Australia: 'Extraordinarily high': Two postcodes stand out for charitable giving - - PressFrom - Australia

Australia 'Extraordinarily high': Two postcodes stand out for charitable giving

21:51  19 october  2019
21:51  19 october  2019 Source:

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a close up of a hand: Australia  has been ranked among the world's most generous nations.© AFR Australia has been ranked among the world's most generous nations.

Australia has just been named one of the world’s most generous nations. The World Giving Index released on Tuesday by the UK-based Charities Aid Fund ranked Australia fourth behind the US, Myanmar and New Zealand.

The special report drew on a decade’s worth of surveys that asked people across 128 countries if they had helped a stranger, given money or volunteered for a good cause during the previous month.

Australia performed especially well for its share of financial donors. Over the decade an average of 68 per cent of Australians reported making a donation to a charity or non-profit organisation during the previous month, the 8th highest share among the nations surveyed (Australia ranked 11th for helping a stranger and 12th for volunteering).

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But we shouldn’t be too complacent. Australia is less open-handed on some other measures.

Each year Queensland University of Technology’s Australian Centre for Philanthropy and Non-Profit Studies conducts a revealing appraisal of Australia's generosity.

It uses Tax Office figures to evaluate the deductions individual taxpayers claim for charitable donations. The analysis doesn't cover every contribution made to a good cause – giving by corporates and trusts along with non-deductible donations, such as raffle tickets, sponsorships and volunteering are not covered.

Even so, it is provides unique insights on the nation’s giving.

While the Charities Aid Fund research highlighted Australia’s relatively high proportion of charitable donors, the analysis of tax return data reveals the amount of income we give away is much less impressive.

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The latest figures – for 2016-17 – show individual taxpayers who made tax-deductible donations gave away an average of just 0.42 per cent of their taxable incomes, up from 0.35 per cent the year before.

While tax-deductible donations made by Australians that year reached a record $3.5 billion, the proportion of donors has been declining.

Fewer than a third of tax payers made a tax-deductible gift in 2016-17, the lowest share in 15 years.

The overall number of donating taxpayers in Australia actually fell by more than 400,000 between 2011 and 2017.

Australia’s charity and not-for-profit sectors rely heavily on the ultra-rich.

The QUT report shows an elite group of 6,746 Australians with taxable incomes of more than $1 million made nearly a fifth of all tax-deductible donations in 2016-17 (although a surprising 44 per cent of those with a taxable income over $1 million claimed no tax deductible donations at all – a similar share to previous years).

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A few suburbs and towns registered an extraordinarily high average tax-deductible donation in 2016-17, the QUT analysis found. For instance, the Perth neighbourhood of Cottesloe-Peppermint Grove (postcode 6011) had an average gift per taxpayer of $96,111 while in the central Victorian town of Mansfield (postcode 3724) the figure was a handy $92,301.

These unusually high postcode-level averages were apparently skewed by huge tax-deductible gifts made by a small number of wealthy individuals.

The average tax deductible gift in both those neighbourhoods was about 120 times the national average donation of $769.99.

But the nationwide picture was more subdued. The median donation (that is the middle value when all tax deductible donations were aligned in numerical order) was $110 in 2016-17, unchanged from the previous year.

It's likely the long period of weak wages growth in Australia has taken a toll on the capacity of middle and lower income earners to increase the amount they give to charity.

“Our analysis reveals that Australia’s giving is a mixed bag,” the QUT report concluded.

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The Charities Aid Fund report on international giving says there’s been a “downward trend in giving behaviour” in wealthy countries in the aftermath of the global financial crisis.

While Australia’s overall score on the World Giving Index has been fairly consistent over the past decade it has declined a little since 2016.

There’s something else that undermines Australia’s reputation as generous nation: the Morrison government’s foreign aid budget.

Australia has never been an especially generous aid donor. But during the past decade our foreign aid spending has shifted from modest to miserly.

The federal budget in April cut foreign aid for the sixth year in a row. It is now 27 per cent below the peak in 2013-14, in real terms.

For every $100 Australia earns as a nation it gives just 21 cents in official foreign aid – the least generous share on record. On current trends that share will dwindle to 17 cents for every $100 of national income by the end of next decade.

Australia has tumbled down the league table of foreign aid donors as a result.

Back in 1995 Australia was ranked 9th for the share of national income we committed to overseas aid. But the latest comparison shows Australia had slumped to 19th out of 29 donor countries, and could soon drop even lower.

It’s hard to argue Australia is one of the world's most generous nations when it has such a stingy record on foreign aid.

Matt Wade is a senior economics writer.

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