The Government on Mon 8.4.2013, issued for comment exposure draft legislation and explanatory material proposing to introduce a statutory definition of charity and charitable purpose for the purposes of all Commonwealth legislation as announced in the 2011 Federal Budget. The Government has also released a factsheet summarising the key issues.
According to the Government, the proposed statutory definition preserves the common law principles with minor modifications to provide greater clarity and certainty about the meaning of “charity” and “charitable purpose”. The core elements to be a charity are that an entity must be not-for-profit and have only charitable purposes (other than incidental or ancillary purposes that further or aid the charitable purpose) that are for the public benefit.
In announcing the release of the exposure draft, the Assistant Treasurer noted that the draft also incorporates recent court decisions, such as Aid/Watch v FCT (2010) 77 ATR 195, which extended the circumstances in which a charity may advance public debate. Mr Bradbury said feedback provided in response to the 2011 consultation paper A Definition of Charity has also been incorporated.
The definition is proposed to apply from 1 January 2014 (note the changes were previously proposed to commence on 1 July 2012).
The consultation package is available on the Treasury website.
COMMENTS are due by 3 May 2013.
Source: Assistant Treasurer’s media release No 045, 8 April 2013
[LTN 65, 8/4/13]
[FJM comment: I have a conceptual problem with codifying the definition of ‘charity’, as this will only have the effect of stultifying the concept, unless there are periodic statutory amendments made with the same insight as Court decisions (which is unlikely). For instance, the meaning of ‘charity’ would not have extended as far as the AidWatch case allowed, if the statute had been passed before that case was determined (indeed, there would have been no such case). The Courts have been very watchful and perceptive, over the last couple of hundred years and have allowed measured growth in the concept of what is a ‘charity’. I am concerned at how the definition of the term ‘charity’ will fair over the next couple of hundred years, if the responsibility for development of this area of the law is taken away from the Courts.]