House of Representatives

Explanatory Memorandum

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

Chapter 2 - Deductible gift recipients

Outline of chapter

2.1 Schedule 2 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to update the lists of deductible gift recipients (DGRs).

Context of amendments

2.2 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 under that Division.

2.3 The amendments in Schedule 2 will assist relevant funds and organisations to attract public support for their activities.

Summary of new law

2.4 These amendments add the organisations in Table 2.1 to the list of DGRs and repeal the DGR listing of Herbert Vere Evatt Memorial Foundation Incorporated (otherwise known as the Evatt Foundation).

Detailed explanation of new law

2.5 Schedule 2 lists the organisations in Table 2.1 as DGRs. [Schedule 2, items 1 to 3 and 5]

2.6 The Chifley Research Centre Limited was established to undertake economic, social, cultural and political research. The centre publishes and disseminates its research results to the public and thereby promotes a better understanding of the Australian policy environment. In addition, Schedule 2 repeals the DGR listing of the Evatt Foundation, that was listed as the Herbert Vere Evatt Memorial Foundation Incorporated, to reflect the foundation's agreement to transfer the gift deductibility status from the Evatt Foundation to the Chifley Research Centre. [Schedule 2, items 1, 4, 7 and 12]

2.7 Crime Stoppers Northern Territory Program encourages community involvement in the apprehension and conviction of criminals, and assists in the reduction in crime by the provision of information to the proper authorities. [Schedule 2, items 2 and 8]

2.8 The Government announced in the former Minister for Revenue and Assistant Treasurer's Press Release No. C059/05 of 25 June 2004 that it will legislate to ensure that Playgroup Associations could benefit from being able to receive tax deductible gifts. Playgroup WA (Inc), Playgroup Queensland Incorporated, Playgroup Tasmania Inc., Playgroup NSW (Inc)., ACT Playgroups Association Incorporated, and the Playgroup Association of Northern Territory Incorporated provide positive learning and social experiences for children, families and carers who may otherwise be socially isolated and disadvantaged. [Schedule 2, items 3 and 10]

2.9 The Rotary Club of Katoomba Inc - Convict Roadbuilders and Pioneer Memorial Wall Fund was established to erect a memorial to recognise the important contribution of the convict teams involved in building the road over the Blue Mountains in 1815 and to those who lost their lives in the process. [Schedule 2, items 5 and 11]

Application and transitional provisions

2.10 The amendments to list the organisations in Table 2.1 apply from the dates of effect shown in that table. [Schedule 2, items 1 to 8]

2.11 The amendments to repeal the listing of the Evatt Foundation will take effect from 20 May 2005. [Schedule 2, items 4 and 12]