Environmental advocacy: what's the risk if tax status changes?

The advocacy work undertaken by civil society bodies including environmental organisations to create benefit for the whole society has long been recognisedin the charitable status given for taxation purposes. However, this status is periodically contested and in the current era is potentially facing new threats from the Inquiry commissioned by the Minister for the Environment. St Vincent de Paul’s Research and Legal Officer Rik Sutherland outlines the debate, and argues for the continuation of charitable status for environmental advocacy organisations.

On Thursday 26 March 2015, the House of Representatives Standing Committee on the Environment adopted an inquiry referred by the Minister for the Environment, asking the Committee to inquire into and report on the Register of Environmental Organisations.[1] Specifically, the Committee will be looking at the tax status of these environmental groups, many of which receive a range of benefits based on their charitable or not-for-profit status.

The Inquiry has been plagued with controversy, in large part because it has been suggested that it was catalysed by the mining industry as an attempt to discredit environmental advocacy organisations, such as Greenpeace, which pose a threat to the profitability of the resources business. On the other hand, the Inquiry forms part of a larger debate over the last few years about the status of advocacy conducted by not-for-profit organisations: we have recently seen funding stripped from peak housing advocacy bodies, the reintroduction of what are effectively gag clauses in service contracts, and a move away from mission-based charities (most of whom also do advocacy) as provider-of-choice for government.

This move is deeply concerning for many in the sector, for a range of reasons. Firstly, it is clear that lasting change will only occur with structural shifts to the systems that perpetuate poverty and inequality. No matter how good service delivery on the ground is, these high-level structural and institutional reforms come about only through advocacy.   Secondly, it is strongly arguable that the participation of all Non-Government Organisations (NGOs) is essential to the democratic process required by the Constitution’s implied freedom of political communication.[2] Recent research published here on P2P supports this.[3]

While the work of environment advocacy organisations might not seem as pressing in addressing issues of poverty and inequality as that of other organisations, a closer analysis reveals the key importance of this work. First, the impact of droughts on rural and remote communities is well-known: protecting our environment is essential to protecting outback Australians. Secondly, the evidence shows that families living in poverty in Australia bear the heaviest impacts of environmental degradation and climate change. This is because they have fewer resources to deal with the health, economic, and logistical consequences of rising temperatures and sea-levels, and extreme weather events.[4] We saw this recently with cyclones in Queensland, and bushfires in Victoria: it is those already on the margins who are hit hardest. Without changes to policy, climate change will continue to increase the gap between rich and poor. Thirdly, environmental changes are likely to lead to an increasing number of climate refugees over the coming century. Like the political asylum seekers of today, these people will be among the most marginalised in the world, and most in need of a voice. We are already seeing countries like New Zealand open their borders to climate refugees, but a better solution is to change policy so that the climate doesn’t become so degraded that it forces people to flee their homes. Finally, there is an essential connection between the environment and the First Peoples of Australia. Properly respecting and protecting our natural habitat is an essential step towards true reconciliation, and righting the inequities that have been visited and continue to be inflicted upon ATSI peoples. Strong environmental advocacy must be a part of this movement.

Because of the close relationship between environmental advocacy and poverty, there is certainly a strong case for retaining the current charitable status of many groups that conduct environmental advocacy, as well as (where relevant) their direct funding from government. Indeed, this position is currently reflected in law: the Charities Act 2013 (Cth) s 12(1)(l) recognises that advocacy is a charitable purpose, and the High Court Aid/Watch decision that found the same.[5]

In some ways, the current Inquiry reflects one of the biggest conflicts of our time – the short-termism of the corporate agenda rubbing against its own creation: the long-term havoc of climate change. We should all be watching the outcome with keen interest.

[1] http://www.aph.gov.au/Parliamentary_Business/Committees/House/Environment/REO/Terms_of_Reference.

[2] See, for example, Australian Capital Television v Commonwealth (1992) 177 CLR 106.

[3] See Jacqueline Williams, The Effectiveness of Public Participation by NFPs in Australia' (2015) at https://www.vinnies.org.au/page/Publications/National/Articles_Reports__Speeches/Effectiveness_of_NFPs_in_public_life.

[4] See, for example, Organisation for Economic Coordination and Development and others, Poverty and Climate Change (2003) at http://www.oecd.org/env/cc/2502872.pdf.

[5] Aid/Watch Incorporated v Commissioner of Taxation [2010] HCA 42.

Posted by Kathy Landvogt