Australia 2015 Budget Impacts Charities

On May 12, 2015, the Australian Government tabled that country’s Budget 2015. Several proposed
measures will affect the operation of public benevolent institutions and health promotion charities in
Australia (“Eligible Organizations”), including proposed amendments to the fringe benefits tax (“FBT”),
a tax payable by employers who provide fringe benefits to their employees. While certain fringe benefits,
such as meals and entertainment, were uncapped in previous legislation, under the proposed amendments
employees will be able to access a cap of up to a grossed-up amount of $5000 worth of fringe benefits, separate from the general FBT amount. As employers, Eligible Organizations were previously subject to
uncapped exemptions under the FBT in this regard, and were able to provide fringe benefits to employees
tax-free. This assisted in attracting quality employees these types of organizations without paying high
private-sector salaries. It is not yet clear how far-reaching these proposed amendments will be and whether
they will affect all charities and not-for-profits currently eligible for FBT exemptions.
Another item of interest for charities and non-profits is the Australian government’s commitment to
continue funding for the National School Chaplaincy Program for the next four academic years ending in
the year academic year 2017 -2018. This program will assist approximately 2900 schools in Australia
engage the services of a school chaplain to provide pastoral care to students in schools. While Canada
does not have similar programs to those Australian initiatives outlined above, charities in Canada may
find it of interest to be aware of developments occurring in the charitable sector in other commonwealth
jurisdictions.