Senate

Supplementary Explanatory Memorandum

(Circulated by authority of the Assistant Treasurer, the Hon. Stuart Robert MP)

Glossary

The following abbreviations and acronyms are used throughout this supplementary explanatory memorandum.

General outline and financial impact

Amendments to the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018: Further deductible gift recipients

The amendments insert Schedule 10 to the Bill that amends the ITAA 1997 to update the list of specifically listed DGRs to include:

•

Australian Sports Foundation Charitable Fund;

•

Australian Women Donors Network;

•

Paul Ramsay Foundation Limited;

•

The Q Foundation Trust;

•

Smile Like Drake Foundation Limited; and

•

Victorian Pride Centre Ltd.

The amendments to Schedule 9 to the Bill extend the end date for DGR listing for Sydney Chevra Kadisha from 31 December 2019 until 31 December 2020.

Date of effect: The amendments apply to gifts made to Australian Sports Foundation Charitable Fund after 30 June 2018 and before 1 July 2023.

The amendments apply to gifts made to Australian Women Donors Network, Smile Like Drake Foundation Limited and Victorian Pride Centre Ltd after 8 March 2018 and before 9 March 2023.

The amendments apply to gifts made to Paul Ramsay Foundation Limited after 30 June 2018 and before 1 July 2020.

The amendments apply to gifts made to The Q Foundation Trust after 31 December 2017 and before 1 January 2023.

The amendments apply to gifts made to Sydney Chevra Kadisha to extend the end date from 31 December 2019 until 31 December 2020.

Proposal announced: The amendments fully implement the measure 'Philanthropy - updates to the list of specifically listed deductible gift recipients' from the 2018-19 Budget. The amendment to extend the end date from 31 December 2019 until 31 December 2020 for Sydney Chevra Kadisha to be listed as a DGR has not previously been announced.

Financial impact: As at the 2018-19 Budget, the cost to revenue of adding the six new DGRs was estimated to be $0.6 million over the forward estimates period to 2021-22. Extending Sydney Chevra Kadisha's DGR status has an estimated cost to revenue of $0.1 million. The total estimated financial impact comprises ($m):

- nil .. not zero but rounded to zero

Human rights implications: The amendments do not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3, paragraphs 3.1 to 3.5.

Compliance cost impact: Nil.

Amendments to the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018: Extending DGR status to entities promoting Indigenous languages

The amendments insert Schedule 11 to this Bill to amend the ITAA 1997 to enable entities that promote Indigenous languages to be endorsed as a DGR.

Date of effect: The amendments commence from 1 July 2019.

Proposal announced: The amendments implement the measure 'Extending deductible gift recipient eligibility to organisations promoting Indigenous languages' which was announced in the 2017-18 Mid-Year Economic and Fiscal Outlook.

Financial impact: As at the 2017-18 Mid-Year Economic and Fiscal Outlook, this measure was estimated to have a negligible cost to revenue over the then forward estimates period comprising:

- nil

.. not zero but rounded to zero

Human rights implications: The amendments do not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3, paragraphs 3.6 to 3.12.

Compliance cost impact: Nil.

Chapter 1 Amendments to the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018: Further deductible gift recipients

Outline of chapter

1.1 The amendments insert Schedule 10 to the Bill to amend the ITAA 1997 to update the list of specifically listed DGRs to include:

•

Australian Sports Foundation Charitable Fund;

•

Australian Women Donors Network;

•

Paul Ramsay Foundation Limited;

•

The Q Foundation Trust;

•

Smile Like Drake Foundation Limited; and

•

Victorian Pride Centre Ltd.

1.2 The amendments to Schedule 9 to the Bill extend the end date for DGR listing for Sydney Chevra Kadisha from 31 December 2019 until 31 December 2020.

Context of amendments

Deductible gift recipient status

1.3 These amendments were previously introduced in Parliament as Schedule 2 to the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018.

1.4 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to a DGR. DGRs are entities which fall within one of the general categories set out in Division 30 of the ITAA 1997 or are specifically listed by name in that Division.

1.5 DGR status helps eligible organisations attract public financial support for their activities.

Australian Sports Foundation Charitable Fund

1.6 Australian Sports Foundation Charitable Fund is a registered charity established to support projects where sport is the vehicle to achieve charitable aims.

Australian Women Donors Network

1.7 Australian Women Donors Network is a registered charity established to provide a voice for gender inclusive philanthropy across all focus areas including education, health, disability, youth and the arts.

Paul Ramsay Foundation Limited

1.8 Paul Ramsay Foundation Limited is a registered charity established to be the recipient of the Ramsay bequest from the Paul Ramsay Foundation to pursue one or more of the following charitable purposes in Australia: advancing health, advancing education and advancing social or public welfare.

The Q Foundation Trust

1.9 The Q Foundation Trust is a registered charity with the principal purpose of advancing education and engagement in science and technology in Australia.

Smile Like Drake Foundation Limited

1.10 Smile Like Drake Foundation Limited is a registered charity that supports research into preventing drowning and provides water safety education programs for schools.

Victorian Pride Centre Ltd

1.11 Victorian Pride Centre Ltd is a registered charity established to own and operate a centre in the State of Victoria to facilitate and host support services, facilities and resources for the lesbian, gay, bisexual, transgender, and intersex community.

Summary of new law

1.12 The amendments made by Schedule 10 make the Australian Sports Foundation Charitable Fund, Australian Women Donors Network, Paul Ramsay Foundation Limited, The Q Foundation Trust, Smile Like Drake Foundation Limited and Victorian Pride Centre Ltd DGRs.

1.13 The amendments to Schedule 9 to the Bill extend the end date for DGR listing for Sydney Chevra Kadisha from 31 December 2019 until 31 December 2020.

Detailed explanation of new law

Australian Sports Foundation Charitable Fund (ABN 97 179 064 897)

1.14 Taxpayers may claim an income tax deduction for gifts of $2 or more to the Australian Sports Foundation Charitable Fund provided the gift complies with the existing requirements of the income tax law. [Amendment 3, Schedule 10, item 3, item 10.2.9 in the table in section 30-90 of the ITAA 1997]

1.15 This amendment ensures that the Australian Sports Foundation Charitable Fund receives appropriate support through the Commonwealth tax system for supporting projects where sport is the vehicle to achieve charitable aims.

Australian Women Donors Network (ABN 28 141 197 471)

1.16 Taxpayers may claim an income tax deduction for gifts of $2 or more to the Australian Women Donors Network provided the gift complies with the existing requirements of the income tax law. [Amendment 3, Schedule 10, item 4, table item 11.2.11 in section 30-95 of the ITAA 1997]

1.17 This amendment ensures that the Australian Women Donors Network receives appropriate support through the Commonwealth tax system for providing a voice for gender inclusive philanthropy across all focus areas.

Paul Ramsay Foundation Limited (ABN 32 623 132 472)

1.18 Taxpayers may claim an income tax deduction for gifts of $2 or more to the Paul Ramsay Foundation Limited provided the gift complies with the existing requirements of the income tax law. [Amendment 3, Schedule 10, item 5, table item 13.2.24 in section 30-105 of the ITAA 1997]

1.19 This amendment ensures that the Paul Ramsay Foundation Limited receives appropriate support through the Commonwealth tax system for pursuing its charitable purposes in Australia.

The Q Foundation Trust (ABN 95 941 852 608)

1.20 Taxpayers may claim an income tax deduction for gifts of $2 or more to The Q Foundation Trust provided the gift complies with the existing requirements of the income tax law. [Amendment 3, Schedule 10, item 1, table item 2.2.46 in subsection 30-25(2) of the ITAA 1997]

1.21 This amendment ensures that The Q Foundation Trust receives appropriate support through the Commonwealth tax system for advancing education and engagement in science and technology in Australia.

Smile Like Drake Foundation Limited (ABN 33 164 893 261)

1.22 Taxpayers may claim an income tax deduction for gifts of $2 or more to the Smile Like Drake Foundation Limited provided the gift complies with the existing requirements of the income tax law. [Amendment 3, Schedule 10, item 1, table item 2.2.45 in subsection 30-25(2) of the ITAA 1997]

1.23 This amendment ensures that the Smile Like Drake Foundation Limited receives appropriate support through the Commonwealth tax system for supporting research into preventing drowning and providing water safety education programs for schools.

Victorian Pride Centre Ltd (ABN 68 615 432 838)

1.24 Taxpayers may claim an income tax deduction for gifts of $2 or more to the Victorian Pride Centre Ltd provided the gift complies with the existing requirements of the income tax law. [Amendment 3, Schedule 10, item 2, table item 4.2.44 in subsection 30-45(2) of the ITAA 1997]

1.25 This amendment ensures that the Victorian Pride Centre Ltd receives appropriate support through the Commonwealth tax system for facilitating and hosting support services, facilities and resources for the lesbian, gay, bisexual, transgender, and intersex community.

Consequential amendments

1.26 Schedule 10 also updates the index of DGRs in Division 30 of the ITAA 1997 to reflect the new listings. [Amendment 3, Schedule 10, items 6 to 10, table items 27AAAA, 27AAAB, 83, 94AA, 111AB and 121B in section 30-315 of the ITAA 1997]

Application and transitional provisions

1.27 The amendments apply to gifts of $2 or more to the Australian Sports Foundation Charitable Fund after 30 June 2018 and before 1 July 2023. [Amendment 3, Schedule 10, item 3, third column of table item 10.2.9 in section 30-90 of the ITAA 1997]

1.28 The amendments apply to gifts of $2 or more to the Australian Women Donors Network after 8 March 2018 and before 9 March 2023. [Amendment 3, Schedule 10, item 4, third column of table item 11.2.11 in section 30-95 of the ITAA 1997]

1.29 The amendments extend the end date of the period during which Sydney Chevra Kadisha qualifies for DGR listing from 31 December 2019 until 31 December 2020. [Amendment 2, Schedule 9, item 2, third column of table item 12.2.5 in subsection 30-100(2) of the ITAA 1997]

1.30 The amendments apply to gifts of $2 or more to the Paul Ramsay Foundation Limited after 30 June 2018 and before 1 July 2020. [Amendment 3, Schedule 10, item 5, third column of table item 13.2.24 in section 30-105 of the ITAA 1997]

1.31 The amendments apply to gifts of $2 or more to The Q Foundation Trust after 31 December 2017 and before 1 January 2023. [Amendment 3, Schedule 10, item 1, third column of table item 2.2.46 in subsection 30-25(2) of the ITAA 1997]

1.32 The amendments apply to gifts of $2 or more to the Smile Like Drake Foundation Limited after 8 March 2018 and before 9 March 2023. [Amendment 3, Schedule 10, item 1, third column of table item 2.2.45 in subsection 30-25(2) of the ITAA 1997]

1.33 The amendments apply to gifts of $2 or more to the Victorian Pride Centre Ltd after 8 March 2018 and before 9 March 2023. [Amendment 3, Schedule 10, item 2, third column of table item 4.2.44 in subsection 30-45(2) of the ITAA 1997]

1.34 The amendments apply retrospectively. This ensures that gifts that have been made to the entities to which this Schedule applies qualify for income tax deductions from the above application dates provided the gifts comply with all requirements of the income tax law. The changes are wholly beneficial both to taxpayers making gifts of $2 or more to these DGRs and also to the DGR entities that receive these gifts.

1.35 The amendments commence on the first day of the first quarterly period following Royal Assent. [Amendment 1, clause 2]

Chapter 2 Amendments to the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018: Extending DGR status to entities promoting Indigenous languages

Outline of chapter

2.1 The amendments insert Schedule 11 to the Bill to extend DGR status to entities promoting Indigenous languages.

Context of amendments

2.2 These amendments were previously introduced in Parliament as Schedule 3 to the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018.

2.3 The income tax law allows income tax deductions for taxpayers who make gifts of $2 or more to a DGR. DGRs are entities which fall within one or more of the general categories set out in Division 30 of the ITAA 1997 or are specifically listed by name in that Division.

2.4 DGR status helps eligible organisations attract public financial support for their activities.

2.5 The income tax law provides support to 'cultural organisations' that have a principal purpose of, amongst other things, promoting the arts of Indigenous persons. However, prior to these amendments this did not include organisations that had a principal purpose of promoting the languages of Indigenous persons.

2.6 There are estimated to be 250 original Aboriginal and Torres Strait Islander languages and over 600 dialects. The Government has a range of other measures in place to prevent the loss of these languages.

2.7 In the 2017-18 Mid-Year Economic and Fiscal Outlook, the Government announced that it would extend DGR status to organisations that have a principal purpose of promoting Indigenous languages. The extension of DGR status adds to the existing Government initiatives that support Indigenous culture and provides appropriate assistance through the tax system for the public to make donations to these organisations.

Summary of new law

2.8 The amendments insert Schedule 11 to the Bill to extend DGR status to entities promoting Indigenous languages.

Detailed explanation of new law

2.9 The eligibility criteria for an entity to be eligible to be endorsed as an entity on the register of cultural organisations is amended so that it includes entities that have the principal purpose of promoting Indigenous languages. [Amendment 3, Schedule 11, item 1, subsection 30-300(2) of the ITAA 1997]

2.10 The term 'Indigenous person' is defined in the ITAA 1997 to mean a member of the Aboriginal race of Australia, or a descendant of an Indigenous inhabitant of the Torres Strait Islands. The languages of Indigenous persons are intended to refer to the traditional or historical languages of those persons. Extending DGR eligibility to organisations that promote these languages will assist in the languages' preservation.

Application and transitional provisions

2.11 The amendments commence on 1 July 2019. [Amendment 1, clause 2]

Chapter 3 Statement of Compatibility with Human Rights

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

Amendments to the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018: Further deductible gift recipients

3.1 The amendments to include Schedule 10 to the Bill and to Schedule 9 to the Bill are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

3.2 The amendments insert Schedule 10 to the Bill to update the list of specifically listed DGRs to include:

•

Australian Sports Foundation Charitable Fund;

•

Australian Women Donors Network;

•

Paul Ramsay Foundation Limited;

•

The Q Foundation Trust;

•

Smile Like Drake Foundation Limited; and

•

Victorian Pride Centre Ltd.

3.3 The amendments to Schedule 9 to the Bill extend the end date for DGR listing for Sydney Chevra Kadisha from 31 December 2019 until 31 December 2020.

Human rights implications

3.4 These amendments do not engage any of the applicable rights or freedoms.

Conclusion

3.5 These amendments are compatible with human rights as they do not raise any human rights issues.

Amendments to the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018: Extending DGR status to entities promoting Indigenous languages

3.6 The amendments to include Schedule 11 to the Bill are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

3.7 The amendments insert Schedule 11 to this Bill to extend DGR status to entities promoting Indigenous languages. This allows members of the public to make tax deductible gifts to organisations that are endorsed as an entity on the register of cultural organisations because they promote Indigenous languages.

Human rights implications

3.8 This Schedule engages the right to enjoy and benefit from culture contained in Article 27 of the International Covenant on Civil and Political Rights (ICCPR) and Article 15 of the International Covenant on Economic, Social and Cultural Rights (ICESR), as it promotes the preservation of Indigenous languages, which are a form of cultural expression.

3.9 The UN Committee on Economic, Social and Cultural Rights has regarded Indigenous peoples as a minority for the purposes of Article 27, and that culture encompasses many different forms including 'language'.

3.10 There are estimated to be 250 original Aboriginal and Torres Strait Islander languages and over 600 dialects.

3.11 The Bill is compatible with the right to enjoy and benefit from culture, as it promotes the preservation of Indigenous languages. It does this by providing appropriate support through the tax system for entities that promote the preservation of Indigenous languages, by allowing persons that make a donation of $2 or more to those entities to claim a tax deduction. These amendments do not engage any of the applicable rights or freedoms.

Conclusion

3.12 This Schedule is compatible with the right to enjoy and benefit from culture contained in Article 27 of the ICCPR and Article 15 of the ICESR, as it promotes the preservation of Indigenous languages.