Minerals Council proposal comes as it is accused of spending millions of tax-deductible dollars on political advocacy

This article is more than 3 years old

This article is more than 3 years old

The mining lobby has called for environmental charities to be banned from using more than 10% of their expenditure on advocacy, as a high-stakes battle over the public voice of charities and NGOs intensifies.

A paper released by the Australia Institute on Friday in turn accused the foreign-funded Minerals Council of Australia of spending millions of tax-deductible dollars on political advocacy aimed at reducing its tax liabilities.

A Treasury inquiry is considering changes to the rules on which organisations can claim deductible gift recipient status – the latest stage in a long-running campaign by the Coalition government, miners and some media outlets to limit the advocacy activities conducted by environmental NGOs.

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The inquiry has sought “stakeholder views” on a list of recommendations made by parliamentary inquiries established by the Coalition. They include the proposal to force environmental charities to devote up to 50% of their expenditure to “remediation” and monitor more closely the advocacy activities of all charities.

The Minerals Council of Australia released its submission to the inquiry this week, in which it calls for a further gagging of charities’ advocacy roles, suggesting they be banned from using more than 10% of their expenditure on advocacy.

Currently, charities are allowed to engage in advocacy but it must not include “promoting or opposing a political party or candidate for political office”. The Minerals Council submission contains eight pages of photographs of campaigns by environmental and progressive charities it says break that rule.

The submission also calls for the identity and location of donors to charities that engage in advocacy to be revealed – an issue not raised in the Treasury discussion paper but one that has been raised by another parliamentary inquiry that proposed banning foreign donations to all groups that spend money on political activity.

Not revealing the identity of those donors, the submission says, “constitutes a potential threat to Austalia’s [sic] sovereignty, by allowing foreign interests to exert political influence by covertly funding domestic environmental groups”.



But on Friday the Australia Institute – itself a registered charity – released a paper analysing the degree of tax-deductible advocacy engaged in by foreign-funded mining lobby groups such as the Minerals Council.

It found the Australian mining industry was 86% foreign-owned and had spent more than half a billion dollars lobbying Australian governments over the past decade – most of which would have been a tax deduction for the companies, resulting in forgone tax revenue of about $162m.

The report lays out ways in which the foreign-funded mining lobby has exerted political influence, most of which has aimed at reducing the tax revenue collected from those miners.

The report notes:

Lobbying by Rio Tinto and BHP Billiton has prevented an inquiry into the $75bn-a-year iron ore industry.

The Minerals Council lobbies to maintain subsidies and tax concessions for mining companies that cost Australian taxpayers billions every year. In 2013, taxpayers paid $4.5bn in subsidies and concessions to the mining industry.

The mining industry spent at least $100m from 2010-12 lobbying for the repeal of the minerals resource rent tax, or “mining tax”, which budget papers estimate has reduced tax revenue by $5.3bn.

Hannah Aulby from the Australia Institute, author of the report, said: “Foreign corporate mining interests are attempting to influence government to help increase their profits. They are not acting in the public interest and in fact can distort sound economic decision making.”

Aulby said many Australians thought of some of the big miners as Australian companies but they were mostly foreign-owned.

BHP is 76% foreign owned and Rio Tinto 83%, meaning both companies are officially foreign corporations under Australian law, the report noted.

The push to gag environmental groups has been seen as a threat to the whole charity sector by some in the industry.

The Australian Council for International Development (Acfid) – the body representing Australia’s international development organisations – strongly opposed the proposed limits to the advocacy activities of charities in its submission to the Treasury inquiry.

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“Charities undertaking advocacy has been recognised as both a legitimate activity and one essential to our system of parliamentary democracy,” their submission says. “It is an important approach which charities can use to address the causes of social and environmental problems, rather than just the symptoms – an approach that often requires seeking policy change.”

The chief executive of Acfid, Mark Purcell, told the Guardian the attack on environmental groups was the “thin edge of the wedge”.

“In a liberal democracy you can’t go around trying to shut down groups on the basis of their activities. If they are carrying out work that is of benefit to the community and they’re doing that consistent with their charitable purpose then that’s the test. It should not be governments arbitrarily setting percentages of how much of particular activities you can do.”

Labor’s spokesman on charities and not-for-profits, Andrew Leigh, said the government “seems to think that charities should be seen but not heard”.

“Labor disagrees. We believe that charities and non-profits have an important role to play in advocating for a better world,” Leigh said. “Wouldn’t it be great if the Turnbull government started working with the non-profit sector, rather than waging a non-stop war on charities?”