Sea Shepherd defeat highlights pointless regulator

The High Court of Australia has refused to hear an appeal from Sea Shepherd Australia, which had been suing the Australian Tax Office over its decision not to award the organisation deductible gift recipient (DGR) status under Commonwealth charity law. This marks the end of a long legal battle for the controversial marine conservation group, whose aggressive harassment of Japanese whaling ships was earlier this year condemned by a U.S. court as 'the very embodiment of piracy.'

Sea Shepherd had based its appeal on a clause in the Income Tax Assessment Act which says a charity qualifies for tax-deductible donations if its principal activity is 'providing short-term direct care to animals…that have been lost, mistreated, or are without owners.'

This clause is usually applied to shelters that find homes for unwanted pets, or rescue hospitals for pets and wild animals that have been hit by cars or injured in natural disasters.

Three years after the ATO ruled that Sea Shepherd's harrying of Japanese ships did not qualify it for this tax exemption, the courts have now conclusively affirmed that decision. Fortunately, this appeal will not cost the taxpayer anything, since Sea Shepherd has been ordered to pay the ATO's legal costs.

In late 2012, the Gillard government established the Australian Charities and Not-for-Profits Commission (with an annual budget of $15 million) as a new federal regulator for the not-for-profit sector. Its responsibilities include determining which organisations qualify for charitable status, a task formerly handled by the ATO.

During the last election campaign the Coalition pledged to abolish the ACNC as an unnecessary addition to the charity sector's regulatory burden, but abolition will require an act of Parliament. The ACNC's commissioner has been assuring the public that it will be 'business as usual' for the organisation until such an act is passed. Last month, the charity-watchers at the law firm Makinson d'Apice speculated that 'the ACNC is likely to survive due to the complexity in unwinding the legislation connected with it.'

The ATO's sound decision on Sea Shepherd's DGR status and its successful defence of this decision in the courts prove that it is perfectly ready to resume responsibility for determining which organisations should receive charity tax exemptions in the event the ACNC is abolished.

The Coalition should use the occasion of Sea Shepherd's legal defeat to trumpet the ATO's record as a responsible and conscientious adjudicator of charitable status, and press ahead with its plan to abolish the ACNC.

Helen Rittelmeyer is an intern at The Centre for Independent Studies.