Christian schools face the prospect of losing millions of dollars in tax deductible funding under recommendations in a new report.

In November last year, the Australian Government’s Productivity Commission (PC) released a draft report that proposed reforms to tax-deductible giving.

As most tax-payers would know, the government provides a tax deduction for donations (over $2) to certain charities and organisations, known as the deductible gift recipient system (DGR).

Keeping schools affordable

At present, tax-deductible giving may include donations made to schools to cover new building costs or religious-based learning.

The PC is recommending putting an end to this, in a move that has alarmed Christian schools and groups such as the Christian Media & Arts Australia charity (CMAA).

Tax-deductible giving “is what enables private schools, including faith-based schools, to successfully fundraise and keep their school fees affordable,” the CMAA said in a statement.

“It’s also what enables scripture classes to keep operating in thousands of schools across the country.”

But citing “no coherent policy rationale” for deeming what is a tax-deductible charity in Australia, the PC is recommending that some charities be granted DGR status, while other entities have the status “withdrawn.”

“Profound impact”

While conceding that religious organisations “play an important role in many people’s lives and communities across Australia,” the PC said that “it does not see a case for additional government support for the practice of religion through the DGR system.”

Those flagged for having their DGR status withdrawn include “charities that have DGR status for school-building funds or to provide religious education in government schools,” the report states.

Up to 5,000 entities in Australia fall in to this group.

“If the government removes tax deductibility, it will have a profound impact on the ability of low-fee, faith-based schools to raise much-needed funds,” the CMAA said in a statement.

“More costs for parents”

The CMAA also highlighted that such a move will “drastically affect” the fundraising of SRE programs (Special Religious Education/scripture) “that are vital for student resilience and wellbeing.”

Sydney’s Pymble Ladies’ College principal Kate Hadwen told the Australian Financial Review that schools relied on such donations.

“All of these types of decisions simply layer on more cost for parents who might not be able to afford it,” she said.

“Our facilities are also used quite a lot by government schools. We gift them out to community organisations like local netball clubs and other sporting clubs.”

Have your say

In response to the recommendations, the CMAA is offering the public a platform to voice their opinion.

The CMAA is calling on people to write why they think their donations should remain tax deductible and upload it to their website.

“Through this report, and its recommended reforms, [the PC] has missed the key point that the faith communities contribute in an enormous way through both financial giving and volunteering of their time,” said the CMAA.

The Albanese Government has not yet officially responded to the report, Labor MP Dr Andrew Leigh told the AFR that the government will be “listening closely to the commentary from charities, donors and volunteers, and we look forward to receiving the final report in the first half of next year.”

For more information visit mediaarts.org.au/

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Feature image: Photo by Taylor Wilcox on Unsplash