Max Wallace & Robert Nola: Asset rich churches should pay fair tax

Religious charities are riding on the back of the ordinary taxpayer, write Max Wallace and Robert Nola

The Anglican and Catholic churches are the wealthiest, with total assets running into the billions.
The Anglican and Catholic churches are the wealthiest, with total assets running into the billions.

Many were dismayed when the Auckland City Council voted, 10 to 6, to give the Anglican Cathedral in Parnell a donation of $3 million for further development. Does the Anglican Church also need public money to rebuild the Christchurch Cathedral?

Charities expert Dr Michael Gousmett has alleged that Church Properties Trustees, the owner of the cathedral, has assets of $180 million with a further $40 million to come from insurance and other income.

So, just how wealthy are New Zealand churches? Members of the New Zealand Association of Rationalists and Humanists have investigated the information available on the databases of the Charities Commission Register available on-line.

Our best attempt to analyse the commission's complex data finds that something in the region of 4000 registered religious charities hold $7.3 billion in equity with $1.4 billion in liabilities.

When we include entities that have religion as a secondary purpose, we estimate the figures climb to over 6500 registered religious charities with $11 billion in assets and $2.1 billion in liabilities. As might be expected, we found the Catholic and Anglican churches are the wealthiest in New Zealand with total assets running into billions. By any measure, churches are seriously rich.

As well as being wealthy, they pay few taxes. According to the Charities Act 5(i), charitable purposes include the advancement of religion. This charitable activity obtains its funds from tax-exempt passive investments, pre-tax income of individual donors, and some active commercial interests, such as the Seventh Day Adventists' company Sanitarium.

As the data indicates, churches have become corporate onshore tax havens which are subsidised by taxpayers so that the religious can pursue their penchant for the supernatural.

The question that arises is whether, in 2013, the tax-exempt status of religion, as distinct from their welfare activities, can be justified. Of course we do not deny that truly charitable works should be tax-exempt but we question the legitimacy of the advancement of religion as a form of charity in itself.

It raises an ethical dilemma for churches with which they need to wrestle: (1) Material wealth is transient and spiritual wealth is the main purpose of a religious life; (2) Their God (in part through the workings of the state) provides the wealth of the world for them to enjoy.

Most churches frequently mention their heartfelt commitment to relieving poverty. But clearly churches have significant assets which increase in value over time. Much of this could well be put to the serious relief of poverty, which, we might have thought, would be the giving away of material wealth in order to better realise their true spirituality.

New Zealand is becoming an increasingly secularised country. At the last Census a declining half of the population said they were Christian but a rising third said they had no religion.

The idea of religion as charity is an old one having its origins in The Statute of Charitable Uses of 1601 introduced in the reign of Elizabeth I.

Recently, courts have looked at this question. In a 1985 case, Centrepoint Community Trust v Commissioner of Inland Revenue, the court questioned the social utility of the charitable status of religion on the grounds that religion was personal and asked why should some members of the community bear a heavier burden of taxation merely because the beliefs of others entitle their organisations to exemptions from taxation?

In a 2005 case, Hester v Commissioner of Inland Revenue, the court raised similar concerns.

In our view, the courts' concerns are well made; it is time that this ancient exemption for churches from taxation was reformed by removing the advancement of religion from the Charities Act. Other forms of personal belief supported by common law rather than statute should also be reviewed.

Max Wallace and Robert Nola are members of the New Zealand Association of Rationalists and Humanists.

Debate on this article is now closed.

- NZ Herald

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