Issue
Whether an organisation which primarily exists to provide a forum for the representation of the views of its members on issues concerning rural fire fighting standards and procedures, is a 'public benevolent institution' for the purposes of Item 4.1.1 of subsection 30-45(1) of the Income Tax Assessment Act 1997, subsection 57A(1) of the Fringe Benefits Tax Assessment Act 1986, and Item 140 of Schedule 1 of the Sales Tax (Exemptions and Classifications Act) 1992.
Decision
No, the organisation is not a 'public benevolent institution' within the accepted meaning of that term.
Facts
An organisation has as its principal objective the representation and consolidation of the views of its members on issues concerning rural fire fighting standards and procedures. Membership of the organisation is open to individuals involved in rural fire fighting.
The principal activities of the members of the organisation are to meet, plan and implement strategies that will enable the rural fire services to operate efficiently in protecting property and life arising from fires and other emergencies. The services rendered by the organisation are free. The organisation's activities are conducted on a non-profit basis.
Reasons For Decision
Taxation Determination TD 93/11 states that a 'public benevolent institution' is an institution which, among other things, has been established to benefit a section or class of the public, has as its main or principal object, the relief of poverty, sickness, distress, misfortune, destitution or helplessness, and provides benevolent relief directly to those in need of assistance. That the activities of an organisation have a tendency to relieve distress and suffering is not sufficient in itself to characterise an organisation as a 'public benevolent institution' ( Australian Council of Social Service Inc v Commissioner of Pay-roll Tax (NSW) 85 ATC 4235; 16 ATR 394). The main object of the organisation must be the relief of distress or suffering.
Although the organisation in the present case may provide an indirect benefit to the community in general by advocating the use of new technology or new techniques in fighting bushfires, the organisation's principal object is to advocate its members' views on rural fire fighting issues. The organisation does not provide benevolent relief directly to people in actual need of benevolence.
An organisation that does not itself provide direct benevolent assistance but which co-ordinates the benevolent activities of its members may nonetheless be a public benevolent institution where the circumstances are the same as in Australian Council for Overseas Aid v FC of T 80 ATC 4575; 11 ATR 343 (Taxation Ruling IT 2438). In particular the members of the organisation must predominantly be 'public benevolent institutions', and the organisation must have a common benevolent purpose with its members.
In the present case, the members of the organisation are individuals, not 'public benevolent institutions'. Furthermore, the organisation does not have a common benevolent purpose with its members. The organisation was established to represent the views of its members, whereas the members themselves have the benevolent purpose of protecting life and property from bush fires. Accordingly, the organisation does not qualify as a 'public benevolent institution'.