Bob Brown (Tasmania, Australian Greens) Share this | Hansard source

by leave—I move Australian Greens amendments (1) and (2) on sheet 5918 together:

(1)    Schedule 2, item 22, page 9 (after line 22), insert:

426-117      Commissioner must prepare annual report on private ancillary funds

(2)    Schedule 2, item 22, page 11 (after line 12), insert:

        (1)    As soon as practicable after 30 June in each year, the Commissioner must prepare and give to the Minister a report on the activities of private ancillary funds during the year ending on that 30 June.

        (2)    The report must include but is not limited to:

             (a)    the number of, and value of, grants dispersed by these funds; and

             (b)    the range of activities supported from these funds and the amount of money going to each class of activity.

        (3)    The information required by subsection (2):

             (a)    must be prepared using the information provided by each private ancillary fund in submitting a return of income to the Commissioner each year; and

             (b)    may be aggregated in the report to a level that protects the privacy of individual private ancillary funds and donors to those funds.

        (4)    The Minister must cause a copy of the report to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report, together with a statement containing the data from item A70 in the relevant Tax Expenditures Statement (Deductions for donations to prescribed private funds).

We have here important amendments to enable the public to be better informed about the quite massive amount of money going into quite a large number of trusts called private ancillary trusts. The amendments introduce a range of measures to schedule 2 of the legislation to improve the governance and administration of these private ancillary trusts. The changes that we are proposing will ensure that private philanthropic trusts are more accountable to the tax office in the amount of money they earn and how much is dispersed.

However, the activity remains pretty translucent, if not opaque, to the public. For example, we do not know how many activities these trusts support or who they are. We do not know how much tax revenue is foregone when donors receive a tax donation from contributions to the trusts or how much money the trusts disperse. I remind the committee that this provision for these trusts was part of the Howard government’s effort to stimulate philanthropy, and that in itself is a good thing. But the fact is that we are not assured that the money is directed to philanthropic outcomes rather than to a tax remediation opportunity for those who are involved. We would like to know how much these trusts are dispersing and to what philanthropic ends it is going. Without that information it is not possible determine whether the community as a whole is benefiting rather than just the people who are using the trusts gaining from the forgone tax revenue.

The vast majority of trusts are engaged in good works, but this continuing lack of transparency will inevitably raise suspicions about whether the trusts are using their funds to support non-charitable activities or whether they are simply, to put it bluntly, tax havens. Under the legislation, the government will be requiring private ancillary trusts to submit a tax return to the tax office. The amendments I am bringing forward on behalf of the Greens ask for information from the tax returns to be submitted to parliament so that a transparent and public evaluation can be made of the benefit of providing these tax deductions through the philanthropic outcomes of these trusts. We recognise that privacy has to be an issue for donors and trustees. Therefore, we have formulated the amendments in a way that accepts that this information is to be provided as an aggregate, and is not going to require that the trust funds or the donors—or one might say investors in the trust funds, whichever way—have their privacy compromised.

I commend the amendments, which would have the commissioner prepare an annual report on these private ancillary trust funds. After 30 June each year, the commissioner would prepare and give to the minister a report on their activities in the previous financial year. The report would include, but would not be limited to, the number and value of the grants dispersed by the funds, the range of activities supported by them and the amount of money going into each form of activity. That would include preparing information provided by each private ancillary fund that goes to the Commissioner of Taxation, and that being aggregated in the report to a level that protects the privacy of individuals, as I have said.

The minister would then have a copy of the report brought before the Senate and, indeed, the House of Representatives. That would enable the parliament to be reassured that the deductions and donations to prescribed private funds are being used for philanthropic purposes and are not simply being used as a tax haven—dare I say, a tax-avoidance mechanism. It is a worthwhile set of amendments. It is simply to give transparency to taxpayers all over the country. Millions of dollars are going into these funds that are set up for philanthropic purposes and many taxpayers will want to know that, in fact, the nation is gaining by a due amount of money being spent on a philanthropic outcome and not being squirrelled away to the benefit of the investor but to no benefit to the wider community.