restrictions on the likes of the Minerals Council or other corporate influencers.
But this isn’t about consistency or principle. It’s about monied interests, power and political survival.
This article was first published in the print edition of The Saturday Paper on Aug 19, 2017 as "Charitable detonation".
A free press is one you pay for. In the short term, the economic fallout from coronavirus has taken about a third of our revenue. We will survive this crisis, but we need the support of readers. Now is the time to subscribe.