Abstract:
In both Australia and New Zealand various tax concession are granted to entities that are considered “charitable” or “charities”. For example, in Australia s 50-5 item 1.1 of the Income Tax Assessment Act 1997 (Cth) provides that the income of Australian charitable entities is exempt from income tax. In New Zealand there are similar provisions in the Income Tax Act 2007 (NZ). This article undertakes an analysis of the development of the “public benefit” restriction on charities. It looks at the historical and political underpinnings of this test, including how it came about and the fiscal relevance. The paper then examines how the common law development of the concept of charity has been applied in Australia and in particular to charities established for Australian indigenous people and whether this creates a problem in Australia. The article then compares the Australian position with the New Zealand experience where several legislative changes including amendments to the New Zealand Income Tax Act have been introduced in order to benefit Maori charities. In particular the New Zealand legislation extends the meaning of charitable purpose for Maori organisations and attempts to limit the “public benefit” requirement. The article concludes with a discussion of the policy reasons for the change and asks the question whether this could or should be duplicated in Australia.
