Providers of ethics classes in government schools will become eligible for deductible gift recipient (DGR) status, said Assistant Treasurer David Bradbury.
Currently, the tax laws contain DGR general categories for organisations which provide religious instruction in government schools, but there is no category for providers of ethics classes.
If providers of ethics classes want DGR status, an organisation must make a request to be specifically named in the tax laws, which requires an amendment to be passed by the Parliament in the case of each organisation. This is a time-consuming and uncertain process.
"Ethics classes provide parents with more choice about educational options for their children," said Mr Bradbury.
"The Gillard Government wants to support ethics classes in government schools through the provision of the DGR tax concession, but making individual organisations jump through hoops to be specifically named in the tax laws is not the right approach.
"The Government will amend the tax laws to expand the DGR categories to include organisations approved by state or territory governments to provide ethics classes in public schools as an alternative to special religious education classes.
"Expanding the DGR categories administered by the Australian Taxation Office to providers of ethics classes is a better and more principled way of providing DGR status to such organisations."
New South Wales already allows the teaching of ethics classes in government schools as an alternative to special religious education classes and providing DGR status to organisations delivering these ethics classes will help them generate the funds they need to continue operating, by allowing donors to claim a tax deduction for donations to these organisations.
The amendment will be progressed in the upcoming Winter sitting of Parliament.