Public Benevolent Institutions for Native Title Groups: An Underappreciated Model?
| Date | 01 September 2015 |
| Author | Ian Murray |
| Published date | 01 September 2015 |
| DOI | 10.22145/flr.43.3.4 |
| Subject Matter | Article |
GROUPS: AN UNDERAPPRECIATED MODEL?
Ian Murray*
ABSTRACT
There has been limited research into the relevance of public benevolent institutions
(‘PBI’s) to the management of native title benefits. Despite this omission, a new, tax-
effective, structure was proposed in 2013, being the ‘Indigenous Community
Development Corporation’ (‘ICDC’). PBI characterisation is also becoming more
relevant as native title determination numbers increase, such that there is a suitable and
interested body, the prescribed body corporate (‘PBC’) that can pursue a variety of
functions in fulfilling its statutory duties and in seeking to realise the economic, social
and cultural objectives of Indigenous groups. This article asserts that a purpose of
addressing Indigenous disadvantage is a PBI purpose and that it permits a broad range
of activities in order to meet that end. Accordingly, PBI status should be available for
many PBCs and other benefits management structure institutions. As a result, the
proposed grounds for introducing the ICDC are significantly less compelling and it is
argued that a more cautious approach is warranted, being one that better recognises
ICDC limitations and that does not over-emphasise the potential benefits.
I INTRODUCTION
Agreement making between native title groups and resource proponents, along with the
treatment of related payment streams, has gradually been gathering further attention
from academics, government policy makers and practitioners over the last decade.1 In
* Assistant Professor and member of the Centre for Mining, Energy and Natural Resources
Law, University of Western Australia and Consultant, Ashurst Australia. The author thanks
an anonymous reviewer and Jared Clements for their considered comments on an earlier
version of this paper. This article builds on an earlier presentation to the Tax Institute of
Australia (WA Division).
1 See, eg, Marcia Langton et al, Agreements, Treaties and Negotiated Settlements Project (19
February
2015)
Ciaran
O’Faircheallaigh,
‘Registered Native Title Bodies Corporate and Mining Agreements: Capacities and
Structures’ in Toni Bauman, Lisa M Strelein and Jessica K Weir (eds), Living with Native
Title: The Experiences of Registered Native Title Corporations (AIATSIS Research
Publications, 2013) 275; Treasury (Cth), ’Native Title, Indigenous Economic Development
and Tax‘ (Consultation Paper, October 2010); Jenny Macklin and Robert McClelland,
‘Leading Practice Agreements: Maximising Outcomes from Native Title Benefits’ (Discussion
Paper, Department for Families, Housing, Community Services and Indigenous Affairs and
424
Federal Law Review
Volume 43
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particular, there has been a recent focus on the structures and institutions that receive
and manage native title benefits, with growing awareness of the importance of robust
institutions to economic efficiency and social outcomes.2 Indeed, this is consistent with
the inter-governmental Closing the Gap objectives agreed under the National Indigenous
Reform Agreement.3
This article focuses on the role of public benevolent institutions (‘PBIs’) in such
‘benefits management structures’. Benefits management structures may often involve
one or more trusts or incorporated bodies,4 with a mix of entities more likely to be
adopted when larger payments are received.5 Typically, it is contemplated that an
incorporated body (the ‘Local Aboriginal Corporation’) will act as the main protagonist
to implement trust projects.6 It is not uncommon for the Local Aboriginal Corporation
to be registered as a PBI, although as discussed in Part IIIF, there seems scope for broader
access to PBI status. Sometimes the Local Aboriginal Corporation will also be a
prescribed body corporate (‘PBC’), that is an incorporated body appointed under the
Native Title Act 1993 (Cth) (‘Native Title Act’) to hold the determined native title rights
and interests on trust or as agent for the native title holders.7 Being a PBI brings various
tax concessions that are additional to those attending charity status.
Little has been written on the relevance of PBI status to benefits management
structure institutions. However, the significance of PBIs to the receipt and management
of native title benefits is currently being enhanced by three factors. First, the recent case
of Commissioner of Taxation v Hunger Project Australia (‘Hunger Project’)8 has broadened
the ambit of the PBI concept in a way that may permit greater coverage of benefits
management structure institutions. Second, as noted by O’Faircheallaigh, the number of
native title determinations is increasing, such that PBCs are becoming more common
and are playing a greater role in native title agreement making and in realising the
Attorney-General’s Department, July 2010). Jon Altman has had a very long interest in the
area. See, eg, Jon C Altman, Aborigines and Mining Royalties in the Northern Territory
(Australian Institute of Aboriginal Studies, 1983).
2 See, eg, Ciaran O’Faircheallaigh, ‘Use and Management of Revenues from Indigenous-
Mining Company Agreements: Theoretical Perspectives’ (Agreements, Treaties and
Negotiated Settlements Project: Working Paper Series No 1/2011, June 2011); Rob Heferen et
al, ‘Taxation of Native Title and Traditional Owner Benefits and Governance Working
Group’ (Report to Government, 1 July 2013); Robert Levitus, ‘Aboriginal Organisations and
Development: The Structural Context’ in Jon Altman and David Martin (eds), Power, Culture,
Economy: Indigenous Australians and Mining (Australian National University E Press, 2009) 73.
3 Council of Australian Governments, National Indigenous Reform Agreement (Closing the Gap)
(revised February 2011)
4 Rob Heferen et al, above n 2, 14.
5 Ibid. See also Minerals Council of Australia and National Native Title Council, Submission to
Treasury (Cth), Native Title, Indigenous Economic Development and Tax, 30 November 2010, 16–17.
6 See generally Yamatji Marlpa Aboriginal Corporation, ‘Pilbara Native Title Groups Reach
Agreement with Rio Tinto’ (Media Release, 3 June 2011); Adam Levin, ‘Observations on the
Development of Native Title Trusts in Australia’ (Paper presented at the STEP Australasia
Conference, Sydney, 28–30 May 2014) 8–9, 15–16.
7 Native Title Act pt 2 div 6. As to the use of PBCs in benefits management structures, see, eg,
Andrew Morgan, ‘Native Title Trusts’ (Paper presented at the Legalwise Native Title
Conference, Perth, 13 June 2014) 7–10.
8 (2014) 221 FCR 302.
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Public Benevolent Institutions for Native Title Groups
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economic, social and cultural objectives of Indigenous peoples.9 This includes the potential
to obtain PBI status. Third, an alternative tax concession category of entity was proposed
for Indigenous groups in 2013, the ‘Indigenous Community Development Corporation’
(‘ICDC’).10 However, the precise nature of the proposal has never been fully articulated
and it was made without a proper appreciation of the scope of the PBI concession.
This article investigates the applicability of PBI status for the range of activities that
many Indigenous groups aspire to undertake under benefits management structures
and more broadly through PBCs. In doing so, it seeks to highlight the scope for PBI tax
concessions to support economic, cultural and social development. Further, by
identifying the potentially broad coverage of Indigenous group objects and activities
under the PBI category, the article critiques the bases for the proposed new ICDC.
II THE PBI CONCEPT IN CONTEXT
This Part outlines what a PBI is and the impact of the Hunger Project case. It then explains
the relevance of obtaining PBI status for Indigenous benefits management structures.
A What is a ‘Public Benevolent Institution’?
The legislation that employs the phrase ‘public benevolent institution’ typically does not
include any statutory definition and hence judicial decisions on the phrase’s ordinary
meaning are relevant, unless the particular context requires some variation. The Full
Federal Court in Hunger Project recently ventured to provide a broad and non-
exhaustive definition, stating that the term ‘includes … an institution which is organised,
or conducted for, or promotes the relief of poverty or distress’ and that ‘conducts itself
in a public way towards those in need of benevolence, however that exercise of
benevolence may be manifested’.11 In doing so, the Court highlighted that there is ‘no
single or irrefutable test or definition’ and that as ‘PBI’ bears its ordinary meaning, that
meaning can change over time.12
This approach is consistent with previous authorities, which focus on the meaning of
the whole phrase, rather than on a catalogue of elements.13 It is also based on and
consistent with the leading PBI decisions of Perpetual Trustee Co v Federal Commissioner of
Taxation (‘Royal Naval House Case’)14 and Australian Council of Social Service Inc v
Commissioner of Pay-roll Tax (NSW).15 Nevertheless, it is helpful to identify the elements
that comprise the phrase, in order to better understand the overall meaning of the PBI
phrase.16 These are:
9 O’Faircheallaigh, ‘Registered
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