House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)

Glossary

This Explanatory Memorandum uses the following abbreviations and acronyms.

General outline and financial impact

Schedule 1 - Deductible gift recipients

Outline

Schedule 1 to the Bill amends the ITAA 1997 to:

•

list Melbourne Business School Limited, Leaders Institute of South Australia Incorporated, St Patrick's Cathedral Melbourne Restoration Fund, Jewish Education Foundation (Vic) Ltd, Australian Education Research Organisation Limited, and Australians for Indigenous Constitutional Recognition Ltd as deductible gift recipients;

•

extend the deductible gift recipient listings of Sydney Chevra Kadisha and Australian Women Donors Network; and

•

remove the deductible gift recipient listing of the Mt Eliza Graduate School of Business and Government Limited.

Date of effect

The amendments in Schedule 1 apply to gifts made:

•

on or after 1 July 2022 to the Melbourne Business School Limited;

•

in the period 1 July 2022 to 30 June 2027 inclusive to Leaders Institute of South Australia Incorporated;

•

in the period 1 July 2022 to 30 June 2027 inclusive to St Patrick's Cathedral Melbourne Restoration Fund;

•

in the period 1 July 2021 to 30 June 2026 inclusive to Jewish Education Foundation (Vic) Ltd;

•

on or after 1 July 2021 to the Australian Education Research Organisation Limited; and

•

in the period 1 July 2022 to 30 June 2025 inclusive to Australians for Indigenous Constitutional Recognition Ltd.

The amendments extend the period of the listing of Sydney Chevra Kadisha so that it applies to gifts made on or after 31 December 2017 and on or before 30 June 2024.

The amendments extend the period of the listing of Australian Women Donors Network so that is applies to gifts made on or after 8 March 2018 and on or before 8 March 2028.

The amendments remove the listing of Mt Eliza Graduate School of Business and Government Limited apply on and after 1 January 2023.

Proposal announced

Schedule 1 to the Bill partially implements:

•

the measure Philanthropy - updates to specifically listed deductible gift recipients from the March 2022-23 Budget; and

•

the measure Philanthropy - updates to the list of specifically listed deductible gift recipients from the 2021-22 MYEFO.

Schedule 1 to the Bill fully implements the measure Philanthropy - updates to specifically listed deductible gift recipients from the October 2022-23 Budget.

Financial impact

The listing of the Jewish Education Foundation (Vic) Ltd and Australian Education Research Organisation Limited was part of the 2021-22 MYEFO and was estimated to have a negligible cost from 2022-23 to 2025-26.

All figures in this table represent amounts in $m.

.. Not zero but rounded to zero

The listing of the Melbourne Business School Limited, Leaders Institute of South Australia Incorporated, St Patrick's Cathedral Melbourne Restoration Fund, extending the listing for the Sydney Chevra Kadisha and removing the listing of Mt Eliza Graduate School of Business and Government Ltd was part of the March 2022-23 Budget and was estimated to decrease receipts by $6.3 million from 2023-24 to 2025-26.

All figures in this table represent amounts in $m.

The listing of the Australians for Indigenous Constitutional Recognition Ltd and extending the listing of Australian Women Donors Network was part of the October 2022-23 Budget and was estimated to decrease receipts by $0.8 million from 2023-24 to 2025-26.

All figures in this table represent amounts in $m.

Human rights implications

Schedule 1 does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2.

Compliance cost impact

The measure has a low compliance cost impact.

Chapter 1: Deductible gift recipients

1.1 Schedule 1 to the Bill amends the ITAA 1997 to:

•

list Melbourne Business School Limited, Leaders Institute of South Australia Incorporated, St Patrick's Cathedral Melbourne Restoration Fund, Jewish Education Foundation (Vic) Ltd, Australian Education Research Organisation Limited, and Australians for Indigenous Constitutional Recognition Ltd as deductible gift recipients;

•

extend the deductible gift recipient listings of Sydney Chevra Kadisha and Australian Women Donors Network; and

•

remove the deductible gift recipient listing of the Mt Eliza Graduate School of Business and Government Limited.

Context of amendments

1.2 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to deductible gift recipients. To be a deductible gift recipient, an organisation must fall within one of the general categories set out in Division 30 of the ITAA 1997 or be listed by name in that Division.

1.3 Deductible gift recipient status helps eligible organisations attract public financial support for their activities.

1.4 Melbourne Business School Limited (ABN 80 007 268 233) is a charity that operates as a graduate business school to provide degrees and short courses and conduct research and consulting activities relevant for the Australian and international business community.

1.5 Leaders Institute of South Australia Incorporated (ABN 93 093 281 641) is a charity which seeks to develop impactful leaders in South Australia by encouraging self-awareness and providing opportunities to experience alternative perspectives.

1.6 St Patrick's Cathedral Melbourne Restoration Fund (ABN 83 460 705 615) is a charity operating as a discretionary investment trust to maintain, preserve and restore the building and facilities of St Patrick's Cathedral Melbourne. The entity also promotes St Patrick's Cathedral Melbourne as a place of historic and cultural significance, place of worship and religious instruction, and as a venue for culture, artistry, and community.

1.7 Jewish Education Foundation (Vic) Ltd (ABN 91 654 198 375) is a charity that represents a cross section of the Victorian Jewish Community and supports Jewish schools and education, including through the provision of scholarships.

1.8 Australian Education Research Organisation Limited (ABN 83 644 853 369) supports Australian education by generating, presenting, and encouraging the adoption of evidence-based education.

1.9 Australians for Indigenous Constitutional Recognition Ltd (ABN 70 636 542 204) is a charity which seeks to empower Indigenous Australians to fully participate in Australian economic and social life including through developing educational material and promotion of the Uluru Statement and Indigenous constitutional recognition.

1.10 Sydney Chevra Kadisha (ABN 65 000 029 541) is a charity which attends to Jewish burials to ensure they are undertaken in accordance with rites and ceremonies of the Jewish faith.

1.11 Australian Women Donors Network (ABN 28 141 197 471) is a charity which promotes the funding of projects and charities which specifically address the needs of women and girls and advocate for the contribution of women to philanthropic causes.

1.12 The Mt Eliza Graduate School of Business and Government Limited has ceased operation and its activities are being carried out by the Melbourne Business School Limited which is its parent company.

Summary of new law

1.13 Schedule 1 to the Bill amends the ITAA 1997 to allow the following entities to be listed as deductible gift recipients under the income tax law:

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Melbourne Business School Limited;

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Leaders Institute of South Australia Incorporated;

•

St Patrick's Cathedral Melbourne Restoration Fund;

•

Jewish Education Foundation (Vic) Ltd;

•

Australian Education Research Organisation Limited; and

•

Australians for Indigenous Constitutional Recognition Ltd.

1.14 Schedule 1 to the Bill amends the ITAA 1997 to extend the period in which Sydney Chevra Kadisha is a deductible gift recipient under the income tax law.

1.15 Schedule 1 to the Bill amends the ITAA 1997 to extend the period in which Women Donors Network is a deductible gift recipient under the income tax law.

1.16 Schedule 1 to the Bill amends the ITAA 1997 to remove the Mt Eliza Graduate School of Business and Government Limited as a specifically listed deductible gift recipient under the income tax law.

Detailed explanation of new law

1.17 Taxpayers may claim an income tax deduction for gifts made to the Melbourne Business School Limited (ABN 80 007 268 233) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Melbourne Business School Limited receives public financial support for their activities. [Schedule 1, item 2, table item 2.2.58 in subsection 30-25(2)]

1.18 Taxpayers may claim an income tax deduction for gifts made to the Leaders Institute of South Australia Incorporated (ABN 93 093 281 641) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Leaders Institute of South Australia Incorporated receives public financial support for their activities. [Schedule 1, item 5, table item 13.2.35 in section 30-105]

1.19 Taxpayers may claim an income tax deduction for gifts made to the St Patrick's Cathedral Melbourne Restoration Fund (ABN 83 460 705 615) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the St Patrick's Cathedral Melbourne Restoration Fund receives public financial support for their activities. [Schedule 1, item 5, table item 13.2.36 in section 30-105]

1.20 Taxpayers may claim an income tax deduction for gifts made to the Jewish Education Foundation (Vic) Ltd (ABN 91 654 198 375) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Jewish Education Foundation (Vic) Ltd receives public financial support for their activities. [Schedule 1, item 2, table item 2.2.57 in subsection 30-25(2)]

1.21 Taxpayers may claim an income tax deduction for gifts made to the Australian Education Research Organisation Limited (ABN 83 644 853 369) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Australian Education Research Organisation Limited receives public financial support for their activities. [Schedule 1, item 2, table item 2.2.56 in subsection 30-25(2)]

1.22 Taxpayers may claim an income tax deduction for gifts made to Australians for Indigenous Constitutional Recognition Ltd (ABN 70 636 542 204) provided the gift complies with the existing requirements of the income tax law. This amendment ensures that the Australians for Indigenous Constitutional Recognition Ltd receives public financial support for their activities. [Schedule 1, item 5, table item 13.2.34 in section 30-105]

1.23 Taxpayers may claim an income tax deduction for gifts made to Sydney Chevra Kadisha (ABN 65 000 029 541) for a longer period than initially provided when it was first listed as a deductible gift recipient, provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Sydney Chevra Kadisha continues to receive public financial support for their activities. [Schedule 1, item 4, table item 12.2.5 in subsection 30-100(2)]

1.24 Taxpayers may claim an income tax deduction for gifts made to Sydney Australian Women Donors Network (ABN 28 141 197 471) for a longer period than initially provided when it was first listed as a deductible gift recipient, provided the gift complies with the existing requirements of the income tax law. This amendment ensures that Australian Women Donors Network continues to receive public financial support for their activities. [Schedule 1, item 3, table item 11.2.11 in section 30-95]

1.25 Mt Eliza Graduate School of Business and Government Limited (ABN 27 008 394 732) has ceased to operate as a provider of business administration programs. [Schedule 1, item 1, table item 2.2.24 in subsection 30-25(2)]

Consequential amendments

1.26 Schedule 1 to the Bill also amends the index for Division 30 of the ITAA 1997 to reflect the amendments. [Schedule 1, items 6 - 11, table items 21AAA, 26A, 63C, 65AB, 72AAAA and 112AB in section 30-315]

Commencement, application, and transitional provisions

Commencement

1.27 The amendments commence on the first day of the quarter following Royal Assent. [Clause 2]

Application

1.28 The amendments apply to gifts made on or after 1 July 2022 to the Melbourne Business School Limited. [Schedule 1, item 2, table item 2.2.58 in subsection 30-25(2)]

1.29 The amendments apply to gifts made on or after 1 July 2022 and on or before 30 June 2027 to the Leaders Institute of South Australia Incorporated. [Schedule 1, item 5, table item 13.2.35 in section 30-105]

1.30 The amendments apply to gifts made on or after 1 July 2022 and on or before 30 June 2027 to the St Patrick's Cathedral Melbourne Restoration Fund. [Schedule 1, item 5, table item 13.2.36 in section 30-105]

1.31 The amendments apply to gifts made on or after 1 July 2021 and on or before 30 June 2026 to the Jewish Education Foundation (Vic) Ltd. [Schedule 1, item 2, table item 2.2.57 in subsection 30-25(2)]

1.32 The amendments apply to gifts made on or after 1 July 2021 to the Australian Education Research Organisation Limited. [Schedule 1, item 2, table item 2.2.56 in subsection 30-25(2)]

1.33 The amendments apply to gifts made on or after 1 July 2022 and on or before 30 June 2025 to Australians for Indigenous Constitutional Recognition Ltd. [Schedule 1, item 5, table item 13.2.34 in section 30-105]

1.34 The amendments apply retrospectively. This ensures that if gifts were made prior to the commencement of this Schedule they may be tax deductible for income tax purposes, provided they comply with other requirements of the income tax law. Accordingly, despite the retrospective application of deductible gift recipient status there is no adverse impact on affected parties or the entities as they amendments assist entities to obtain support from the public and allow parties that provide gifts to obtain an income tax deduction if eligibility requirements are met. The removal of deductible gift recipient status for the Mt Eliza Graduate School of Business and Government Limited applies prospectively.

Chapter 2: Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Treasury Laws Amendment (2022 Measures No. 5) Bill 2022

Schedule 1 - Deductible gift recipients

Overview

2.1 Schedule 1 to the Bill amends the ITAA 1997 to:

•

list the Melbourne Business School Limited, Leaders Institute of South Australia Incorporated, the St Patrick's Cathedral Melbourne Restoration Fund, Jewish Education Foundation (Vic) Ltd, Australian Education Research Organisation Limited, and Australians for Indigenous Constitutional Recognition Ltd as deductible gift recipients;

•

extend the deductible gift recipient listings of Sydney Chevra Kadisha and Australian Women Donors Network; and

•

remove the deductible gift recipient listing of the Mt Eliza Graduate School of Business and Government Limited.

Human rights implications

2.2 This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

2.3 This Schedule is compatible with human rights as it does not raise any human rights issues.