Costello spin exposed on charity free speech clampdown


The silent and the free. Image by Webdiary artist Martin Davies.

The government’s hand-picked charity reform inquiry has blown Peter Costello’s cover on his attempt to censor charities, saying that it recommended AGAINST such action.

Committee member Robert Fitzgerald, the NSW community services commissioner, last night called on the Government to amend its charities legislation, saying “the three people on the inquiry all concluded that there was no public good, no public benefit to be served by trying to exclude this particular behaviour (advocacy for policy changes by government)”:

“Australia has an exceptionally strong civil society and exceptionally strong volunteer not-for-profit sector. Part of it is encapsulated in two things that Australians hold dear. The first thing is to have a go and the second is to have a say. And charities by and large get in there and have a go and try to make a difference. But the other thing Australians value is the right to have a say when legislation isn’t appropriate and I think that’s what the recommendations of the inquiry were about about trying to come up with a contemporary framework for charities that recognise that trying to make policy changes is a legitimate part of the activities.”(Lateline interview)

Fitzgerald is a former head of ACOSS and now chairs a round table of non-profit organisations. The charities inquiry was chaired by former NSW Supreme Court Justice Sheppard, with businessman David Gonski and Fitzgerald the other members. They recommended AGAINST disqualifying a charity from tax free status if it promoted a political cause or sought to change government policy. (See inquiryreport. For clarification by the Australian Tax Office of the tax status of charities published in the wake of media reporting of the controversy, go to ato. My analysis of the legislation is at Charitable free speech on endangered list! and my examination of Costello’s form on free speech is at Costello’s free speech record.)

Here is the inquiry’s UNANIMOUS conclusion:

The Committee recommends that charities should be permitted to engage in advocacy on behalf of those they benefit. Conduct of this kind should not deny them charitable status even if it involves advocating for a change in law or policy. Submissions from both charities and governments have demonstrated that charities are increasingly asked to represent to governments the interests of those they seek to benefit and to contribute to the development and administration of government policies. The Committee considers that the definition of a charity should not prevent these developments as they represent an effective means of delivering outcomes for individuals, charities and governments.

However, we also consider it important to maintain the independent status of charities. Their independence from government or any particular political grouping is an important feature of their ability to serve their beneficiaries and to contribute more broadly to the public good. Independence allows charities to identify groups needing support and to make decisions about the best way to provide assistance to them ‘without fear or favour’. The independence of the charitable sector is also an important factor in their gaining the confidence and trust of the wider community.

Supporting political parties or candidates for political office risks compromising charities’ independence. The Committee supports the need for a distinction to be drawn between such party-political activities and other types of lobbying activity. The Committee recommends that charities be prohibited from having purposes or undertaking activities that advance a political party or a candidate for political office. This would include direct support of or opposition to political parties or candidates for political office or encouraging members of the public to support or oppose particular parties or candidates for political office. Such support could include donations as well as undertaking research on behalf of political parties or candidates or making other resources of the entity available to a political party or candidate, for example staff or office supplies and equipment. If a charity engages in this type of activity its charitable status should be lost.

Non party-political purposes or activities such as advocating on behalf of their causes or needs, contributing to the development or implementation of public policy, entering into the public debate, or seeking to change a particular law or public policy, should be assessed against the same principles as other purposes and activities. The principles recommended by the Committee are that to be a charity an entity’s dominant purposes must be charitable and any other purposes must further, or be in aid of, the charitable purposes or be incidental or ancillary to them. In line with these principles it is the Committee’s view that if an entity has a non-party political purpose that purpose must further, or be in aid of, the dominant charitable purpose or be incidental or ancillary to the dominant charitable purpose. Any non party-political activities of a charity should not affect its charitable status provided it acts in good faith and its activities are not illegal or against public policy.

Recommendation 17

That charities be permitted neither to have purposes that promote a political party or a candidate for political office, nor to undertake activities that promote a political party or a candidate for political office. (SeeChapter26.)

So why did Costello ignore that advice? As well as disqualifying groups as charities for supporting a particular party or candidate for political office, Costello also banned advocacy of ‘a political cause”, and “attempting to change the law or government policy”. WHY???

My suspicion is that Costello and co were trying to slip through a sting without publicity – to strip proactive groups like Greenpeace of charitable status as well as add to the government’s tactical weapons in trying to keep inconvenient charities quiet on controversial issues.

This story took off after the Australian Financial Review’s political correspondent Laura Tingle read the detail of the legislation. So often in politics the devil is in the detail, but far too few political reporters take the time to read that detail, let alone analyse it. Laura is a rare breed – a political journalist who takes her democratic role – to keep the public informed and the government honest – seriously.

Costello is now exposed as one of the Howard government team working on a deliberate, long term agenda to reduce free political speech and informed public debate in Australia. Without charity advocacy – in health, medical research, education, welfare, the environment and human rights – voices opposed to the government’s ideology and the interests of big money in the big media would be further silenced. The rich and the the powerful – Howard’s winners – would further dominate mainstream debate. The advantages for the government are obvious. Its contempt for the health of our democracy is equally so.

But it’s worse for Costello. He’s trying to distinguish himself from Howard, albeit very cautiously. So we got a recent speech called Building social capital, where he urged Australians to volunteer and extolled the virtues of community involvement. He said:

Recognising the importance of the non-government sector and the positive values arising from it, what are the lessons for policy? The first thing is the very important maxim for government, any government, on any issue: “Do no harm.” These social networks are neither established by, nor controlled by government. They are voluntary. That is their strength. So while the Government cannot establish these associations and should not force engagement it should be careful to do no harm. Secondly if Government has a choice between delivering services in a way that enhances engagement and one that does not, then, all other things being equal it should prefer the former. Thirdly Government should be alert to deal with any threats that arise to the voluntary sector.

So what’s he really saying? Join up, help the community on the ground, and shut up about the political and policy issues which impact down there? C’mon Peter, you’re wearing no clothes.

Fitzgerald played a sophisticated game in his Lateline interview, congratulating Costello on the bill generally and giving him room to back down gracefully. His warnings, however, were stark. Some highlights:

There is absolutely no public good by trying to exclude organisations from being involved in advocacy by trying to promote change to public policy or government legislation. It’s absolutely appropriate that organisations that promote political parties or political candidates or act in their legal way should not be charities. But it is going too far then to add this extra bit which actually says at some point, when you do too much, your charitable status is at risk. That means all organisations now look over their shoulder to determine whether or not they’re at risk.

* Tony Jones: Also it appears the point where you lose your status or are in danger of losing it is quite vague. It says you can(not) be disqualified if the lobbying activity is more ancillary or incidental.What does that mean?

At the end of the day this is the other danger. Once you start to go down this track the question is not only what the threshold but who actually determines it. At the end of the day, it will fall to the tax office, public sector officials, to determine when somebody has or hasn’t gone over that line.

* Jones: Why do you think it’s been inserted? Indeed, is this part of the Government’s wider agenda for social and cultural change? In other words you can see there’s a deeper point here – why should taxpayers be funding lobby groups that are arguing against Government policies.

There are 40,000 charities. Many of those charities have engaged to greater or lesser degrees in trying to lobby governments of all persuasions about policies and about legislation. We can take any area – the health care area, you know the campaigns about trying to reduce cancer through tobacco smoking have all been geared to changing government policy and legislative changes. The huge reduction we’ve seen in the reduction in aged care poverty has been as a result of organisation lobbying to get change over 20 years. Now nobody in the Australian community would say that’s a terrible thing. Nobody would say those organisations should not be regarded as danger. But you start to cherry pick who you like and who you don’t. If you agree with them, that’s OK but if you don’t agree, then that’s a problem.

* Jones: The Government was quite happy – when you were head of ACOSS – to use one of these organisations to effectively lobby in the community for a major change to public policy, that is bringing in a GST. That’s a bit ironic when potentially ACOSS could be in danger now.

Well I think that’s true. And I think we’ve got to go back and say, look, Australia has an exceptionally strong civil society and exceptionally strong volunteer not-for-profit sector. Part of it is encapsulated in two things that Australians hold dear. the first thing is to have a go and the second is to have a say. And charities by and large get in there and have a go and try to make a difference. But the other thing Australians value is the right to have a say when legislation isn’t appropriate and I think that’s what the recommendations of the inquiry were about about trying to come up with a contemporary framework for charities that recognise that trying to make policy changes is a legitimate part of the activities.

* Jones What do you think Mr Costello is getting at here? Is he basically saying these are political organisations publicly funded by another name?

There are some organisations and some thinking that in fact non-government organisations who receive government grants or government support shouldn’t have a right to speak out. We’ve seen that at State level and at Commonwealth over time. If we go down that track in any way shape or form, we do a number of things. We will actually damage the very thing that Australia is good at – engaging civil society in a very robust way. The second thing we will actually damage the democratic process and I don’t think anybody wants to do that.



Philip Gomes in Redfern, Sydney

What a wedge! I’m torn between applauding Peter Costello’s initiative on charities and deploring it. I’m sure many Australians would feel the same. You have an axe to grind about public policy – go for it – not at the expense of the humble taxpayer, but…

As a former Catholic and avowed Atheist I would love to see all religious bodies pay the ultimate price and join the community as a fully paying participant, but for one thing. The fundamentalist economic and cultural policies pursued by this Government has resulted in our commonwealth being sold from under us by hook or by crook, so there has to be institutions that redress this loss of social capital (your words Peter) between the Government and the people it is supposed to serve.

Peter, you have now shifted the burden from what is your elected duty and responsibility on to us! This burden is shouldered by groups that exist on the smell of an oily rag, be they religious or otherwise. Shouldered by well meaning and caring citizens who show more spirit and community than that exhibited by your so called leadership.

Many of these groups would die without this meagre morsel, but of course you know that. Instead you pursue charitable corporate welfare in the guise of tax breaks and massive taxpayer funded transfers of cash to non-government institutions like private schools and health funds that are supposedly free market operators. Why are they incapable of paying their own way? And don’t they lobby you for changes to policy and endless handouts to save their corporate arses!

But of course there is another more sinister agenda. The Government seeks to kill two birds with one stone. This is to slowly break down the last remnants of the social glue holding us together in pursuit of the holy grail of a fully Americanised version of Australia – an every man for himself ideology. The individual as the supreme representation of Australian society and to hell with our traditional egalitarianism.

They wish to divide us so that we are powerless to challenge their agenda. And in doing so they deny Australians another of the rapidly closing avenues for expressions of dissent. Totalitarianism comes in several ways, sometimes with a hammer, or in increments, the treasurer and his ilk seek to incrementalise us into a mano-a-mano struggle for survival in our own personal gulags.

But of course we shouldn’t expect anything less from a Government that wedges it’s way through Australian society. They seek to attack on so many fronts that we are left reeling from the blows and incapable of response.


Peter Woodforde in Melba, ACT

What happens to all those good old Mick nuns who aid and comfort (and harbour) junkies and all sorts of “criminals”? The whole idea of church sanctuary for refugees also comes to mind. The good sisters never do jug, unless my recall is faulty, but I bet the Bishops would go funny if there was any chance that Tax were waiting in the wings with a big stick.

Another hypothetical – does this mean that looming is closer examination of those churches which conduct vast, lucrative non-taxed businesses “more than ancillary or incidental to the other purposes of the entity concerned”?

Peter Costello will have to eat a lot of Weetbix if he wants to grow the political muscle to try that one out. Face it Pete – you’re weak and silly and without a future and you’ve just proved it again. You haven’t got a cracker of John Howard’s political guile.

PS: A question for Peter Costello – will the Tax Office shut down free speech for the Salvos if they keep spending money sticking their heads up John Howard’s fundament, or will they get a special by-law?


Darren J Godwell, Chief Executive of LUMBU Indigenous Community Foundation, Lumbu

Thanks for the story on the draft Charities Bill 2003. There are some serious concerns for Indigenous charities too. The draft bill could lock indigenous peoples into disadvantage and preclude any advocacy for legislative and/or policy change whatsoever. Here are my detailed comments:

Some potential implications for Indigenous Australians

1. Recognition of intervention as a legitimate form of charitable activity

Indigenous Australians remain the most socio-economically disadvantaged in Australia. The Federal Government, to date, has failed to halt this decline. The band-aid approach of ‘relief of disadvantage’ as derived from the historical definition is inadequate. The definition must be changed to better reflect the times and circumstances of the twenty-first century. In this century charitable purposes must be expanded to include work that goes to the sources of disadvantage. Our work will only ever have sustainable impact if intervention strategies are recognised as legitimate activities i.e. capacity building, community development, youth empowerment, training etc.

2. Public awareness and advocacy are instrumental to sustainable change

Without the capacity to research, build public awareness and lobby political change then LUMBU’s work in Indigenous affairs is consigned to the patch-up work of eighteenth century blankets and soup kitchens. Indigenous interests are not well served by the existing social policy and infrastructure – hence the continued disadvantage. Structures and policies must change for improvements to be made and sustained.

LUMBU must be free to advocate this change otherwise there is no hope, no hope whatsoever to break the cycles of disadvantage and poverty. Who will generate the new approaches? Where will the new ideas be generated from? Who will invest in the propagation of these ideas and approaches? There is no commercial imperative so the private sector would not justify its presence. The vested interests and organisational culture of the public sector inhibits innovation and precludes risk taking. This is why there is a need for the third sector, the community controlled organisations such as charities and not-for-profits. We need to enshrine the right of charitable organisations to explore and then advocate new ideas, including lobbying the requisite reform of public policy and amendments to legislation.

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