Australia’s largest supplier of school chaplains has labelled the Albanese government’s decision not to extend its eligibility to receive tax deductible gifts “disappointing and unexpected”.
Scripture Union Australia has warned the decision would probably result in cuts to chaplaincy services after Labor allowed its deductible gift recipient (DGR) status, previously granted by the Morrison government, to lapse.
The largest provider of school chaplains, Scripture Union Queensland, had been the subject of a complaint to the tax office questioning whether it had breached its tax deductibility status to collect $33m in donations.
The complaint noted that the deductible gift-recipient status of SUQ’s schools ministry fund depended on it being for the “furtherance of religious instruction in government schools in Australia”.
The ATO has never revealed the outcome of the complaint, citing secrecy provisions in taxation legislation.
The Morrison government temporarily fixed the potential defect in the 2021-22 budget by specifically listing the chaplaincy provider for DGR status from 1 July 2021 to 30 June 2023.
In early July, SU Australia revealed this status had not been extended, and as a result it “will no longer be able to issue tax-deductible receipts for donations made [after 1 July 2023] to support a chaplain’s in-school hours”.
In an update to its website, since removed, SU Australia explained that “since mid-2000 the [ATO] has allowed your financial donations for chaplaincy in public schools to be tax deductible”. “However, the ATO has since changed its stance on this.”
The group chief executive of SU Australia, Peter James, said the decision of the federal government to decline its request “will likely mean some cutbacks to chaplaincy services, however it is too early to predict to what extent”.
“While chaplaincy receives government funding, SU can only provide the number of chaplains, hours and services because of the donations made by thousands of community supporters,” he said.
James said financial support “directly translates into additional hours of wellbeing services for students in government schools” meaning loss of donations due no longer offering tax deductibility “will affect these hours”.
Since its election in May 2022 the Albanese government has reformed the $60m-a-year program by allowing schools the option to choose either a professionally qualified secular student welfare officer or chaplain.
Queensland Parents for Secular State Schools (QPSSS) has argued the fact SU Australia no longer accepts tax deductible donations for chaplaincy is further evidence for the complaint made to the Australian Taxation Office in 2018 that it inappropriately allowed donors to claim a tax deduction.
QPSSS complained that Scripture Union Queensland claimed to be able to receive donations to its ministry fund for the “furtherance of religious instruction in government schools in Australia”, despite the fact the chaplaincy program is based on pastoral care, not religious education.
QPSSS said that “school chaplaincy was an ill-conceived and poorly designed program from the outset”. It cited the fact more than “$1bn of taxpayer money been funnelled to religious organisations to place people hand-picked for their religious beliefs into diverse public schools”.
“The public purse has potentially been deprived of millions of dollars if religious organisations providing chaplains have wrongly issued tax deductible receipts for donations for school chaplaincy.”
QPSSS wants the chaplaincy program scrapped in favour of additional funding to state education departments “to directly employ student wellbeing officers selected on merit alone”.
This would remove the “blurred lines about what support workers should and should not do in terms of injecting religion into the role”, it said.
In 2018 Scripture Union Queensland rejected the charge it had inappropriately claimed tax deductible status for chaplaincy, saying it “meets its obligations under Australian taxation laws and there has never been an issue raised with us by the ATO”.
Asked why it no longer accepts tax deductible donations for chaplaincy, given its earlier position that this was allowable, James said: “SU Australia has always acted within the scope of our DGR entitlements and under advice.”
