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FORMER members of the Church of Scientology have told a Senate committee of the "ruthlessness" of the church and its judicial system, and argued it should not be eligible for tax-free status.

"Australian taxpayers should not be funding systematic, organised abuse," said Janette Vonthehoff, who claimed her passport was taken from her and she was forcibly prevented from returning to Australia from the United States when she was eight weeks pregnant, because the church ordered she must finish "training".

Sydney tax lawyer and social identity Louise McBride defended the church, and clashed with independent senator Nick Xenophon during the hearing.

Senator Xenophon accused Ms McBride of being "unprofessional" for suggesting the committee was "making a mockery of the law" by considering his private member's bill. The bill seeks a tax law amendment that would require religious and charitable organisations to meet a public benefit test.

Ms McBride - who said she was not a Scientologist and had never been to a Scientology church - told the committee: "You are singling out a group in a government bill as the purpose of the bill. [It] is discrimination. But for parliamentary privilege, it would amount to libel."

Ms Vonthehoff said she resigned from the church in 2007 because of bullying, two coerced abortions and Scientology justice proceedings that included its own court hearings.

Another former member, James Anderson, said he and his wife had paid up to $1.2 million in Scientology training fees.

Senator Xenophon said Scientology "auditing" sessions were regarded by some as a cross between personal counselling and Maoist self-criticism, and had been a factor in the UK Charities Commission deciding against granting Scientology tax-free status there.

The Church of Scientology's social reform director, Virginia Stewart, said the sessions made members "a better person", and the fee charged formed the basis of donations to the church.

When asked about members paying hundreds of thousands of dollars for training, Ms Stewart replied: "I don't think courses within the Church of Scientology come to those sums."

The bill would "put at risk the financial future of charities and religions in Australia", Ms Stewart said.

However, Senator Doug Cameron said there was nothing in the bill about religious freedom, and it was "a nonsense" to say it would be the death of Scientology.

Scientology New Zealand representative Mike Feriss said a charities commission in New Zealand - with a similar public benefit test - had not affected Scientology's operation and was "fair".

But Mr Feriss could not explain why the church's income fell from $2.6 million to $374,000 the year after the NZ commission required it to publish financial statements. His first reply, that it was due to the currency exchange rate, was laughed at by the committee.

When Senator Xenophon asked the church if it would be concerned if organisations involved in human rights abuses and systematic harm were given tax-free status, Ms McBride replied: "Yes," but said the same scrutiny should apply to the Catholic Church.

A lawyer for other charities, Andrew Lind, said he supported the establishment of a charities commission, but warned against creating a new law that applied to all charities in order to deal with one organisation.