Charity Rorts: how private schools and big business rob from the poor to give to the rich

by | Jan 12, 2021 | Business

It’s time to tackle charity rorts, writes William De Maria. The richest schools are charities, as are big businesses like Queensland Sugar Limited. Even the likes of AI Group and NSW Business Chamber Ltd, organisations which fight against higher pay and better conditions for workers, enjoy charity and tax exempt status. Why should taxpayers foot the bill? 

​The registered charity that is Victoria’s Wesley College, one of the nation’s richest schools, had an income in 2019 of $128.64 million. Its massive renovation program has included $21 million for a music school, $16 million for a boarding facility and $2.5 million to refurbish its boathouse.

As a charity the school receives perks including income tax exemptions, GST concessions and deductible gift recipient status.

Another registered charity just down the road is Caulfield Grammar, with more than $100 million of income. It has been constructing a new aquatic centre with an Olympic-sized swimming pool, moveable floors and walls and “wellbeing spaces” for dance, pilates, meditation and yoga.

Along with Victoria’s Haileybury College and Sydney’s Knox Grammar School, these Australia’s richest schools. Together, these four charities spent more on new facilities and renovations ($402 million) than the poorest 1,800 schools combined (less than $370 million) yet they teach fewer than 13,000 students. The poorest 1,800 schools teach 107,000 students.

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Then there is one of Australia’s poorest schools, Sheidow Park Primary School in South Australia. As principal Jennie-Marie Gorman does her annual walk around the school with the finance officer and the grounds person, they pass windows held together by safety screens; inspect the playgrounds built 20 years ago; note the walls that haven’t been painted in 15 years; and look again at the patch of exposed concrete in the front office, where the finance officer’s swivel chair has worn a hole in the carpet. That hole will be fixed in about five years if all goes to schedule. Says Ms Gorman:

“We have a plan to carpet two to three classrooms a year, based on need, so the ones with the biggest holes in them or the biggest rips get replaced first.”

 

“We also need new carpet in the office, but we look at what the children need first and we put ourselves at the end of the line — which is just normal teacher stuff. That’s just how we operate.”

The charity concession to non-government schools is propping up a massive two-class education system. Tax concessions take more than $1.3 billion from the government’s budget each year.

Opening up the tax concession trough

Take the cruel issue of homelessness. Some 81% of all charities registered with the national regulator in mid-2019 say they are working in the homeless area. So 46,716 registered charities claim that combatting homelessness is one of their core missions. Remarkable.

The problem is in the definition. In 2013, the Commonwealth Parliament recognised a legislative clarification was needed to respond to the exponential growth of charities caused by governments retracting their historical welfare obligations.

It ended up being not so much a “legislative clarification” as the government opening up unprecedented access to the tax concession trough.

As long as your organisation is set up without a profit motive and comes together for a “charitable purpose” then, well, welcome to the trough.

Definition of a charity

What is a charitable purpose? This is a definition that can stretch across an airfield and is applied recklessly.

The Queensland Sugar Ltd (QSL) describes itself as “a not-for-profit, service organisation owned by Queensland cane growers and sugar millers, which is dedicated to serving their interests for the long-term prosperity of the Queensland sugar industry”.

So a strictly commercial operation, with no donors and no charity programs, is recognised as a charity by the ACNC, in fact recognised as the fifth biggest charity in Australia.

It is hard to believe. Even harder is understanding Queensland Sugar’s logic in justifying why it self-nominated to be on the charity register.

In its Activity Information Statement to the charity regulator Australian Charities and not for profits Commission, in response to the regulator’s question: “What charitable work did you do in 2018”?

QSL replied (paraphrased):

“Continued to promote the development of the Australian sugar industry through providing services to all of Queensland’s growers and Millers (sic).”

So there you have it! Every time you sit down for a cuppa and put sugar in your tea or coffee, QSL is right behind you nodding approvingly that it has just performed another charitable act.

Charity that fights against workers

Then there’s the registered charity the NSW Business Chamber Ltd, which fights against better pay and conditions for workers – and has even fought against workplace leave for victims of domestic violence. There is big money in it. In 2019, its revenues rose from $205 million to $237 million.

This charity also enjoys hefty government grants. Its financial statements for 2018 show the Chamber booked government grant income of $7.5 million, with $6.7 million in grants the year before. As a charity the Chamber pays virtually no tax, even though it operates large law firms and an array of recruitment agencies.

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We have gone too far. We need a complete review of the flawed Commonwealth Charities Act 2013. This review should cut away most existing charitable purposes and return the definition of charity back to its Samaritan roots.

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ABOUT THE AUTHOR

William De Maria

William De Maria

William De Maria’s latest book "Trouble in the Land of Giving. Australian Charities, Fraud & the State" was published by Palaver Books in January 2020. It is in contention for the Victorian Premier’s Literary Award for non-fiction.

21 Comments

  1. Avatar

    I like the Finnish way; NO private education at all.

  2. Avatar

    Part of the problem in the charity sector is entrenched control of the board of directors. This is often achieved through having a trustee company controlling the composition of the charity’s board. Whoever controls the board is usually in a position to determine the director remuneration, which is often significant.

    Another means of controlling the Board is by making voting membership at the discretion of the Board. In one Sydney private school, despite parents paying significant fees for 800 students, the voting members of the school community are around 40 persons. The tight control of voting membership means there is unlikely to be a political-style branch stack anytime soon.

    • Avatar

      True, he’s more focussed on going after Australian Conservation Foundation for daring to call Angus Taylor out on climate change policies.

  3. Avatar

    Are not the religious, less well off, private schools the obstacle to reform? Too many parents to tackle politically? Is that not why Labor did not try to change the clear bias and misapplication of charity status?

  4. Avatar

    Thank you for pointing out the increasing corruption that is now endemic in government

    is CSR charity status somehow equivalent to a subsidy – tax breaks for favoured business ?

  5. Avatar

    The best kind of rort.

    The government awards contracts and grants to non-profit lobbyists representing business and wealth. They then lobby the government to do harm to to the public using our money. Win win for wealth and privilege.

  6. Avatar

    Yes the Seventh Day Adventist movement is also a “Registered Charity” Helping themselves to multi millions of Tax Payer funds in the name of “Religion”. They are some of the biggest rorters in Australia, and give virtually nothing to ordinary Australians,just their own in tax breaks.Time to stop this religious BIG BUSINESS tax rort forever. DO IT NOW.

  7. Avatar

    a muddled article .Pity as it needs to be discussed in rational terms and more completely > Generic descriptions do not help the factual issues . No discussion about how our Accounting professions manipulate govt on this issue..
    A bit of knowledge of the history would also help the discussion

  8. Avatar

    Another rort made public by good fact based journalism.
    Perhaps you should chase classification as a charity?

  9. Avatar

    Good points, but a little bit of proof reading would help get the message across. So many errors.

  10. Avatar

    Yes the Seventh Day Adventist movement is also a “Registered Charity” Helping themselves to multi millions of Tax Payer funds in the name of “Religion”. They are some of the biggest rorters in Australia, and give virtually nothing to ordinary Australians,just their own in tax breaks.Time to stop this religious tax rort forever. DO IT NOW.

  11. Avatar

    Let’s have a good hard look at the religious sector – about time they started opening up their books

    • Avatar

      Absolutely. The Catholic Church pays NO TAX, RATES, etc, anywhere on EARTH, and has Massive investments all over the World(and is said to be the Richest Corporation on Earth) and yet governments subsidise their “Religious” Schools, year after year.
      They also protect Paedophiles in their ranks, all over the World. That description applies to ALL religions, all over the World as well.
      TAX THE CHURCHES.

      • Avatar

        Last financial year statistics available (2019 – 20) Vinnies (just as an example) spent $583m assisting people in crisis (mental health, domestic violence victims, disaffected youth, refugees etc). The people who do most of the work of Vinnies – home visits, family crisis support, refugee visitations and many other areas do so completely unpaid. The majority of the earliest AIDS victims in Sydney were cared for by nuns and others at St Vincent’s Hospice at a time when most people would not shake hands with affected people. The Sisters of Charity put up their hand to offer to run a supervised injecting room at Kings Cross where they have worked with those affected by drug and alcohol, it is now run by the Uniting Church. Look up Fr Chris Riley, a Catholic priest and his work with of Youth off the Streets and see how that groups supports young people regularly shunned by the rest of society.

        Yes there are paedophiles in religious organisations, as there are in all professions and too many homes and I believe the hottest fires of Hades are reserved for the ‘religious’ perpetrators, but please don’t throw the baby out with the bathwater and negate the many good work performed by churches.

      • Avatar

        “The people who do most of the work of Vinnies-home visits, family crisis support, refugee visitations and many other areas do so completely unpaid.

        That is very admirable, but what does it cost, in terms of financial aid by the Churches?

      • Avatar

        Any organisation given the same favours would do equally as well – its a crap line – full disclosure of all financials is a must

  12. Avatar

    The Institute of Public Affaires(IPA, the LNP’s Biggest sponsor, and its members are the Richest people in Australia, is Registered as a Charitable Trust, and therefore pays NO TAX, while its members get tax deductions for their contributions to the IPA.

    Search “The Climate Denialist IPA and its Public Interest, Charity Status”……..The average wage earner in Australia is being “ruthlessly SREWED”, by the system

  13. Avatar

    Hi William, thanks for your very informative piece. I had no idea that those schools were even registered charities and it’s absolutely shocking. In your piece, you mention needing a complete review of the Commonwealth Charities Act but what can average everyday citizens do to push this when presumably those “charities” might lobby against this movement? Being subscribed to Michael West Media as a younger person has definitely been so disheartening (and at times it feels like I’m just a helpless watcher being taken for a ride), but this type of information is good to know and I will be reading your book as well to learn more about this.

  14. Avatar

    Labor and Liberal parties collude in perpetuating this farcical definition of charity status. The Gillard Gov review of charily law in 2015 and establishment of the Australian Charities and Non-Profits Commission was cheered by the Left, without a word of critical scrutiny or dissent. Civil Society Australia was the only organisation in the country that opposed this entrenchment of corruption in charity law and the establishment of the ACNC.

    William’s overview is good, but like virtually every article in Michael West Media, it omits to criticise ALP complicity in corruption.

  15. Avatar

    “The registered charity that is Victoria’s Wesley College, one of the
    nation’s richest schools, had an income in 2019 of $128.64 million. Its
    massive renovation program has included $21 million for a music school,
    $16 million for a boarding facility and $2.5 million to refurbish its
    boathouse.”

    The man after whom this college is named John Wesley, would be spinning in his grave were he to be aware that the cause he gave his life to, about caring for the poor, the disadvantaged and the marginalised, had been turned into a college for the training of the children of the rich and privileged and aimed at maintaining their financial and political dominance over those he fought for.

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