Religious Charitable Status and Public Benefit in Australia

Article excerpt

[The Commonwealth government proposes to enact a statutory definition of religious charity. Whether religious groups should prove that they provide public benefit in return for charitable status is contentious and the current law is confused. Moreover, overseas reforms diverge on this issue. Identifying an appropriate model for determining public benefit is important because charity law is a significant means of state control over religion. This article proposes three criteria evidence, human rights and cost--by which to judge a public benefit charity test, and identifies three models that could be adopted. The model that is most consistent with the proposed criteria broadly accords with the current common law position.]


I    Introduction
II   The Attractions of Charitable Status
III  The Current Law
     A The Public Aspect of Public Benefit
     B The Benefit Aspect of Public Benefit
IV   State Control of Religious Groups through Charity Law
 V   The Legitimacy of State Control of Religious Groups
      through Charity Law
     A The Rationale of Charity Law
     B A Quid Pro Quo for the Fiscal Benefits of Charitable Status
VI   The Criteria for a Defensible Public Benefit Test
     A Sound Evidential Scheme
     B Consistent with Human Rights Norms
       1 Section 116
       2 International Human Rights Norms
         (a) The Right to 'Manifest One's Religion'
         (b) Discrimination on the Grounds of Religion
     C Cost-Effectiveness
VII  Three Models for Religious Charitable Status
     A Model A
     B Model B
     C Model C
VIII Conclusion


Fundamental reform of charity law is underway in Australia. As part of this reform the Commonwealth government has pledged to enact a statutory definition of charity by July 2013. (1) One of many issues raised by this development concerns the extent to which religious organisations will need to prove that they provide public benefit in return for charitable status under the statutory definition. Ascertaining public benefit from purely religious activities under the common law of charity has proved challenging in the past, although the difficulties were obscured by the application of a presumption of benefit with respect to most religious purposes. Removing the presumption of benefit would have significant implications for religious groups who rely upon charitable status to access a range of legal and fiscal privileges. Charity law is also a means by which the state regulates religious groups; the public benefit test, in its current and possible future manifestations, is at the heart of such regulation. Determining religion's public benefit through a defensible legal framework is thus an important check on state control over religious groups.

Although the Commonwealth reforms also pose fundamental policy questions concerning the worth of religion in Australian society, (2) this article is concerned with a preliminary legal question: what should a legal model for determining the charitable status of religious groups in relation to purely religious purposes look like when those purposes do not qualify as charitable on some other basis such as the relief of poverty or the advancement of education?

Most of the overseas jurisdictions who share Australia's charity law heritage have progressed more quickly with charity law reform and therefore offer useful comparators for Australia to consider. Two jurisdictions that offer strikingly different legal models in relation to public benefit and religious charitable status are England and Wales (hereinafter referred to as 'England'), (3) and the Republic of Ireland. (4) England has removed any presumption of public benefit for religious charitable status, so that public benefit must now be affirmatively proved, whereas the Republic of Ireland, in legislative reforms yet to commence, has continued to entrench the presumption of public benefit in relation to religious charitable purposes, although it will allow rebuttal in exceptional circumstances. …