House of Representatives

Explanatory Memorandum

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

Chapter 5 - Deductible gift recipients

Outline of chapter

5.1 Schedule 5 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to update the lists of deductible gift recipients (DGRs) and extend the period for which deductions are allowed for gifts to a fund that has time-limited DGR status.

Context of amendments

5.2 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.

5.3 These amendments in Schedule 5 will assist relevant funds and organisations to attract public support for their activities.

Summary of new law

5.4 These amendments add certain organisations to the list of specifically listed DGRs and extend the period for which deductions are allowed for gifts to a fund that has time-limited DGR status. The extension will support the completion of work of the relevant organisation.

Detailed explanation of new law

5.5 Schedule 1 lists the organisations in Table 5.1 as DGRs. [Schedule 5, items 1 to 10]

5.6 The International Specialised Skills Institute Incorporated runs a scholarship programme which assists eligible recipients of the programme to travel overseas to acquire and develop specialised skills relevant to their area of expertise and to bring these skills back to Australia. The programme covers industry sectors such as engineering, construction and food trades. [Schedule 5, items 1 and 7]

5.7 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 5, items 1 and 10]

5.8 C E W Bean Foundation seeks to construct a memorial in the grounds of the Australian War Memorial and develop an honour roll to commemorate war correspondents that have been killed in conflict since 1885. The Foundation also promotes the work of war correspondents including the collection, preservation and exhibition of this work and the commissioning of books and lectures. [Schedule 5, items 3 and 6]

5.9 The Vietnam War Memorial of Victoria Incorporated was established to assist the construction of a memorial in the Dandenong region of Victoria to commemorate Australian and Vietnamese soldiers who fought on the same side in the Vietnam War. [Schedule 5, items 3 and 9]

5.10 The Australian Red Cross Society-US 2005 Hurricane Relief Appeal and The Salvation Army Hurricane Katrina Relief Appeal were established to collect donations to assist the disaster relief efforts in the aftermath of Hurricane Katrina that devastated southern areas of the United States of America. [Schedule 5, items 4, 5 and 8]

5.11 Xanana Vocational Education Trust has as its principal purpose the development of vocational education and training in Timor Leste, by providing scholarships and subsidised education for youths across Timor Leste to encourage further education and training. [Schedule 5, items 4 and 10]

Extending periods for which gifts are deductible

5.12 Schedule 5 extends the period for which deductions are allowed for gifts to the organisation in Table 5.2. [Schedule 5, item 2]

5.13 The City of Onkaparinga Memorial Gardens Association Incorporated was established to develop a memorial Eternal Flame in the Onkaparinga Memorial Gardens, to commemorate the ninetieth anniversary of the Gallipoli landings, on 25 April 2005. The Eternal Flame forms the centrepiece of the Memorial. [Schedule 5, item 2]

Application and transitional provisions

5.14 These amendments to list and extend the organisations in Tables 5.1 and 5.2 apply from the dates of effect shown in those tables. [Schedule 5, items 1 to 10]