The Government is pleased to announce a $51 million package of taxation
measures to encourage greater corporate and personal philanthropy
in Australia. This initial annual revenue cost will rise over time
as these measures encourage the further growth of philanthropy.
This announcement supports our determination to draw upon the unique
skills of individuals, business, government and the community to forge
a new social coalition to help create a stronger, fairer Australia.
Through enlightened self interest many businesses already greatly
contribute to their communities. This announcement is further encouragement
to them as it is to others that business can do well by doing good.
The specific taxation measures flow from the recommendations of a
taxation working group, chaired by David Gonski from Wentworth Associates.
Set up following the Roundtable meeting with business and community
leaders in March last year, this working group was one of a number
that advised the Government on initiatives to promote business and
community partnerships.
Under the new arrangements, to take effect from 1 July 1999, income
tax deductions will be provided for the market value of donations
of property worth more than $5,000, regardless of when it was purchased
or acquired. This is expected to lead to around $45 million each year
in increased donations, with a larger increase predicted over time.
Initially, government revenue will be reduced by around $20 million
per annum.
Existing provisions which allow for deductions for property donations,
such as under the Cultural Gifts Programme, and more generally for
property purchased less than 12 months before the donation, will not
be subject to this $5,000 threshold.
A capital gains tax exemption will also be provided for testamentary
gifts of property to bodies eligible to receive tax deductible donations.
As a result, eligible not-for-profit organisations can expect a $15
million boost in donations once this measure impacts on donor behaviour.
The Government will also introduce a new category of private charitable
funds. These will need to meet all the criteria now required to qualify
as a public fund, but without the need to seek contributions from
the public. This will provide businesses, families and individuals
greater freedom to set up their own trusts for philanthropic purposes.
This is expected to increase donations by a further $15 million per
year, with a $10 million yearly cost to Government revenue.
The Government will also provide greater incentives for donations
of property under the Cultural Gifts Programme. These donations will
be exempt from capital gains tax and donors will be able to apportion
their tax deductions for donations over a period of up to five years.
All these measures will help cut through the red tape that has discouraged
many businesses individuals and families who want to give more to
their communities.
They are also consistent with the goals of the Government's new
tax system to provide choice, opportunity and simplicity to help create
a fairer Australia.
In addition to the new measures, the Government will act on the recommendation
of the Round Table to establish a new body to encourage partnerships
between businesses and communities more generally in Australia. To
be named the Prime Minister's Community Business Partnership,
the organisation will have a board of high profile people drawn from
business and the community.
The Prime Minister will chair the board, and in his absence it will
chaired by the responsible Minister, Senator Jocelyn Newman on his
behalf. Also represented on the board will be some of the 1998 business
and community Round Table members.
The Partnership will promote and showcase corporate examples of best
practice engagement in the community across the country. It will also
play an important brokerage role by fostering new partnerships between
the community, government and business.
All these initiatives confirm our commitment to a new social coalition
and demonstrate the further investment the Government is willing to
make to meet its social obligations.
26 March 1999