Exclusive: Greens senator Mehreen Faruqi says a review is needed to establish whether guidelines have been breached

This article is more than 2 years old

This article is more than 2 years old

The largest provider of school chaplains, Scripture Union Queensland, has been the subject of a complaint to the tax office questioning whether it has breached its tax deductibility status to collect $33m in donations.

The complaint from a secular organisation, seen by Guardian Australia, notes that the deductible gift-recipient status of SUQ’s schools ministry fund depends on it being for the “furtherance of religious instruction in government schools in Australia”.

But the chaplaincy program is based on pastoral care, not religious education.

SUQ’s chief executive, Peter James, said it is meeting its obligation under taxation law and defended the fund’s tax deductible status by arguing that chaplaincy is “explicitly religious in nature”.

But Prof Ann O’Connell, a charities taxation expert at the University of Melbourne, told Guardian Australia there is “some merit in the argument” that SUQ has breached conditions on tax deductibility.

Morrison defends $1.2bn 'slush fund' for Catholic and independent schools Read more

“Religion per se is not entitled to [deductible gift recipient] status,” she said. “It must be linked to eg education or be a public benevolent fund to qualify.”

O’Connell said there is a debate about whether religion should get tax deductibility for other “worthy things” but it is “certainly not the intent of the legislature as it has made a clear decision not to include a general [deductible gift recipient] category of religion”.

The condition on SUQ’s “schools ministry fund” – that it is for the furtherance of religious instruction – is contained in tax law and acknowledged in SUQ’s financial statements to the Australian Charities and Not-for-profits Commission.

Queensland guidelines state that chaplains “must not be involved in providing religious instruction” although they may do so outside of their chaplain hours. Chaplains must be from a recognised religious group, but they are banned from proselytising in schools.

SUQ’s schools ministry fund has received a total of $33m in tax deductible donations since 2012, including $5.4m in 2017.

In 2017 SUQ spent $21.3m on “chaplaincy expenses” and $4m on “ministry expenses”. Despite separating the programs in its accounts, SUQ says on its website that “all gifts over $2 donated to school chaplaincy are tax deductible, unless otherwise specified”.

The SUQ donation page gives donors the option to donate to “[schools ministry fund] support” for chaplaincy programs at specified schools, including non-government schools like Trinity Christian School.

The complaint said that “it appears that SUQ receives donations for chaplains in state schools into its [schools ministry fund] and provides a tax deductible receipt for those donations”.

“If it is the case that the [deductible gift recipient] status has been granted on the basis of it being used solely for the furtherance of [religious instruction] in government schools, this would constitute a misuse of this restricted fund.”

The complaint argues this “would seem to be a clear breach of the purpose of the fund” and tax deductions on gifts of $28m – the total when the complaint was made in June – “likely constitutes a considerable amount of tax revenue lost from the donors claiming a tax deduction”.

The complainant warned that other providers could suffer from the same defect because all major chaplaincy providers give tax deductible receipts for donations to chaplaincy.

The complainant told the Australian Tax Office that they had made tax deductible donations to Access Ministries Victoria, Generate Ministries New South Wales, the Scripture Union in Queensland, the ACT and Tasmania, Schools Ministry Group South Australia and Youthcare Western Australia.

James – who is also a spokesman for the National School Chaplaincy Association – told Guardian Australia that SUQ “meets its obligations under Australian taxation laws and there has never been an issue raised with us by the ATO”.

“School chaplains provide students with social, emotional and spiritual support, and chaplaincy is explicitly religious in nature,” he said. “Spirituality is an important part of education and is enshrined in Australia’s educational objectives, while religious freedom is an important human right for children.”

States not recording complaints made about school chaplains Read more

Greens education spokeswoman, senator Mehreen Faruqi said: “The federal government is playing this ridiculous game of funding religious chaplains and then pretending their program has nothing to do with religion.”

“The minister for education has real questions to answer as to whether the Scripture Union of Queensland has breached either their tax deductibility status or the guidelines of the school chaplain program,” she said.

“He must commit to a full review of all school chaplain providers around the country to get to the bottom of this.”

The school chaplaincy program received a $247m extension in the 2018 budget. The Greens and various secular groups believe the money should be redirected to pay for school counsellors.

A review of the chaplains program by research consultancy Kantar Public found majority support for the program, although many parents objected to religious views being shared with their children and that parents had a “lack of knowledge” of chaplains’ role.