Tax reforms branded ‘vicious, short-sighted’

Press, 28 December 1987, Page 2

Tax reforms branded ‘vicious, short-sighted’

Taxation reforms were a “vicious, short-sighted attack” on the voluntary health and welfare sector, said the director of the Mental Health Foundation, Dr Max Abbott. Some voluntary organisations would collapse because of the tax reforms and others would have to markedly cut the range of services they provided to the community, he said. “The abolition of tax exempt status for donations to charitable bodies will lead to a drastic and immediate drop in their incomes. “Without this tax incentive, individual and business house donors will reduce their financial support to voluntary organisations.” Other proposals in the taxation "white paper”

would “put the remaining nails in the coffin of the voluntary sector,” said Dr Abbott. The Government proposals would result in a 25 to 40 per cent drop in the Mental Health Foundation’s income, he said. “This, on top of inflation, hikes in State corporation charges and increased GST, could mean an annual deficit of $300,000 instead of the present $lOO,OOO. “Other organisations will be in the same boat. Putting it bluntly, the Government plans to rip the guts out of the voluntary sector.” Dr Abbott said that the White Paper claimed that assistance to charitable organisations could be more effectively delivered through “direct ex-

penditure programmes.” “Presumably this means Government grants. However, we were promised similar compensation when P.E.P. and V.O.T.P. schemes were phased out in 1986. “We saw nothing of the $lOO,OOO per annum that we lost and would have to remain sceptical of similar promises.” The Government’s claim that direct grants were a superior method of supporting the voluntary sector was “insidious arrogance,” said Dr Abbott. “Voluntary health and welfare groups have developed precisely because Government agencies failed to meet pressing social and personal needs. “Plunket and Marriage Guidance provide early examples. In more recent

times, unemployment support groups, Rape Crisis Centres, Incest Survivors, New Mother Support Groups, Parent Help, the Child Abuse Prevention Society, the Mental Health Foundation, Women’s Refuges, the Schizophrenia Fellowship, and Men Against Violence have responded to previously unrecognised and unmet needs.” Under the proposed changes, the Government Ministers and civil servants would have the power to stifle any unwanted criticism from voluntary sector groups by withholding or withdrawing funding, said Dr Abbott. “This is a threat to our democratic traditions. It is a draconian measure. It must be exposed and aborted.”