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In a breakthrough for Senator Nick Xenophon’s campaign against Scientology, an Australian senate committee has backed his call for closer monitoring of groups that enjoy tax-exempt status.

An Australian senate committee has endorsed Senator Nick Xenophon’s call for a charity commission to monitor charities and religious groups that enjoy tax-exempt status – a keystone of his campaign against Scientology.

The Senate’s economics committee called for the new body to apply a public benefit test, like the one already used in Britain and New Zealand, to ensure that groups deserve their tax-exempt status.

Xenophon had already proposed this in a private members bill. [1]

But the report said: “The Committee views the bill … as too narrow to respond to the broad range of issues identified by the Committee.”

It therefore went beyond the tax issues covered in its inquiry and called for a review of cult-like organisations and their effect on individuals and society.

It noted in particular the work of the French government’s cult watchdog Miviludes. [2]

A statement from Senator Xenophon’s office welcomed the committee’s report.

“This is a win for all taxpayers who have unknowingly been supporting organisations with no proof that they deserve charitable status,” he said. “More importantly, this is a huge win for people whose lives have been significantly damaged by the actions of certain organisations who have been enjoying tax exemption under the label of 'charity' or 'religion', but whose behaviours have been far from charitable,” he added.

He called for the Committee's recommendations to be implemented as soon as possible.

“… time for action”

The committee was clearly impressed with the testimony of some former Scientologists who did not think the movement deserved tax-exempt status, quoting some of them at length in the report. [3]

The report quoted what former member James Anderson told the committee on this point:

One should be able to clearly identify groups who do good works, because they see the results. If one cannot see those results, that particular group should be deemed to be highly suspect and should be treated as such. I guarantee if you asked the same taxpayer what good works Scientology do and what they are known for, they would actually struggle to give you an answer. I know I do. That was one of the things I found very difficult to reconcile in my association with Scientology over 25 years. I in fact found them to be quite self-serving and not really directed at the external environment.

The committee quoted another former member, Carmel Underwood, whose letter to Senator Xenophon helped persuade him to launch his campaign.

… as a former Scientologist I believe that the Church of Scientology is a prime example of why this tax amendment is required. As I outlined in detail in the attachment to my submission, the Church of Scientology is a tax-exempt organisation which, one, enjoys tax-exempt status while it only serves itself at the detriment of others. It does not even serve its members. Its members actually serve it. Two, it is fraudulent. It deceives and heavily coerces its people in order to obtain so-called donations. It often does not deliver what is promised, and in some cases it uses those funds for purposes other than what is stated. This is fraud and it is a crime. Three, it is an organisation which threatens its people with ‘pay up or else’. This is extortion.

And perhaps most shocking of all, it quoted former member Janette Vonthenthoff:

The experiences include bullying and harassment; two coerced abortions; Scientology justice procedures, including court hearings resulting in removal of freedoms; forced financial donations; severe financial stress; working a minimum of 40 hours and up to 70 hours a week  for no pay; removal of my Australian passport while studying for Scientology in the US, so I was unable to leave; working under duress all night on many occasions while my young children were forced to stay at the office and sleep on the lounge; threats of loss of my family if I tried to leave; psychological abuse; being forced to sign a suicide waiver, freeing  Scientology of all responsibility if I caused myself any harm, when I made it clear how much I wanted to leave; and interrogation regarding my personal life and sex life.

The summary of the report made it clear that time for talk was over.

“The Committee agrees with the view expressed to it that there comes a time when a government has to make a decision either to do something or to stop saying that it is going to do something, because the matter has been on the agenda for many years. “It is now time for action.”

The French connection

In its reference to France’s Miviludes, the committee said:

The Committee recommends that the Attorney-General's Department provide a report to the Committee on the operation of Miviludes and other law enforcement agencies overseas tasked with monitoring and controlling the unacceptable and/or illegal activities of cult-like organisations who use psychological pressure and breaches of general and industrial law to maintain control over individuals. The report should advise on the effectiveness of Miviludes and other similar organisations, given issues that need to be addressed to develop an international best practice approach for dealing with cult-like behaviour. [4]

This goes substantially further than the public benefit test around which Xenophon had based his private members’ bill.

That test drew on existing British legislation, which takes a more moderate approach in this area than France.

France’s Miviludes takes a far tougher line on the issue of the groups it is happy to call cults, reflecting the fiercely secular nature of French society.

France goes further than most countries in having legislation that allows for the banning of a cult if convicted of serious criminal activities – though the law has yet to be applied to a major movement.

There is no suggestion that Australia is preparing to go down that path.

It is nevertheless remarkable progress for Xenophon’s campaign, which started less than a year ago.

On November 17, the senator delivered a withering attack on Scientology, citing in detail from letters he had received from former members. [5]

His speech, in which he described the movement as a criminal organisation masquerading as a religion, called for a Senate inquiry into its tax-exempt status, something the previous government denied him.

His revised approach, focussing on a broader public test for all charities, has had greater success however.

Only today, Australia’s Labor Party confirmed its position as the new government, albeit without an overall majority, after winning the backing of two independent MPs.

The outgoing Labor administration under Kevin Rudd did not back Senator Xenophon’s original campaign.

What is significant about the economics committee’s recommendations however is that they have the support of both the main parties.

And last month the government indicated that it was ready to take a closer look at regulation of the “not-for-profit” sector.


With Labor's attitude having already shifted on this issue, it seems that much more likely that  the government will look favourably on the committee's recommendations.

More follows…