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Uncertainty over fate of tax concessions


Western Australia’s two aged care peak bodies are at odds over whether providers will be impacted by proposed state legislation to narrow the range of charities that can access state tax exemptions.

Australian Ageing Agenda last week reported concerns raised by Leading Age Services Australia WA (LASA-WA) that not-for-profit providers could their lose tax concessions as an unintended consequence of the Tax Amendment Bill, which is currently before Parliament.

LASA WA said it feared aged care was being unfairly targeted and sought an amendment to include “the provision of aged care services” in the list of charities exempted from the measures.

LASA-WA's Beth Cameron at parliamentary hearing on Tax Amendment Bill

LASA-WA’s Beth Cameron at parliamentary hearing on Tax Amendment Bill last week

But Aged and Community Services WA (ACSWA) has responded saying LASA’s comments were “unfounded and misleading”.

ACSWA CEO Trevor Lovelle said the bill sought to introduce ‘relevant body’ provisions in the Act, defined as being a political party, trade union, or professional association, and therefore was unlikely to impact on exemptions for charitable NFP providers.

“The Amendment does not seek to remove the definition for ‘Charitable bodies’ which are defined as “a body or organisation established or carried on for charitable purposes” which should include NFP aged care providers,” Mr Lovelle said.

Beth Cameron, LASA-WA CEO, told AAA she stood by her concerns that aged care was not fully protected from the impact of the bill and she would continue to seek certainty for the sector.

Other witnesses to last week’s parliamentary hearings agreed the bill may have unintended consequences.

Assistant Professor Ian Murray from the University of Western Australia’s Faculty of Law also raised concerns about the impact of the Taxation Legislation Amendment Bill on the aged care sector.

Professor Martin told AAA yesterday that some not-for-profit aged care providers may be at risk of losing state tax concessions as a result of the Bill, even taking into account the proposed amendments that expressly exclude public benevolent institutions from the measures.

“At a general level, many aged care providers would be public benevolent institutions and so would not be affected. However, not all aged care providers are public benevolent institutions,” he said.

For example, some aged care institutions may have objects that are too broad to fit within the concept of a public benevolent institution and some charitable trusts that distribute money for the relief of needs arising from old age may not be institutions and therefore would not be exempt, he said.

“Aged care providers may also work as a group of charities, some of which are public benevolent institutions and some of which are not.”

For those that are not public benevolent institutions, Professor Murray said they would need to determine whether they are excluded as a ‘relevant body’ under the Bill.

“This would include, for instance, if the organisation has a purpose of promoting trade, industry or commerce – or even perhaps if the organisation carries out activities which have such a purpose. It may also include situations where the organisation is part of a group of charities, if any charity in the group has such a purpose,” he said.

Professor Murray said while affected organisations could apply to the Minister for Finance to have the tax concessions reinstated, on public interest grounds, the process would “clearly raise a degree of uncertainty, of cost and a loss of administrative time.”

He said the issue was complicated and may cause confusion within the sector.

State government responds

WA Finance Minister Dean Nalder told AAA the Bill was not aimed at removing existing exemptions that apply to not-for-profit aged care providers who are charitable organisations.

He said the vast majority of not-for-profit providers qualified for taxation relief on the basis of being “first limb charities”, in that fell under the general heading of relief of poverty, which included relief for the aged.

Mr Nadar said amendments have been listed for consideration during debate on the Bill to ensure the legislation does not have unintended application to first limb charities.

“In the unusual situation that a not-for-profit aged care provider is a charitable organisation and its purposes include the promotion of industry, trade or commerce, the Bill may have application to it.

“However, in the unlikely event that this scenario did arise, there is a discretion that would allow me to reinstate their exemption,” he said.



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