Australia’s Tax Deductible Donations on the Rise
Tuesday, 3rd September 2013 at 10:52 am
The amount of money donated by Australians and claimed as a tax deduction is on the rise and the NSW postcode representing Darling Point is the most generous in the country, according to the latest analysis of Tax Office figures.
Australians donated about $2.21 billion to charity in 2010-11 according to an analysis of the tax return records by the Queensland University of Technology.
The analysis reveals an increase of $248 million (or 12.63 per cent) from 2009-10 when Australians claimed $1.96 billion in tax deductions for their charitable giving.
Each year, The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) at Queensland University of Technology (QUT) collects and analyses statistics on the amount and extent of tax-deductible donations made and claimed by Australians in their individual income tax returns to deductible gift recipients (DGRs).
The analysis says the average tax-deductible donation made and claimed by Australian taxpayers to DGRs in 2010-2011 was $461.47, which is an increase compared to $446.31 in 2009-10 and $450.05 in 2008-09.
“This average amount is two times that of a decade ago,” the analysis said.
In the latest analysis in NSW the postcode representing Manly and Manly East was replaced by Darling Point, Edgecliff, HMAS Rushcutters and Point Piper as the postcode with the highest total gifts claimed.
In Victoria, Hawksburn and Toorak was replaced by South Yarra as the postcode with the highest total gifts claimed.
In Queensland, last year’s number one postcode representing Corinda, Graceville, Graceville East, Oxley and Sherwood was replaced by Benowa, Bundall, Bundall BC, Chevron Island, Gold Coast MC, Isle of Capri, Main Beach and Surfers Paradise.
Lead researcher Myles McGregor-Lowndes says that in 2010-11 the Australian economy was continuing to benefit from the strong growth in Asia, with the terms of trade at their highest level on record at the time. The Australian dollar in trade-weighted terms was around its highest level since the mid-1970s.
“The total amount donated reached one billion in 2002-3 and took just eight years to double,” he said.
“The Australian household saving ratio continued to rise with households remaining cautious and retail spending subdued. However, household confidence fell and there has been little growth in household net worth over the 2010-2011 year.
“On average, those individual taxpayers who make tax-deductible donations to DGRs donate approximately 0.35 per cent of their taxable income. This represented a slight increase from the previous income year, in which the average percentage of taxable income donated was 0.34 per cent.”
NSW taxpayers made and claimed the largest average tax-deductible donation to DGRs of $556.44 compared to the national average of $461.47. Taxpayers from the Australian Capital Territory made the next highest average tax-deductible donation to DGRs with $537.50, followed by Victoria with an average tax deductible donation of $467.59. Queensland taxpayers made and claimed an average tax-deductible donation of $357.18 in 2009-10.
McGregor-Lowndes said concerns about public finances in both Europe and the United States have had a significant impact on financial markets over the last months of the 2010-11 financial year.
“The Queensland floods in late 2010 and early 2011 are considered to be the largest disaster event in that state’s history,” he said.
“Ex-tropical cyclone Oswald caused devastating destruction along the Queensland coast with damaging winds, heavy rain, flooding, tidal surges and tornados in January 2013.
“The Queensland Reconstruction Authority estimated that the cost of flooding events will be in excess of $5 billion.
“The Premier’s Appeal raised $277.2 million, including $11 million from the Queensland Government and $11 million from the Australian Government.
“There were also floods in Victoria and bushfires in Western Australia for which there were also public appeals.”
The analysis said during 2010-11 there were 56,279 tax concession charities, a 2.3 per cent increase and 29,046 active deductible gift recipients, a 3.4 per cent increase.
As at the end of 2010-11 income year there were 924 Private Ancillary Funds (PAFs) approved, 103 more than the previous year, representing a 5.11 per cent increase.
PAFs received $304 million in donations, representing a 5.19 per cent decrease compared to the $321 million donated in 2009-10.
The closing value of PAFs in 2010-11 was $2.12 billion, which represents a decrease from the closing value of $2.27 billion in 2009-10.
Distributions in 2010-11 reached $165 million a decrease of $32 million or 16.24 per cent. There were significant falls in distributions to health, education, research and welfare recipients.
As well workplace giving programs which allow employees to have deductions taken from each pay totalled $33 million, an increase of 43.5 per cent over the previous year. More than 50,000 new employees joined the scheme during the year the analysis found.
Download the full paper: http://eprints.qut.edu.au/61719/
McGregor-Lowndes, Myles & Pelling, Emma (2013) An examination of tax-deductible donations made by individual Australian taxpayers in 2010-11. [Working Paper]
The General Executive Summary: http://eprints.qut.edu.au/61722/
The Summary in relation to Private Ancillary Funds (PAF): http://eprints.qut.edu.au/61373/
The postcode and occupation web tools to drill down to gifts in individual postcodes and occupations are available here: http://www.qut.edu.au/business/about/research-centres/australian-centre-for-philanthropy-and-nonprofit-studies/publications-and-resources/giving-by-postcode