Allegations of politicising of the Australian Taxation Office have surfaced this morning in The SMH. It is alleged the charitable status of Aidwatch was revoked by the ATO because it has been “trying to procure changes in Australia’s aid and development programs” and for being involved in political activities.

“This is a direct attack on free speech and on democracy” said Aidwatch Chair James Goodman. “Aidwatch is the only independent watchdog of Australian aid. We have to raise these issues publicly or else no one will. Charities exist for public benefit. How can we benefit the public if we keep silent?”

Aidwatch Co-director Flint Duxfield said “It’s clear that the government is using the ATO to target charities such as Aidwatch who speak out in the public interest against misguided policy.”

“The ATO Ruling threatens our very existence and sends an ominous message to all charities– question Government policy and you will lose your charitable status,” said Mr. Goodman. Aidwatch has lodged an appeal with the Administrative Appeals Tribunal.

In its decision the ATO recognised that Aidwatch objectives, as stated in its constitution, were entirely charitable. They observed that these objectives were fulfilled by Aidwatch through a range of different research and education activities, including through the provision of advice to governments in Australia and overseas.

However, the ATO cited three activities of the organisation that it believed were not consistent with charitable status:

(i) urging the public to write to the Government to put pressure on the Burmese regime;

(ii) delivering an (ironic) 60th anniversary birthday cake to the World Bank;

(iii) raising concerns about the developmental impacts of the US-Australia Free Trade Agreement.

The ATO alleged the three activities sat outside the ATO definition of ‘incidental’ political activities for a charity, and removed its charitable status.

In my view this decision is a crook one and needs to be examined by the external authorities. My advice to Aidwatch, along with their appeal to the AAT, is to lodge complaints with the Commonwealth Taxation Ombudsman and the tax office watchdog David Vos, the Inspector-General of Taxation. Vos is a rottweiler and is not frightened to stand up for taxpayers against the might of the tax office or government. In fact I think he would love to get his big paws on this.

It is not the first time the ATO have been accused of being politicised. Crikey readers will recall the infamous Robert Gerard tax fiasco where the ATO sliced $75 million dollars off the big liberal party donor’s tax bill. He was also provided a comfort letter personally signed by the former tax commissioner Michael Carmody effectively clearing him of any tax foibles which facilitated his promotion to the Reserve Bank Board.

I think this government may have been in power too long.