Environment groups have welcomed the Turnbull government's retreat from plans to curb environmental advocacy but concerns remain about other proposals to restrict the charity sector.
Kelly O'Dwyer, Minister for Revenue and Financial Services, announced the government would drop its intention to require environmental charities spend at least 50 per cent of donation income on "environmental remediation work" to retain their tax-deductible status.
"The government will not mandate a level of remediation by environmental organisations," Ms O'Dwyer said.
The push for a required level of environmental work lost traction after BHP indicated it would oppose such curbs.
The Australian Conservation Foundation welcomed the backdown of the government's "anti-democratic proposal" to curb environmental advocacy.
"Advocacy makes Australia a better place," Kelly O'Shanassy, ACF's chief executive, said. "It has kept oil rigs off the Great Barrier Reef, and given us Landcare, clean energy, air and water, and a Franklin River that flows."
"It is interesting this backdown follows a statement by BHP opposing the changes, and even a retreat by the Minerals Council in recent weeks," she said.
The Minerals Council of Australia had sought as much as a 90 per cent requirement for remediation efforts, with only 10 per cent for advocacy for green groups to retain their tax-deductibility status.
Other worries emerge
But other moves by the Turnbull government are fanning uncertainty, including plans released on Tuesday to ban foreign donations to advocacy groups.
Samantha Hepburn, a law professor at Deakin University, said financial reporting requirements under the Annual Information Statement (AIS) collected by the Australian Charities and Not-for-profits Commission could pose other challenges for environmental groups.
Where an environmental group provided an AIS that revealed strong expenditure on political advocacy rather than remediation, it might be investigated by the Australian Taxation Office. The proposed changes increased funding for the ACNC and the ATO to review more groups for their ongoing eligibility for tax benefits, she said.
"This creates uncertainty for environmental organisations," Professor Hepburn said. "It is unclear whether their public interest imperatives in pursuing political advocacy for such issues, such as climate change and matters of national environmental significance, will actually result in their ongoing eligibility being put at risk."
"Charities are already highly regulated and scrutinised, much more so than other groups in public life such as industry lobbies," Ms O'Shanassy said. "Any reforms should not put undue burdens on charities that would force them to use their limited resources on unnecessary red tape."
While the Wilderness Society also welcomed the retreat from an advocacy cap, its national director, Lyndon Schneiders, said any government attempt to taint groups by the actions of individuals "would be unenforceable and breach privacy provisions".
Greens' senator Rachel Siewert said the Turnbull government's backdown was "massive".
"It's surely no coincidence that it comes hot on the heels of the Minerals Council's backflip on the same issue," Senator Siewert said.
"While the government might not be forcing environmental organisations to plant trees, it is still determined to silence dissent, whether that's through its proposed ban on international philanthropy or its threats of excessive auditing."
A spokesman for the Minerals Council of Australia, though, said it had never supported a mandated level of spending on environmental remediation.
"The MCA welcomes improved standards of transparency and compliance for all entities that receive special tax concessions, which follow numerous breaches of the law by some deductible gift recipient organisations," he said.
"These improved standards will support public confidence in the not-for-profit sector."