eligion is big business inAustralia. If it were a corpo-ration, it would be one of thebiggest and fastest-growingin the country, accountingfor more than $23 billion inrevenue in 2005, employinghundreds of thousands of staff (salaried andvolunteers) and wielding unsurpassed politi-cal and social clout.For more than 100 years, this hidden giantof the Australian economy has been allowedto expand its business interests — rangingfrom education, health, welfare, and employ-ment services, to art galleries, businessachievers conferences, parking lots, bankingand finance, dry-cleaning operations and tel-evision studios — by winning a bigger andbigger share of government concessions andgrants, getting tax-free status and operatingvirtually outside the control of the regulatoryauthorities. In the past year, religious groupshave become more business-savvy, many of them applying to the Australian PrudentialRegulation Authority (

PRA

) for exemptionsto allow them to offer financial services andproducts to customers.This situation could be about to change.In recent months, several initiatives havebeen set in motion by a political party, afew academics and

PRA

to make religiousgroups more accountable, particularly intheir commercial enterprises.The reasons are twofold: the FederalGovernment is transferring more money toreligious entities, and the religious groupsIn the

BRW Charities

report, almost half the 200 organisations on the list are religiousgroups. The Catholic Church dominates thelist, with 31 operations, and it took the lion’sshare of the revenue — 40.8% — with its vastoperations spreading into education, hospi-tals, aged-care facilities and business ven-tures such as insurance companies, fundsmanagement and media. All up, it raked inmore than $16.2 billion in 2005, up 8.3% onthe previous year. This includes the $8.9 bil-lion earned by organisations on the top 200list and another $7 billion from donations,health, welfare and other businesses suchas mortgage broking. It also controls morethan $4 billion through various super fundsthat

BRW

could locate.If the Catholic Church were a corporation,it would be one of the top five in the country.On

BRW’s

list of the top 200 not-for-profitorganisations, the Catholic Church has fouroperations in the top 10, nine in the top 20and 16 in the top 50. The Catholic Churchin Australia is believed to own assets worthmore than $100 billion. It is the largest prop-erty owner in Australia and owns schools,hospitals, parishes and land in prime loca-tions across the country.The next in size is the Uniting Church,which snaffled 11% of the revenue of the top200 not-for-profits in Australia, or $2.4 bil-lion. These businesses are predominantlyschools and health services.The third biggest church is the AnglicanChurch, representing 9.3% of revenue on thetop 200. The Anglican Church had revenue

Some religious organisations are taking advantage of lax taxation regulations,to the cost of ordinary Australians.By Adele Ferguson

God’s

business

themselves are becoming more conscious of business practice. The upshot is that the reli-gious sector lifted its revenue almost 10%in 2005 as it continued to move into newbusiness markets such as financial services,business directories, business conferencesand motivational speeches.Religious groups are not required to fileincome tax returns. They receive exemptionson income tax, GST, fringe benefits tax (of more than $15,000 per employee), stampduty on property transfers, payroll tax onnon-commercial activities, land tax and rates.And unlike other countries, except for Israeland Hungary, religious groups in Australiado not have to pay tax on commercial busi-nesses or pay capital gains tax on the sale of assets. And if they move into financial serv-ices, they are free of the strict regulations andcompliance rules imposed on banks underthe Banking Act. Better still, once an exemp-tion is granted, there is no sunset clause or areview by

PRA

of its operations.The 10 biggest religious groups, includingthe Roman Catholic Church, the AnglicanChurch, Uniting, Salvation Army, Baptist,Seventh Day Adventist and the Pentecostalchurches, generated a staggering $23.3 bil-lion in revenue in 2005, up 8.2% on 2004.That does not include the hundreds of millions of dollars donated by the variouscongregations on the collection plates andcredit card machines from the thousandsof parishes last year. Nor does it include themoney made from businesses outside thetop 200 charities.

June 29–July 5, 2006

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P A U L J O N E S

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June 29–July 5, 2006

The Democrats plan to do this by inves-tigating several policy options to reform thesector, including implementing the Italianand Hungarian systems whereby citizenscan opt for up to 1% of their taxable incometo be donated to the charity of their choice.Another option is to have a referendum,promote the establishment of a charitiescommission (as in Britain and New Zealand),establish a single specialist legal structurefor the entities so that the multiple laws thatnow apply are streamlined, and make reli-gious groups that receive taxpayer funds toprovide social services agree to run secularprograms, not use the money for religiousworship, instruction or proselytising, anddrop from their hiring policies all forms of religiously based discrimination.The concern for the Australian Democratsand academics such as Max Wallace of theAustralian National University is that provi-sion of money to religious organisations canmean clients are denied services availableelsewhere. Hospitals run by the CatholicChurch, for example, will not conduct vasec-tomies, tubal ligation or abortions, althoughthey are routine in other public hospitals.Wallace says: “People in many parts of Australia are discriminated against by nothaving an alternative hospital provider.”Wallace says the Government is, in effect,using public money to help religious groupsto proselytise. He says that, because theyare exempt from tax, they have a competi-tive advantage in contesting governmentcontracts. The best example is SanitariumHealth Food Company, which belongs tothe Seventh-Day Adventist Church andhad revenue of $275 million. But there areother examples. The YMCA (Young Men’sChristian Association) offers services in theleisure industry, managing facilities for localgovernment. Because it has a public benev-olent institution status, it has access to taxbenefits that even local governments do nothave. This means in tenders for contractswith other commercial enterprises it oftensucceeds because these tax concessionsmean it can undercut the prices competitorsquote.

The shrinking parishes

Despite this growth in power and revenue,traditional churches such as the CatholicChurch, Anglican Church and UnitingChurch continue to lose their parishion-ers from old age, disenchantment withreligion or a flight to a groovier brand of And earlier this year, the Federal and NSWgovernments announced they would eachcontribute $20 million to the CatholicChurch for the 2008 World Youth Day inSydney, to be attended by the Pope.The religious sector does a lot of good.Most volunteers are religious, and the serv-ices they offer fill gaps the governmentmisses. But not everyone is happy aboutreligious organisations gaining so much fromgovernments. The Australian Democrats haveput out a position paper on the role of reli-gion and the state. It says: “This paper is aguide to the debate the Australian Democratswish to motivate in respect to the role of religion and politics and the separation of church and state, and what, if any, policieswe should pursue to ensure that Australia isa democratic society that respects and repre-sents the views of all citizens.”It goes on: “The Australian Democratsare concerned about the influence the grow-ing conservative neo-liberal religious right ishaving on public policy, the transfer of majorgovernment services predominantly to thereligious sector, and the lack of transpar-ency and accountability afforded to religiousorganisations. Specifically, we are concernedthat democracy and the commitment to free-dom, equality and tolerance are being com-promised. And that, without the separationof church and state, governments are com-promised in their duty to treat all citizensequally and to remain religion-neutral.”Although the Australian Democrats havelost a lot of political clout, they still haveenough of a voice to get the debate going,something the coalition and Australian LaborParty have steered clear of for fear of upset-ting the many religious voters.of $2.03 billion in 2005, up 7.2% on theprevious corresponding period. Businessesinclude schools, retirement villages, Angli-care, the Brotherhood of St Laurence and theaged-care operator Benetas. But the AnglicanChurch owns much more than this. It oper-ates a huge super fund, counselling servicesand other businesses.The Baptists expanded their revenue basefaster than any other religious group, up37% to $606 million over the past year,largely due to the fund-raising efforts of theprominent Baptist minister Tim Costello.Affiliated organisations such as World VisionAustralia, Baptist Community Services NSWand ACT and Queensland Baptist Care allenjoyed double-digit revenue growth. WorldVision lifted its revenue 55% due to Costello’sefforts raising money for the tsunami onBoxing Day 2004.

Church and state

The business of religion has never been big-ger and stronger than under the HowardGovernment. Churches are given more than$10 billion a year in government grants tofund church schools. They run public hos-pitals and residential aged-care and disabil-ity services. They also received a big annualcash injection in 1996 when the HowardGovernment eliminated the CommonwealthEmployment Service and issued contractsworth hundreds of millions of dollars,mostly to faith-based services. More recently,contracts of similar size were awarded to thereligious sector to provide counselling forparents involved in custody disputes underthe new Family Law Act. Religious organi-sations will now receive $20 million annu-ally to provide abortion counselling services.

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