DGR reform welcome, but needs to go further

Under a proposed new reform announced by Assistant charities minister Andrew Leigh, the Australian Taxation Office (ATO) will administer all Deductible Gift Recipient (DGR) categories, which will prevent political interference by governments. Currently, environmental, harm prevention, cultural and overseas aid organisations are administered by government departments.

It follows the decision in October 2022 to grant DGR status to eight organisations whose applications were withheld by the Morrison Government: Climate for Change Inc, Our Atmosphere Ltd, Veterinarians for Climate Action Ltd, Zero Emissions Noosa Inc, Climate and Environment Foundation, The Bimblebox Alliance Inc, Whitsunday Conservation Council Inc, and Australian Land Conservation Alliance Limited.

“We want to make sure that the hardworking charities of Australia get their tax deductibility based not on the good graces of the minister, but on fair applications of laws that apply to everyone,” the Minister told 2CC.

The proposed changes also simplify the application process and reporting requirements for organisations looking to obtain DGR status.

The DGR reform to end political interference is welcome. But there are more than 57,500 registered charities (for a population of 25 million) in Australia and growing. Some are commercial organisations benefiting from charity status and many are non compliant (and unaware of the stringent DGR rules). I hope the Minister can facilitate a conversation to allow charities to compete less and co-operate more.

Public consultation on DGR reform is open until 19 February 2023.