September 13th 2008

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Articles from this issue:

COVER STORY / EDITORIAL: How America's choice will affect Australia

CANBERRA OBSERVED: Rudd's threat to close non-performing schools

FOREIGN INVESTMENT: Stronger rules needed on foreign investment

AGRICULTURE: High stakes in federal quarantine inquiry

EDUCATION: Reflections on home-schooling

UNITED NATIONS: Australia should not sign UN women's rights protocol

VICTORIA: Victoria battles over so-called 'right to kill'

RELIGIOUS FREEDOM: Bid to tax churches out of existence?

ADVERTISING: Protests force removal of offensive billboards

CHINA: How China topped the Olympic gold medal tally

UNITED STATES: Michelle Obama's separationist view of race

STRAWS IN THE WIND: Migration debate revisited / Migrating on the SS Urea (1970) / 2008 postscript

Mandated medical malpractice (letter)

BOOKS: ON BURCHETT, by Tibor Méray, Tibor Meray

BOOKS: THE ISRAEL LOBBY and US Foreign Policy, by John J. Mearsheimer and Stephen M. Walt

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Bid to tax churches out of existence?

by Bill Muehlenberg

News Weekly, September 13, 2008
The Rudd Government is undertaking a taxation review which could jeopardise churches' tax-exempt status, reports Bill Muehlenberg.

Every once in a while, calls are made to take away any tax-exempt status for churches or religious groups. There may be many reasons for this. Non-religious folk may not think it fair that they should subsidise religious bodies with their tax dollars. Hardened atheists and secularists may see this is yet another way of wiping religion off the map, or at least neutralising it even further.

Whatever the reason, it is back on the agenda again. The Rudd Government is undertaking a taxation review which will examine whether the concessions offered to the $80 billion non-profit sector are justified. A recent piece in The Australian put it this way:

"Most of the country's religious groups, which make up about $25 billion of the sector, run commercial enterprises. Among them is the Seventh Day Adventists' cereal giant Sanitarium, which generates more than $300 million a year.

"Many of the operations have little to do with charitable work but are exempt from various taxes including corporate tax and capital gains tax. The Catholic Church has long opposed reforms such as the creation of a national charities commission to regulate the sector, or charging tax on commercial enterprises.

"Business enterprises run by religious groups range from pizza chains, insurance companies, wineries, farms, schools, hospitals and aged-care facilities. All are exempt from tax. Australia is one of the few countries in the world where religious groups are not forced to pay tax on business ventures." (The Australian, July 28, 2008).

So should these groups, especially faith-based groups, lose any fiscal advantage? Columnist Angela Shanahan discussed this issue in a recent article, also in the Australian. She said:

"The argument is a compelling one and it goes something like this. Religious bodies and charities are not taxed, so religion can run businesses and not-for-profit organisations in the guise of charity. These charities, run as businesses and employing thousands, make and are given huge amounts of money that are churned back into the organisation.

"How is that different from any other business? Well, precisely because it isn't like another business. The turnover is not the object. Personal gain is not the object. The object is community good. That should be justification enough for not taxing such organisations."

She is worth quoting at length: "True, religious bodies and their affiliated not-for-profit organisations employ large numbers of people. The Catholic Church, for example, employs about 100,000 people. But it is indicative of the nature of this argument that most of those people are teachers, and nurses and other medical staff. In fact, once the church employed very few personnel because the work was done by unpaid religious. But times have changed and the operations of the church have become, of necessity, business-like.

"They also have become part of the mainstream fabric of society in a way they were not 100 years ago.

"So, for example, some of the best hospitals in this country are run by religious institutions and most of them are public hospitals, such as St Vincent's in Sydney. And of course one-third of Australian children, Catholic and non-Catholic, are educated in Catholic diocesan schools, which are part of the mainstream education system.

"Although they receive government funding, they save the taxpayer an enormous amount since they are funded at less than half of what it costs to educate a child in a state school. Non-diocesan schools receive even less.

"Large religiously based charities such as the St Vincent de Paul Society, Mission Australia and the Salvation Army run everything from homeless shelters to youth outreach and aged-care facilities, and lately the Government even expects them to find jobs for the unemployed.

"These charities are financed by a mixture of donations, government support and their own businesses, such as the famous op shops. Would Australians seriously want the op shops taxed?"


So what about those religious groups that have profitable business concerns? "The Sanitarium Company, which makes Weet-Bix is operated by the Seventh-Day Adventist Church. It earns millions. Surely it should pay tax? This is a slightly grey area. However, even if Sanitarium were officially taxed, in effect the company would not end up paying any tax because all profits go back into the church and it partly funds things such as the Sydney Adventist Hospital, the San."

Angela Shanahan rightly points out that if we go after religious groups, then we should go after them all.

As I have argued before, secular humanism is a religion. Indeed, atheism is too: "So if we tax religion, we must tax the Secular Association, too, and the Humanist Society and all the rest of the anti-religionists. Of course the anti-religionists don't make much money, but then they don't have to. They are not running hospitals, schools, orphanages, old people's homes. They don't generally organise themselves to go around at night in a van picking up drunks and taking them to Matt Talbot. They'd rather tax the proceeds of the silver circle at the Talbot."

She concludes, "So, by all means, let's have a charities commission that weeds out bogus charities, such as those set up by rich athletes to further enrich themselves. Let's make sure that the money does go where it is supposed to, since this is really the point. But please don't let secularist ex-senators Lyn Allison and Andrew Murray try to pretend that charity can be assessed like any other business." (The Australian, August 23, 2008).

Amen, sister.

- Bill Muehlenberg is a commentator on contemporary issues, and lectures in ethics and philosophy. His website CultureWatch is at:

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