Aid/Watch Incorporated v Commissioner of Taxation

there is respect for the rights of indigenous people and a recognition of their expertise in ecological management.

aid agencies, development banks and export credit agencies conduct full and regular [consultations with] community organisations, regarding the identification, planning, implementation, monitoring and evaluation of projects.

there is accountability and transparency in the Australian aid and export credit programs including freedom of information on all aspects of projects and programs of development agencies and multilateral development banks.

there is greater recognition of women's needs and greater involvement of women on development projects, and greater gender equity at all levels of the development process, including in consultancy firms contracted to implement aid programs and projects.

there is a halt to structural adjustment programs that contribute to environmental degradation and dislocate or damage the poorest populations.

there is an increased proportion of appropriate professional staff in Australia's official overseas development agency (currently AusAID), official Export Credit Agency (currently EFIC) and multilateral development agencies and consultancy firms contracted for aid programs and projects and the development banks.

there is increased funding of development education activities within Australia and an increased public awareness of the environmental and social impact of the Australian Overseas Development Assistance Program and related private investment, including input into environmental and developmental studies."

1. The Administrative Appeals Tribunal ("the Tribunal") said that two threads ran through the detailed objects described in the appellant's constitution.

"The first is to ensure local community involvement in the planning and implementation of aid projects. The second is to ensure that aid is delivered in an environmentally effective manner."

Those are certainly two of the themes. But there are others. They relate to the role of indigenous people, consultations with community organisations, accountability and transparency, women, professional staff and educational funding.

1. The way the appellant conducted its activities: the findings. Turning from the appellant's purposes as stated in its constitution to the way it conducted its activities, the Tribunal found that those activities accorded with the appellant's formal objectives of monitoring, researching and campaigning to improve the effectiveness of aid delivery. They included "publishing reports and assessments following its monitoring and research with the object that the reports and public response to them will influence government." The Tribunal gave numerous examples of the appellant's activities - submissions to government, reports, and other publications. The Tribunal found, indeed, that the "whole object" of the appellant was to influence public opinion, and ultimately government agencies and government itself. The Tribunal also said that the appellant's object was "to promote the effectiveness of aid, both by ensuring that it is delivered where it is intended and by ensuring that its delivery is environmentally effective" (emphasis added).
2. The Tribunal said that "a fundamental part" of the appellant's work was "campaigning, very often against government". As the Full Court of the Federal Court of Australia ("the Full Court") said, echoing the repeated use of that expression by the Tribunal, the appellant's role was "campaigning". The Full Court also said that its goal was "to influence, and thereby to change, the way in which aid is delivered." The Tribunal found that Dr Goodman, Chair of the appellant, had said in the appellant's 2005 Annual Report that it was "campaign focused" and "dedicated to pursuing global justice" by "targeting the policies and practices of inter-governmental institutions, transnational corporations, and, most especially, the Australian Government and its allies." The Tribunal found that he also said that the appellant claimed to expose "injustices, whether committed in the name of power politics or economic interest, and [argued] for alternatives based on the principles of sustainable livelihood, environmental justice and global equity." The Tribunal found that the appellant's "Campaign Strategy" for 2005/2006 identified various goals. One goal was to "expose the corporate beneficiaries of the aid programme". Another was to "expose the disparity between aid policy and practice". Another was to "reveal Australian aid flows to communities in conflict." Another was to "expose the corporate beneficiaries of [International Financial Institutions] lending". Another was to "demand a complete phase out of all [International Financial Institutions] support for extractive industries (oil, gas and mining)". Another was to "support communities impacted [sic] by the Australian aid and trade programme". Another was to "demand [that] core labour standards be adopted by all [International Financial Institutions] as conditions of support". Another was to "halt the pro-privatisation of water policies at all [International Financial Institutions]". Another was to "expose the environmental and social impacts of the Australian aid and trade programme". The Tribunal also found that every publication by the appellant in evidence before the Tribunal contained "adverse comments relating to Australian government policy and AusAID activities, in particular." The Tribunal specifically identified as an example a "major report" by the appellant which "placed emphasis upon a conclusion that significant amounts of money, which were not directly related to aid, were reported as expended on the aid program." The Tribunal noted that that report concluded with a "call to action to government" to "get real with our aid program." Finally, the Tribunal found that the appellant was concerned with the "commercialisation" of aid and the provision of aid money to private Australian companies, a practice which the appellant described as "boomerang aid"; had "severely" criticised the operations of the World Bank; had advocated the abolition of an Australian agency, the Export Finance and Insurance Corporation; and had "opposed" the Free Trade Agreement between Australia and the United States of America.
3. The way the appellant conducted its activities: the evidence. Those conclusions of the Tribunal were supported not only by the evidence to which the Tribunal did refer, but also by other evidence to which it did not refer. The appellant described itself as a group that "campaigns on Australian involvement in overseas aid and trade projects, programs and policies." It described itself as an "activist group" and an "activist and solidarity organisation". It said that its "activist" and "[p]rotest oriented" nature was one of its "[s]trengths". It claimed to employ a "multi-level strategy to effect change". The appellant had issued media releases which "exposed" the Australian Government's "abuse of its aid program". The appellant described Australia's aid program as "mired in domestic political expediency". The appellant's constitution had been amended in 2000 to remove the statement that it "works to ensure that aid reaches the poorest in the community" from the start of its objectives. One report prepared by the appellant noted that it had been calling for one specific policy change "for almost 12 years".

Fourth class: generating debate about how poverty is best relieved

1. In relation to the fourth class, the most fully developed way in which the appellant put its case, at the very end of its address in reply, was to say that it "seeks to generate debate about how poverty is best relieved" by Australia's provision of foreign aid. Assuming that seeking "to generate debate about how poverty is best relieved" is within the fourth class of charitable objects, can it be said that the appellant was seeking to "generate debate" on that subject? No. The appellant advanced points of view, but it was not generating debate in the sense of stimulating others to contribute competing points of view so that some higher synthesis or more acute understanding of issues might emerge. The appellant was not playing the role of a teacher in charge of a skilfully conducted seminar, or someone deftly presiding over a meeting. The appellant's activities were designed to ensure that the appellant's points of view about aid prevailed by ensuring that government did some things and did not do others. The appellant wanted concrete results in relation to aid - results for the environment, for local communities involved, for the rights of indigenous people and women, for the accountability and transparency of government programs, for improving staff skills, for increasing educational funding and raising public awareness about Australian aid. Those who ran the appellant did not see themselves as philosophers merely talking about the world, or encouraging others to talk about the world: they saw their task as being to change the world. That was the whole point of creating an "activist and solidarity organisation". Members of debating societies or other participants in debate do not need to be activist and do not need to show solidarity, but those who want practical changes do. To be "activist" is to advocate energetic action. A "solidarity organisation" is one which is perfectly united in a community of interests, feelings or purposes. An "activist and solidarity organisation" is one which is perfectly united in a community of interests, feeling or purposes in relation to an energetic course of action. It seeks the carrying out of deeds, not the mere uttering of words. No doubt quite a number of people and organisations who learned of the appellant's points of view might, if they thought it worthwhile, seek to controvert them. The appellant might in that sense generate debate. But it did not seek that outcome. The appellant's views were not put in a manner inviting a response, but in a manner seeking compliance. It did not want dialogue, nor even too long a monologue. The appellant wanted its views to be implemented, not debated. It wanted obedience, not conversation.
2. The appellant pointed to two pieces of evidence which it said were to the contrary. One was a reference in one of the appellant's publications to the need for a debate about Australian aid. The other arose out of the cross-examination of Dr Goodman. He was taken to a report of the appellant which said: "We seek to push the Australian Government and multilateral institutions to promote a holistic approach." The cross-examiner asked whether "seeking to push" was synonymous with "seeking to persuade". In dealing with the group of questions that followed, Dr Goodman said that the appellant was:

"committed to ensuring that aid - seeking to ensure that aid practices are most effective in alleviating poverty, addressing sustainable development and we seek to push that most certainly and this is simply another way of framing that as a holistic approach to enable local indigenous communities to start charting their own development. It's an aspect of a broader set of requirements that are widely acknowledged as being necessary [to] achieve effective aid delivery. So I don't think it's a matter of persuading so much as presenting the arguments. We're not specifically seeking to persuade anybody there, we're seeking to push the Australian Government to promote a holistic approach. So we're not necessarily trying to win them over. We're seeking to ensure that they do in fact promote the holistic approach that they say they're committed to." (emphasis added)

The appellant relied on the reference to "presenting the arguments". When those two pieces of evidence are considered in the light of the other evidence taken as a whole, they do not support the proposition that the appellant was simply concerned with generating debate or presenting arguments for their own sake. That characterisation is inconsistent with the appellant's "campaigning" and its "targeting". It is inconsistent with its desire to "expose" evils, its tendency to "demand", to oppose, to criticise, to protest, and to be "activist". Above all, it is inconsistent with its concern for results, to be achieved with whatever amount of rancour and asperity was needed.

Relief of poverty

1. The appellant did not have the goal of relieving poverty. It provided no funds, goods or services to the poor. It did not raise funds to be distributed to the poor by others. The purposes of the appellant embraced aid to the poor, but they also embraced aid to many other sections of society as well. The goal of ensuring that there was local community involvement in the planning and implementation of aid projects was not targeted at the poor. Nor was the goal of ensuring that aid was delivered in an environmentally effective manner. Nor were the goals of respecting indigenous people and their expertise, ensuring "accountability and transparency" in relation to Australian aid programs, and increasing recognition of women's needs and involvement of women in development projects.
2. The Tribunal was correct to find that the relief of poverty had "no particular emphasis in [the appellant's] formal objectives". The Tribunal contradicted itself when it said that "[v]irtually every purpose or activity of [the appellant] is directed towards promoting the relief of poverty." The Tribunal was not correct to find that implicitly the relief of poverty was a "major objective" of the appellant. It was an objective, but diluted and diffused by many other objectives, and actually contradicted by some. The purpose of providing aid to improve infrastructure might relieve poverty, but the appellant opposed infrastructure which damaged the environment. One of its goals was to "demand" a complete phase out of support for extractive industries: these industries often damage the environment, but they also often bring wealth to many who would otherwise be poor. Similarly, the connection between opposing the Free Trade Agreement between Australia and the United States of America and relieving poverty was obscure.

Educational purposes

1. Only the eleventh of the objectives stated in the appellant's constitution related to education. Thus education is not a main or even a substantial purpose of the appellant. And the appellant's activities did not involve any systematic method or procedure for the inculcation of knowledge, the cultivation of mental or physical powers or the development of character[78]. The Full Court correctly said that characteristics of those kinds did not exhaust the category of education. It relied on the appellant's "major publications" as being research. It suggested that that research improved "the sum of communicable knowledge", in the words of Wilberforce J in In re Hopkins' Will Trusts[79]. However, the function of the appellant is not educative, but polemical. The appellant has a particular point of view, or a series of particular points of view. Those points of view are sometimes worked out, for example, in what Dr Goodman called "major, in-depth, on the ground, researched reports". But the points of view are pressed as part of a "campaign"; the appellant engaged in the "targeting" of various government policies and seeks to "argue for" others. The appellant has attacked various government policies as involving "perversity" or "hypocrisy". The appellant's publications take a polemical stand in relation to climate change issues: its stand may be virtuous, it may even be right, but it is not educational. As noted earlier, the Tribunal found that the "whole object of [the appellant] is to influence public opinion by making the results of its research available, with the further goals of influencing public opinion and ultimately government agencies and government itself" (emphasis added). Influencing public opinion is not by itself educational, even if information has been collected for the purpose of attempting to achieve that influence. To adopt the words of Hammond J in another context, the conduct of the appellant represents "an attempt to persuade people into a particular frame of mind. There is no instruction directed; nor is there to be any systematic accumulation of knowledge."[80]

Conclusion

1. The first question in this appeal must be answered in the negative. The second therefore does not arise, and it is better not to say, one way or the other, anything about the issues - complex and to some degree obscure - which cluster around it.
2. The appeal should be dismissed.
3. KIEFEL J. The question on this appeal is whether the appellant, Aid/Watch Incorporated, is a charitable institution within the meaning of s 50-5, item 1.1 of the Income Tax Assessment Act 1997 (Cth) and the corresponding provisions of the Fringe Benefits Tax Assessment Act 1986 (Cth) and the A New Tax System (Goods and Services Tax) Act 1999 (Cth). As is explained in the reasons of the majority, that meaning is informed by the principles relating to charitable trusts established under the general law.
4. It may be accepted that what is regarded as charitable may develop or change, according to the needs of society[81]. What the different conceptions of charitable purposes, under the general law, have in common is that they all contain the provision of a benefit to the public.
5. Whether an organisation has charitable purposes is determined by reference to the natural and probable consequences of its activities, as well as its stated purposes[82]. In examining those purposes and their purported effectuation in the activities of the organisation, attention is directed to the main or predominant purposes, rather than those which are ancillary or incidental[83].
6. It could scarcely be denied, these days, that it may be necessary for organisations, whose purposes are directed to the relief of poverty or the advancement of education[84], to agitate for change in the policies of government or in legislation in order to best advance their charitable purposes. No-one would suggest that charitable and political purposes are mutually exclusive. A charitable institution may have charitable and political purposes, provided that the political purpose is not the main or predominant purpose of the organisation. Here, the appellant's main purposes are to agitate for change in the programmes and policies of the Government or its agencies, by putting forward the views of its members.
7. I agree that there is no reason, in principle, that the political nature of an organisation's main purpose should mean its outright disqualification from charitable status. In each case it is necessary to consider the stated purposes and the activities of the organisation, in order to determine whether the main purpose is for the public benefit, the feature common to all classes referred to in Commissioners for Special Purposes of Income Tax v Pemsel[85]. However, reaching a conclusion of public benefit may be difficult where the activities of an organisation largely involve the assertion of its views, as is here the case. It might have been otherwise were those activities, and the stated purposes, capable of being characterised as for the advancement of education, or as having some other evident benefit to society. A mere connection between those activities and the charitable purposes of others, to render aid, will not suffice as a public benefit.

"AID/WATCH monitors, researches, campaigns and undertakes activities on the environmental impact of Australian and multinational aid and investment programs, projects and policies."

The "main objectives" which are then listed, at some length, may be shortly summarised. The Administrative Appeals Tribunal ("the Tribunal") observed[91] that two main threads run through them:

"The first is to ensure local community involvement in the planning and implementation of aid projects. The second is to ensure that aid is delivered in an environmentally effective manner."

I would reverse the order of these threads, having regard to the significance given to environmental concerns in the preamble to the objectives, although the two strands are interrelated. Nothing turns upon this. In addition, the appellant's objectives are said to be to ensure "accountability and transparency" in Australian aid and export credit programmes.

1. The objectives do not explain what is involved in their pursuit and it is therefore necessary to examine how the appellant operates, in order to ascertain what is really involved. Such an examination is necessary, in any event, to the determination of whether its main purpose is charitable, as earlier discussed.

2. The appellant's processes were explained in evidence before the Tribunal. Consistent with the preamble to its objectives, it was said that the appellant begins with monitoring and then moves to research. The research is used to campaign, and to influence practices relating to the delivery of aid. Essentially, therefore, the appellant is concerned to effect changes in the practices of aid agencies. This was confirmed by evidence that the appellant has sought to persuade the Australian Agency for International Development (AusAID) to alter the way it administers aid programmes. It has advocated the abolition of an Australian export credit agency. It targets the policies and practices of intergovernmental institutions, the Australian Government and its allies. The Chairperson of the appellant denied that it was involved in lobbying government or directly influencing it. It gave, by way of example of its methods, its response, in 2006, to a White Paper on the Australian aid programme put out by the Government for comment. All of this confirms that the appellant's activities and purposes are to put forward its views as to changes it or its members consider are necessary to existing aid programmes.

3. The Tribunal considered that the purposes of the appellant included the relief of poverty, since "[a]id itself is at the heart of charity."[92] However, whilst the purposes and activities of the appellant may have a connection with aid, they can neither be seen to promote nor to advance it, in any practical way.

4. It may be accepted that an organisation established to further an accepted public purpose, carried on by another, is itself charitable. Its purpose may come within the fourth class[93]. The effectiveness of a charitable organisation may be promoted by another, by the provision of support and services, for example. The activities of the appellant are not of this kind.

5. The appellant may well consider that the changes which it seeks, from time to time, would render aid more effective, but whether that is so depends upon the correctness of its views. At some points in its reasoning, the Tribunal appears to have assumed that the appellant's views concerning the delivery of aid have been, or would be, effective. Reference was made by the Tribunal[94] to the appellant influencing the Government "to deliver more effective aid", "improve the quality of … aid", "increase or redirect … aid" and "promot[e] the most advantageous delivery of aid". But that is to assume, without more, that its views will necessarily promote the delivery of aid. Such a result cannot be said to follow from the assertion of its views. Its motives are not sufficient to establish public benefit.