Article originally appeared in The Australian

By Rowan Callick

LOBBY groups that campaign against government policy will be entitled to claim charity status after a court ruling yesterday.

The court swept aside Australian Taxation Office restrictions on charities’ advocacy work, pronouncing that such campaigning could itself be a charitable activity entitling tax deductibility — as long as it was intended for public benefit. This opens the door to organisations that lobby for refugees’ rights or other causes to apply for charitable status for the first time.

Sam McLean, a spokesman for activist group GetUp!, said the organisation would “carefully consider whether to apply” in light of the ruling.

He said: “We hadn’t considered applying for charitable status, because our chances were low” under the prevailing rules. But “even if we were eligible, we might choose not to take it up”, because it might appear inappropriate.

The judgment, by a five-two majority, concluded a four-year legal process that began after the ATO stripped a small aid-monitoring group, AidWatch, of its charitable status.

The tax office announced a year ago that it would start reviewing the entitlement for concessions, including deductible gift recipient status, of 200 non-profit entities.

Its decision was overturned by the Administrative Appeals Tribunal, then restored by the Federal Court. Greenpeace, Oxfam, the World Wildlife Fund, Wilderness Society, World Vision, PLAN, Nature Conservation Society NSW and Environment Victoria backed AidWatch’s bid for special leave to appeal to the High Court.

They together agreed to cover the potential legal costs — about $50,000 — if AidWatch lost that appeal. But it won, and its lawyers, Maurice Blackburn, pursued its case at the High Court over two days in June.

Director of AidWatch Gary Lee said the ATO’s 2006 decision had sent shockwaves through the charitable sector. It meant that groups might find it much harder to obtain money from charitable foundations, which risked questions about their own status.

But now, he said: “This decision is a win for freedom of political communication in Australia.

“We are pleased that the High Court has agreed that engaging in political debate is an essential part of advocacy work.”

World Vision chief executive Tim Costello said: “The High Court has recognised that, in a robust democracy, charities contribute to civil society in many ways, including by engaging in public policy debates and advocacy.

“Limiting charities to their narrow, 17th-century incarnation of direct service delivery would erode their contributions to society.”

Giri Sivaraman, a senior associate at law practice Maurice Blackburn, said: “It’s a magnificent result, not just for AidWatch but for the whole sector.

“It opens up the possibility of some organisations engaged in advocacy becoming newly eligible for charitable status.”

He added: “It may mean those who campaign for a reduction of poverty, or for refugee rights, gaining such status because they pursue public benefits through their advocacy.”

This gives charities “a clear path forwards”, he said.

“The High Court is saying that public debate is itself a benefit.”

Amnesty International can receive tax-deductible gifts because it, together with some other organisations, is exempted by name in the taxation legislation. Now the way is open for it to obtain full charitable status.

A spokesman for Assistant Treasurer Bill Shorten said that Treasury and the ATO would now consider the ruling and determine its impact, and would advise the government accordingly, a process likely to take several weeks.

Originally published as Charities win tax ruling on lobbying

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