WORKER RIGHTS
 MEDIA BIAS
The Hidden Wealth Of Basic Religious Charities
Religious charities should not be able to hide their wealth- updated with comment from Andrew Leigh.
With the devastating news that Australia's highest ranking Catholic has been found guilty of sexual offences against children (a decision later overturned on appeal), the world's attention has put the spotlight on the treatment of victims by representatives of the Church.
Much has been written about the limited compensation made available to victims and this scrutiny is a hot topic given that the man responsible for the Melbourne Response faced potential conviction of similar offendences, a clear conflict of interest.
Helen Last (chief executive of the In Good Faith Foundation) told The Age (Feb 2018) that there is 'a huge inequity between the Catholic Church's wealth and their responses to survivors'.
The Catholic Church is considered notoriously secretive about their finances. The Age reported that information sought by the Victorian Parliamentary Inqiry into the handling of child abuse by religious organisations in 2013 was never supplied to the Inquiry. So what information is available for public scrutiny and how can so much wealth be hidden from public view?
As there is no flag to divide reporting charities into their religious denominations, the closest available searches (courtesy of AusGov.info) can only total charity financial information by keyword present in their legal name. This kind of search only picks up charities (which includes private schools, hospitals and nursing homes) which have the word 'Catholic' in their name. This most basic search shows an aggregate total assets for matching charities being nearly $8 billion dollars.
Yet the investigations carried out by The Age and reported a year ago suggest this is a vast under-estimation of the wealth of the Catholic Church. While there is no easy way (of which I am aware) to establish a singular list of every Australian organisation owned by the Catholic Church, such a list would only get us so far because the full transparency relies on there being public or at least government access to the financial information for each and every one of these organisations.
No problems you say, isn't that what the charities regulator is for, to require financial reporting from Australia's charities? By rights one would reasonably expect that any of us could contact the ACNC and simply ask them to put a figure on the wealth of the various religious denominations. After all what is the point of a charity regulator if they can't answer basic questions pertinent to establishing the parameters for holding Australian charities to account?
While this is true for most types of charities, there is an exception in the legislation that applies specifically to religious organisations or Basic Religious Charities. It is these Basic Religious Charities that may hold the key to understanding the true extent of the wealth of Australia's religious organisations. The data now made available to the public on charity finances extends back only to 2014 but specifically excludes an unknown portion of wealth held by Basic Religious Charities (BRC).
Prior to the establisment of the Australian Charities and Not-for-Profit Commission to administer the ACNC Act which regulates the charity sector, charities reported to the ATO. It was under the last Labor government that the ACNC Act was introduced and provided a dissenting report to the Liberal's attempt to repeal the Act after winning government in 2013.
Kevin Andrews, as member for Menzies requested carriage of the ACNC legislation while acting as Shadow Minister for Social Services in opposition under Tony Abbott. Once the Liberals won government, Andrews (through his advisor Ted Lapkin a former IPA research fellow) moved to repeal the ACNC Act, throwing the newly established regulator into chaos.
Word has it that the strong opposition to public financial reporting under the ACNC Act was largely attributed to the Catholic Church which Kevin Andrews is thought to have strong ties to.
A senior source with expertise in the ACNC Act believes the legislation only got through by virtue of providing the exception in the Act relieving Basic Religious Charities from the requirement of reporting their finances to the ACNC. Furthermore it is believed that it is in these Basic Religious Charities that much of the Catholic Church's wealth is concealed.
'That’s why Pell resisted the ACNC so much, and got Kevin Andrews at the time to commit the Coalition to abolish [the ACNC] (which they didn’t follow through with)... It would bring a huge amount of transparency to church wealth... At the moment church trusts etc, such as the ones that hold all the wealth for dioceses, are BRCs'.
Not only would removal of the exception bring to light assets that are currently hidden from view, it would also bring church officials under ACNC governance principles. Given the significance of the governance challenges facing Australia's religious sector it is imperative that these organisations be brought under proper scrutiny and be held to account for their behaviour past, present and future.
The ACNC's first five year review completed last December suggested a re-examination of the Basic Religious Charity exception in the ACNC Act but no strong commitment has been made.
I emailed Andrew Leigh for Labor's position on the removal of the exception and comment has now been provided:
Patrick McClure's report into the ACNC contained a number of recommendations around Basic Religious Charities. Sadly, that report seems to have languished on the shelf as the Coalition switched to its 6th minister responsible for the ACNC. Labor will explore all recommendations in the McClure report, in conjunction with stakeholders, if we win office.
Update to this story: In March 2020, in response to the five year review of ACNC legslation, the government decided to ignore recommendations made by the ACNC itself seeking to remove the Basic Religious Charities reporting exception from the ACNC Act, allowing Ausralian churches to continue to hide their true financial position from both the regulators and the public.
The clock is ticking. It was always a political fix during the ACNC’s creation (I know as I was the government adviser who worked on creating the fix), and eventually it will go. There is no credible policy rationale to exempt BRCs from transparency. How soon, I don’t know.— Krystian Seibert (@KSeibertAu) February 26, 2019
Any Church Charity organisation that receives money from Australian #taxpayers must be made to be transparent & accountable— CLAN (@CLAN_AU) March 2, 2019
Why the special treatment for BRC ?
Orgs Must report their finances to @ACNC_gov_au just as CLAN does @ACNCommissioner @ALeighMP @billshortenmp
It was impossible to ignore the contested political backdrop. As Commissioner, I was responsible for a start-up venture that was threatened with immediate abolition should the government change. During the caretaker period in August 2013 I sought advice from the Australian Government Solicitor. The advice was unambiguous: as a statutory office-holder, I was legally required to implement the ACNC Act until Parliament repealed or modified the legislation. As an independent officer of the Parliament, not an appointee of the government of the day, I could only be removed with parliamentary approval. (Susan Pascoe, Inaugural ACNC Commissioner)
'I'm well aware that Sydney lobbied the opposition very hard on this issue, says Senator Stephens. 'They got to Kevin Andrews early.' - Senator Ursula Stephans (SMH 2013)