Fed: GST contract muzzles charities says ALP

AAP General News (Australia)
12-06-1999
Fed: GST contract muzzles charities says ALP

By Stephen Spencer, Economics Correspondent

CANBERRA, Dec 6 AAP - Charities receiving GST assistance from the federal government
would be banned from criticising the government's tax policy, federal parliament was told
today.

The censorship accusations came amid a deluge of criticism from charities over the
government's decision not to completely exempt their grants and fundraising efforts from
the GST.

A draft contract from the GST Start Up Assistance Officer requires all organisations
receiving assistance to not criticise the government.

"The Organisation shall favourably acknowledge the contribution of the Commonwealth
to the Organisation in any correspondence, public announcement, advertising material or
other material produced by, or on behalf of, the Organisation," the draft contract states.

Labor denounced the clause as censorship and compared it to recent revelations in the
commercial radio industry.

"Isn't this just your own hypocritical version of cash-for comment?" Opposition Leader
Kim Beazley asked.

But Prime Minister John Howard denied the government was trying to intimidate charities.

"We're not in the business of engaging in any intimidatory tactics toward charities,"

Mr Howard told parliament.

At least one major charity confirmed it had expressed concern about the clause and
was in dispute with the GST Start Up Office over the condition.

However, the government said the clauses were standard for government contracts, and
received support from an unlikely source, the Australian Council of Service (ACOSS).

"These contracts won't stop us from criticising the scope of the GST," ACOSS president
Michael Raper told AAP.

He said the clauses were a bit extreme, but standard, and were not designed to halt
attacks on the GST.

However, opposition family and community services spokesman Wayne Swan said there was
a clear link.

"The message from the government is clear - if you want the money, then don't be critical
of the GST," he said.

Mr Howard denied the GST would hit the fundraising efforts of local churches, schools
and community groups, because the GST only applies to organisations with a turnover of
more than $100,000 a year.

"I do not know of any pie drives that raise $100,000," Mr Howard told parliament.

But Labor said the $100,000 limit applied to the total turnover of the church, school
or other community group, meaning most would still be hit with the GST, even if its fete
or lamington drive only raised a few thousand dollars.

Treasurer Peter Costello's attempt to turn the attack back on Labor backfired.

"Under the Labor Party, of course, if a charity buys a pie warmer they'll pay sales
tax on the pie warmer," he told parliament, prompting opposition treasury spokesman Simon
Crean to accuse him of misleading parliament.

"Isn't it the case that, under existing law, a charity buying a pie warmer today simply
has to quote its sales tax exemption number to buy that pie warmer free of sales tax?"

Mr Crean replied.

ACOSS and other major charities are demanding the government immediately exempt all
charities from the GST.

"The simple and easy solution is to provide a GST exempt certificate to church and
charitable services," Catholic Health Australia executive director Francis Sullivan said.

It was also revealed today the number of businesses expected to be hit by the GST had
jumped by 200,000 to 1.8 million.

The government originally estimated 1.4 million businesses would be required to register
for the GST in 2000-2001, rising to 1.6 million in 2001-2002.

AAP ss/mfh/was/de d

KEYWORD: TAX NIGHTLEAD

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