The Assistant Treasurer, Chris Bowen MP, today released a discussion paper to provide a point of reference for public submissions on the Government’s 2008 Budget commitment to improve the integrity of prescribed private funds (PPFs).
The Treasurer announced in the Budget that the Government will legislate guidelines to improve the integrity of PPFs and to provide the trustees of PPFs with greater certainty as to their philanthropic obligations. This measure is to have effect from 1 July 2009.
The discussion paper outlines the Government’s views on the essential characteristics of a PPF and outlines a proposal for several changes to the current guidelines and regulatory system.
PPFs are a form of ancillary trust fund designed to encourage private philanthropy by providing private groups, such as businesses, families and individuals, with greater flexibility to start their own trust funds for philanthropic purposes. Donors receive a tax deduction for donations to their PPF, and most PPFs are also income tax exempt.
PPFs are limited to distributing their wealth to a group of organisations known as deductible gift recipients. Most deductible gift recipients are charities, some of which work directly with the community to address issues of social inclusion.
Since their inception PPFs have received donations of over $1.3 billion, and made distributions of over $300 million.
The Assistant Treasurer encourages interested parties to provide their comments on the paper by 14 January 2009.
The discussion paper is available on the Treasury website www.treasury.gov.au.