INTHEBLACK July 2025 - Magazine - Page 19
Almost half of Australia’s
tax-deductible donations
come from people in the top
1 per cent of income earners.
A recent Productivity
Commission report
recommended against
increasing the tax
deductibility of donations.
Singapore has high
tax deductions, but
maintains tighter control
over which charities have
tax-deductible status.
The giving
gap
Tax deductions for the wealthy
have been bolstering philanthropic
funds for some time now. The
challenge remains to make the
mainstream population feel their
contributions count too.
Words Prue Moodie
THE FUSION OF TAX BREAKS
and philanthropy has given rise to what
seems like an embarrassment of donations,
both globally and in Australia. Yet the need
for charity still nearly always outstrips supply.
On the surface, a high level of donations
would seem to be the mark of a kind and
responsible society. Nurturing a community
of givers is the usual government rationale
for providing tax advantages to donors.
Back in 2022, before the Australian federal
election, the Labor party promised to
double donations by 2030, thereby building
a “reconnected Australia”. In that reporting
period, Australia’s charitable donations
reached around A$13.9 billion (including
non-tax-deductible donations), according
to the 10th edition of the
Australian Charities Report.
That’s respectable growth from
approximately A$9.9 billion in 2017.
But it might not tell the whole story.
The proportion of Australians making
tax-deductible donations is trending down,
which could mean either that fewer donations
are being made or less people are claiming
the deduction. Moreover, almost half of
Australia’s tax-deductible donations come
from people in the top 1 per cent of income
earners. Similar trends have been observed
in the US and UK according to the Australian
Government Productivity Commission (PC)
report Future foundations for giving, released
in May 2024.
intheblack.cpaaustralia.com.au 19
