Letters to the Editor

Jamie Clarke,

Benalla.

Revenue raising

A local not-for-profit community organisation run by volunteers was recently advised by that they needed to update their constitution and standing orders to comply with the current Federal taxation regulations. The organisation is an 'Incorporated Association' under state regulations. It now appears that even though the community group is compliant with the state regulations, the constitution now needs to conform to Federal taxation regulations. Fortunately, the community group was provided with a template to amend their regulations and then lodge these changes along with a fee of $437 with Consumer Affairs Victoria. I am aware that one community group in the Goulburn Valley did not have such a template and engaged a legal specialist at a cost of around $1200.

Now this $437 may seem a small amount, however it was unbudgeted in the local community group, which does not operate at a profit or raise funds, the organisation is totally self funded and, given the current financial situation with its 'mature aged' members, the annual membership fee is kept to an absolute minimum.

When you look at the bigger picture, the impact of this apparently minor update is significant. There are believed to be more than 40,000 incorporated not-for-profit community groups within Victoria, and given that almost all will need to undertake the update to comply, there will be almost $18 million transferred from the funds of community not-for-profit groups, to the account of a Victorian Government department. Not a bad little income for the Victorian Government, created by some minor changes in the regulations of a Federal Government department. Many State incorporated not-for-profit community groups have not yet been formally advised by the ATO that they are now potentially liable for taxation on any revenue raised over $417.

Barry O'Connor,

Benalla.