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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2010-09-14 Daily Xml
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TRUSTEE (CHARITABLE TRUSTS) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 20 July 2010.)

The Hon. J.A. DARLEY (18:03): I rise, briefly, to indicate my support for this bill. In short, as indicated in the second reading speech, the bill is intended to ensure that a gift fund established to hold donations or other gifts for the benefit of a government instrumentality can hold the donations or gifts on trust without running the risk of becoming an invalid charitable trust for the purposes of being considered a deductible gift recipient by the Australian Taxation Office.

It is as a result of advice from the ATO that incorporated health advisory councils could not be considered deductible gift recipients because they were not a public hospital or charity. In addition, from the ATO's perspective, a health advisory council could not be DGR endorsed for its gift fund because any trust established by the HAC solely for the purposes of distributing money, property or benefits to government institutions, including public hospitals, would not be a valid charitable trust because of its connection to government.

My only comment in relation to the bill is in the form of a question to the minister as follows: why was this legislation considered necessary, when it appears to me that the same outcome could be achieved by proclaiming the country hospitals under the Public Charities Funds Act? I ask this because, in practical terms and based on past experience as a commissioner of charitable funds, donations are always made to hospitals and it is unlikely that donors would even contemplate donating to health advisory councils rather than to hospitals directly. It would appear to me that on this occasion the health department's policy advisers have been too close to the ether.

The Hon. J.M.A. LENSINK (18:05): I will be brief. This is a small bill. The issue has arisen and I understand was foreshadowed by the Liberal opposition during the passage of the health care bill in 2008, and it is an issue that relates to tax deductibility. We previously had a number of hospitals, particularly country hospitals, which were constituted under their own boards and they are now local boards. With the passage of that particular piece legislation they were incorporated under health advisory councils. This knocked off their deductibility status with the tax office, as they were then associated as a government body. I understand there are some millions held in trust by Country Health and some non-government organisations, such as the Red Cross, for those purposes.

Many members on this side of the house, in particular, would be familiar with the good work of the hospital auxiliaries in raising funds, and they would see it as appropriate, as indeed we would, that those funds would revert to those communities through their own hospitals. So the tax office did not recognise deductible gift recipient status and this bill will correct that. It is not an anomaly: I think it is probably fair to characterise it as an unintended consequence of the health care bill that passed through this place a couple of years ago. I commend the bill to the council and look forward to the probably brief committee stage of the debate.

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (18:07): I thank honourable members for their second reading contributions. I have also been advised by other Independents and minor parties of their support, and I thank them for that.

Indeed, this bill is the result of an unintended consequence, as the Hon. Michelle Lensink has outlined. It seeks to make amendments to the Trustee Act. The bill ensures that a gift fund established to hold donations or other gifts for the benefit of a government instrumentality (such as a public hospital or ambulance service) can hold the donations or gifts or trust without being at risk of becoming an invalid charitable trust from the perspective of the ATO; and a fund established, for example, by a HAC would therefore be considered charitable, despite its connection to government. The bill will enable a gift fund to operate in a way that is consistent with ATO advice.

In relation to the question asked by the Hon. John Darley, I am advised that the health advisory councils (HACs) are not hospitals and therefore cannot be proclaimed under the Public Charities Funds Act. Therefore, we are required to proceed with this amendment bill. Again, I thank honourable members for their contributions and look forward to the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. J.M.A. LENSINK: It would be appreciated if the minister could perhaps outline what sort of funds are residing within trusts that are unable to be accessed at this stage.

The Hon. G.E. GAGO: At this point, I do not have the details of any exact figures. However, I am advised that it would most likely involve land, other real property and donations.

Clause passed.

Remaining clauses (2 and 3), schedule and title passed.

Third Reading

Bill read a third time and passed.

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