John Lloyd APS scandal: Should the partisan IPA lose charitable tax status?

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APS Commissioner and IPA member and former director John Lloyd in front of Senate Estimates this week (Image screenshot @abcnews video via @DanConifer)

The politically charged emails between the APS boss and the IPA have again highlighted its partisan nature — does this disqualify it from being a charity? Rosie Williams reports.

Senate Estimates this week have thrown a spotlight on relationships between the highest echelons of the Australian Public Service and rightwing "charity", the Institute of Public Affairs.

The Australian Public Service Commissioner John Lloyd has been quizzed on his email communication with IPA executive director John Roskam for the strongly partisan opinions they contain.

It has been revealed that formal complaints have been made against John Lloyd for breaches of the Public Service Code of Conduct although the specifics of the allegations or who made them remain undisclosed.

The argument animating social media revolved around whether, if it were a union and anti-Liberal sentiments under question, would Senator Wong and the Twitter left be so scathing of the openly partisan behaviour displayed by an APS representative, or would they be talking up the right to political freedom?

It is fair to assume that the interest of many a protagonist has been piqued (and justifiably so) by the close ties between such a high-level mandarin and the right wing Liberal training ground that the IPA has proven itself to be. But is it only John Lloyd’s professional obligations that should be scrutinised, or is it equally problematic that the IPA have been publicly documented discussing partisan politics at such a high level given their obligations under the Charities Act?

For legal purposes, communication with or by a union and communication with the IPA are not comparable activities, at least not from the organisation’s viewpoint. When it comes to political advocacy, registered charities and unions operate under very different rules. Unions are Associated Entities operating under the Commonwealth Electoral Act which provides some transparency regarding their activities. Registered charities, on the other hand, must comply with the Charities Act and, unlike unions, are forbidden from having, as a main purpose, the support of political parties or candidates:

Political purposes

An organisation may have a disqualifying purpose if its purpose is to promote a particular political party or a candidate for public office.

Some things that may show whether or not an organisation has a disqualifying political purpose include:

  • the extent to which the organisation’s promotion or opposition of a political party or candidate aligns with the purposes of the organisation
  • whether the organisation promotes or opposes a party or candidate generally or in relation to specific policies that are relevant to its purpose
  • the extent to which the organisation’s resources are directed at promoting or opposing the party or candidate for political office
  • the links between the between the organisation and the party or candidate, including members in common, campaigns and publications, and
  • the extent to which the organisation’s expressed view of a party or candidate is based on reasoned policy argument or research.

What is particularly ironic in this instance is that the laws proscribing registered charities like the IPA from close ties with political parties (and presumably the APS) were developed out of a report prepared in 2003 by the IPA themselves. Regulation specific to the charities sector is a relatively recent concept, formulated late in the Howard-era through a process during which the IPA was commissioned to write this report as input to the draft legislation.

The report begins with what is, in hindsight, a stunningly hypocritical statement:

Charities have changed the way they do business, the work of charities is more ambiguously political than was once the case, indeed the very notion of a charity is problematic.’

The IPA was particularly concerned with lobbying activities associated with registered charities and with clause 8 of the draft charities bill (excerpt is from the report):

Clause 8 of the draft Bill would exclude from charitable status organisations that have among their purposes:

      (2) (a) advocating a political party or cause;

           (b) supporting a candidate for political office;

           (c) attempting to change the law or government policy; if it is, either on its own or when taken together with one or both of the other of these purposes, more than ancillary or incidental to the other purposes of the entity concerned.

The strong stance taken by the IPA in 2003 on relationships between registered charities and supporting candidates for political office appears to fly in the face of the fact that several IPA representatives have since become members of parliament representing the Liberal party.

Historical annual reports published by the IPA claim ‘no political affiliation whatsoever’ — an ideal which seems to have been abandoned in recent times for a distinctly partisan approach, causing many people to publicly question the legitimacy of their charitable status.

In 2003, after receiving the contract from the Howard Government to provide comment on the draft charities bill (and ironically claim the need for just this kind of scrutiny of charities), the IPA claimed it would publicly release the list of their donors with their next annual report.

'Accountability should be important for think tanks, says [Mike] Nahan, which is why he says the IPA intends for the first time to publish a full list of sponsors and contributions in next year’s annual report.'

A look at their annual reports from the period in question shows no sign of this list. Direct enquiries to the IPA for this list have remained unanswered. For an organisation that has played such an influential role in the legislation governing the charities sector, it is interesting that they appear to have made false promises about their own willingness to be transparent.

AusGov.info data show two organisations with DGR status linked to the IPA:

Enquiries to the charities regulator, the Australian Charities and Not-for-profits Commission, reveal only that it has received nearly 1,700 complaints about Australian charities.

39 complaints related to whether 28 of these charities were operating

… with the disqualifying purpose of either:

  • promoting or opposing a political party or candidate for political office, or
  • engaging in, or promoting, activities that are unlawful or contrary to public policy.

No information was offered as to which charities had been subject to complaint, or the outcome of any subsequent investigations, although the ACNC provides news of compliance measures here.

As the public record indicates, the IPA Research Trust is registered as charity sub-type:

Purposes beneficial to the general public and analogous to the other charitable purposes.'

However, no information has been provided as to how the Institute of Public Affairs Limited gained DGR status, perhaps because this status came from the ATO prior to the founding of the ACNC, which stipulates:

‘Organisations listed by name as a DGR in the income tax law do not need to apply for endorsement.’

That the IPA has managed to establish itself as an Approved Research Institute and by this means obtain DGR status while arguing against well-established scientific viewpoints strikes many people as an offensive exploitation of the legislation the IPA themselves helped to draft.

That the organisation is believed to be representing the interests of multinational corporations instead of Australian citizens raises valid questions about whether they should be entitled to register as a charity and the lack of transparency about their funding sources only reinforces their questionable ethics.

Rosie Williams is a citizen journalist at rosiewilliams.com.au. You can follow Rosie on Twitter @Info_Aus.

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