House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello MP)

Chapter 1 Deductible gift recipients

Outline of chapter

1.1 Schedule 1 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to update the list of deductible gift recipients (DGRs) and extend the period for which deductions are allowed for gifts to certain funds that have time limited DGR status.

Context of amendments

1.2 The income tax law allows taxpayers to claim income tax deductions for gifts of $2 or more to DGRs. To be a DGR, an organisation must fall within a category of organisations set out in Division 30 of the ITAA 1997, or be listed by name under that Division.

1.3 DGR status assists relevant funds and organisations to attract public support for their activities.

Summary of new law

1.4 The amendments add certain organisations to the list of specifically listed DGRs and extend the period for which deductions are allowed for gifts to certain funds that have time limited DGR status. The extension will support the completion of work of the relevant organisation.

Detailed explanation of new law

1.5 Schedule 1 lists the organisations in Table 1.1 as DGRs. [Schedule 1, items 1 to 15]

1.6 The Don Chipp Foundation Ltd is an independent research body committed to research and public debate on environmental, social, cultural, economic and political issues. [Schedule 1, items 2 and 9]

1.7 Lingiari Policy Centre seeks to facilitate the social and economic advancement of Indigenous Australians through informed and creative ideas, research and opinion on issues of national importance to Indigenous Australians. [Schedule 1, items 2 and 10]

1.8 Nonprofit Australia Ltd seeks to work with not-for-profit leaders, corporate government, foundation investors, and individuals, to improve the viability of not-for-profit organisations for the benefit of the Australian society. [Schedule 1, items 8 and 11]

1.9 Playgroup SA Inc offers valuable support to parents and their children through the provision of public low-cost facilities to assist small children, particularly those socially disadvantaged, to develop vital skills in preparation for pre-school. Playgroups facilitate positive learning and social experiences for children, families and carers. [Schedule 1, items 4 and 12]

1.10 Point Nepean Community Trust was established to manage, protect and conserve land formerly occupied by the Department of Defence at Point Nepean in Victoria until the land is transferred to the Victorian Government, for incorporation into the Point Nepean National Park by June 2009. [Schedule 1, items 8 and 13]

1.11 St Mary's Cathedral Restoration Appeal Incorporated assists the St Mary's Cathedral in Hobart to raise money for the purpose of conducting urgent and critical repairs to the roof and stained glass windows of St Mary's Cathedral. [Schedule 1, items 8 and 15]

1.12 The Ranfurly Library Service Incorporated collects reading material from Australia, for children and adults, to distribute in schools and community libraries throughout Papua New Guinea and the South West Pacific region. [Schedule 1, items 5 and 14]

Extending periods for which gifts are deductible

1.13 Schedule 1 extends the period for which deductions are allowed for gifts to the organisations listed in Table 1.2. [Schedule 1, items 1 to 15]

1.14 The Bowral Vietnam Memorial Walk Trust Incorporated was established to raise funds to provide a memorial for the recognition, comfort and benefit of the Vietnam War veterans and their families. [Schedule 1, item 3]

1.15 The Dunn and Lewis Youth Development Foundation Limited was established to build a complex to serve as a memorial, as a recreational outlet and as a vocational training centre to link young people in Ulladulla with traineeships and other employment opportunities. [Schedule 1, item 7]

1.16 St Paul's Cathedral Restoration Fund assists St Paul's Cathedral in Melbourne to raise money for urgent restoration and critical repair work which is required to preserve the Cathedral building. [Schedule 1, item 6]

1.17 The purpose of the Yachad Accelerated Learning Project Limited is to improve the educational outcomes of Indigenous students through training Australian teachers using programmes developed through the Hebrew University of Jerusalem. The Project seeks to improve teaching and learning outcomes through a greater understanding of the culture and learning styles of Indigenous students from rural and remote communities. [Schedule 1, item 1]

Application and transitional provisions

1.18 The amendments to list and extend the organisations in Tables 1.1 and 1.2 apply from the dates of effect shown in those tables. [Schedule 1, items 1 to 15]