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Charities Bill 2007
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05-12-2008 6:15pm#1Okay, small bit of good news on the fundraising side.
Up until now, tax exempt status and charitable status were not really formally laid out in Irish Law. The Charities Bill was designed to address that. If you want charitable/tax exempt status under the Bill, you have to be recognised as a charity, and the bill specifically exempted sporting bodies from being recognised as such.
However, an amendment to the bill making sporting bodies actual charities, something the Federation of Irish Sports was chasing after, has succeeded. This means that sports NGBs and sports clubs will be able to register as charities - meaning tax breaks for donators, and basicly more money for the sport.
Of course, the Minister may decide to reintroduce the ban on sports bodies registering as charities
From the FIS website:EXCLUSION OF SPORT DELETED IN HISTORIC
SEANAD VOTE
The 19-18 vote in favour of deleting the reference to “bodies established for and existing for the sole purpose of promoting athletic or amateur games or sports” from the definition of excluded bodies in the Charities Bill was the first time the government had been defeated in a Seanad vote in over 4 years. The deletion means that the Bill as it currently stands remains silent on the issue of sporting organizations which, would at least afford sporting bodies the opportunity to apply to the new Charities Regulation with a view to obtaining charitable status.
The Seanad proceedings yesterday were however only the Committee Stage and it remains to be seen whether the Minister responsible, John Curran T.D. will seek to reintroduce the exclusion at the Committee Stage. The Federation is encouraging all parties interested in sport to contact their local Fianna Fáil, Green Party & Independent T.D.’s and Senators asking them to implore the Minister not to reintroduce the exclusion.
Speaking in the aftermath of the vote, Senator Jerry Buttimer stated:-
“By voting in favour of Fine Gael’s amendment to the Charities Bill and
defeating the Government, the Seanad has paid tribute to the benefits
sporting organisations bring to the community, and the pressing need
for amateur sport in Ireland to be kept well and truly alive."
From the debates:An Leas-Chathaoirleach: Amendments Nos, 6, 10 and 41 are related and may be discussed together.
Senator Jerry Buttimer: I move amendment No.6:
In page 9, to delete lines 38 and 39.
Amendment No. 6 proposes to delete ”(c) an approved body of persons within the meaning of section 235 of the Taxes Consolidation Act 1997,”. This section of the Taxes Consolidation Act refers to bodies established for and existing for the sole purpose of promoting athletic or amateur games or sports and therefore prevents them from obtaining charitable status. The rationale behind the amendment is to ensure that amateur sporting bodies are not prevented from applying for charitable status under this legislation. In my meetings with sporting organisations I have found that there is some concern that the current exclusion of sporting bodies under the legislation will place the future of amateur sports in Ireland in jeopardy, particularly given the current economic circumstances. There is uncertainty about statutory Government funding, on which many organisations depend, along with charitable support and bequests.
Sporting bodies should be allowed to apply for charitable status on the basis that they fulfil the legal criteria for charitable purpose under the legislation, which includes any purpose that is of benefit to the community. As the Minister knows and as I know, sporting organisations of all hues, particularly small, community-based organisations, play a key role in the advancement of communities and in health promotion, including disease prevention and the tackling of obesity, which has become part of our culture. They also play a part in tackling social exclusion, promoting volunteerism and generally advancing community welfare. I pay tribute to the Federation of Irish Sports, the sporting umbrella body, which does a lot of great work.
Let us boil down the case for this amendment. We have precedent for such a provision in UK law, from which much of our law is taken. The charities legislation in England, Wales and Scotland include such a provision, as does the Bill currently going through the Northern Ireland Assembly. I am concerned that if sporting organisations are precluded from having charitable status, they may be prevented from accessing philanthropic fund-raising streams. The argument will be made that it can be dealt with by reliefs provided under other legislation but, as the Minister knows, tax relief is only available on donations made to certain sporting bodies for the funding of capital projects which have ministerial approval.
Of particular concern is the current economic climate, as there is pressure on Exchequer funding and we have not yet had an announcement about the sports capital programme. We cannot expect sporting bodies to exist solely on funding from the Department of Arts, Sport and Tourism or from some county and city councils. In my own city of Cork, Cork City Council, of which I am a former member, established a sports capital grant for clubs. However, that is now under pressure due to the current economic circumstances. Clubs must have the capacity to raise funds by other means.
The Minister of State, on Second Stage, made the point that it was not his intention to expand or dilute the current charities regime. If I understood him correctly, he asserted that the primary purpose of this Bill was to encapsulate and codify existing laws in the area of charities. Why are we now excluding sport from the scope of this Bill? We are bringing in new legislation which represents a clean slate and a new beginning for all. The legal position as of today is that sports clubs, which are doing valuable work and are of benefit to the community, are not precluded from seeking charitable status. Under this legislation, that will change significantly. The amendments before us are intended to provide a level playing field for all organisations. On one level we have a focus on bricks and mortar, while on the human level the focus is gone or diluted.
I accept the argument that there are different taxation regimes available under the Finance Acts and so on. However, the majority of sporting bodies around Ireland cannot avail of any tax reliefs to assist their organisations. If we are to strive for consistency in the Bill we should include, in the interest of equity, sports clubs as bodies that can have charitable status. We are not doing that, and I do not know why.
We hear from Government about the importance of community involvement, social cohesion and healthy lifestyles. Those things are promoted by sport. Last weekend we had the provincial semi-finals and finals. The Minister of State is involved with his GAA club. Senator Ó Murchú is involved in sport, as are other Senators here. I do not mean to be inflammatory by saying this, but we are discriminating against sport, which is of major importance to the fabric of Irish society. As I said, bricks and mortar are being looked after, but people are not. That is a flaw in the legislation. A sports body can obtain tax relief on the construction of a hall but not on the employment of a coach or philanthropic donations.
I understand the Minister has received advice from the Office of the Attorney General and that the Revenue Commissioners and the Department of Finance have issues with the loss of revenue to the Exchequer if sports bodies are permitted to come within the scope of this legislation. However, if we include sport under the legislation, it will allow sporting bodies to attract money which is at present going to other charitable organisations and which will have an ongoing beneficial effect for the Exchequer. I hope the Minister will reconsider this. I made it clear in my remarks that we do not want to divide on this Bill, because it is a good Bill. However, there is an issue with sporting bodies. I hope what I have said here will move us forward in this regard.
Senator Dominic Hannigan: The problem with the clause as currently drafted is that it codifies the exclusion, for ever, of any sports club from the possibility of claiming charitable status. As Senator Buttimer said, that is not really the spirit the Minister of State expressed on Second Stage last week when he said he did not intend to dilute or expand the current charities regime. The provision seems to codify into law the exclusion of sports on a permanent basis. We ask him to reconsider this clause.
With regard to amendment No. 10, we would like to see the extension of tax reliefs to include not just capital donations but also non-capital donations.
1 o’clock
Senator Rónán Mullen: I rise to support what Senators Buttimer and Hannigan have already said. I do not intend to repeat their points but instead to note that I was in this House when the Broadcasting Bill was debated and I remember clearly that much was made by the Government of the fact that there would be measures to prevent the advertising of junk food at certain times. There was a very obvious reason for the Government’s seeking to highlight that issue. It showed a degree of practicality. We in this country are rightly concerned about the health of our citizens, particularly our younger people. I cannot understand, therefore, why we are proposing to specifically exclude sporting bodies from being able to enjoy charitable status. At the very least one would hope we could include, as per amendment No. 10, the advancement of sport in the definition of “charitable purpose”. At the very least, we should remove the exclusion of sporting bodies. It is important to note that this is not specifically or exclusively about tax. A certain amount of these matters can be dealt with in the tax legislation. A relatively small number of sporting bodies are engaged in capital projects and therefore able to enjoy charitable status in respect of donations for such projects. Many sporting bodies great and small undertake another kind of activity. It could be small things like being able to avail of computers for schools. These may not sound like big undertakings when they are being discussed in this Chamber but in practice they make a big difference. The proposed legislation will deny sporting organisations the legitimacy that would derive from an improved regulatory regime and this is folly. Statistics show that people who practise sports are said to be 14 years younger in health terms. I wish I qualified for that kind of designation.
We need to treat this issue seriously and we need to be serious about sport. We often complain that we do not do as well as we would like to in major sporting events such as the Olympic Games and we rightly celebrate the achievements of people like Pádraig Harrington but it is at the basic, practical level that we really show our attitude towards sport and towards the health of our nation’s citizens. We constantly communicate platitudes about how great our sports people are and how much they contribute to social capital but where is the beef? The beef has to be here in this Bill.
I am co-sponsor of one of the amendments dealing with the exclusion of sport because that needs to change at the very least. As per the other recommendation, we should specifically name sporting bodies as coming within the scope of the legislation, as qualifying for charitable status.
I am broadly in support of people’s concerns about human rights although we might need to qualify that a little. I refer to organisations purporting to promote human rights but which would not promote a vision of human rights consistent with the Constitution. We need to be clear on that point but otherwise I would have no problem with it. I make that point to emphasise that there can be no doubt about sport because sport unites everybody, not just in terms of our ability to celebrate but in terms of our health. I ask the Minister of State to take a generous view in that context. I do not know whether the Minister of State has commented on amendment No. 41 as I was not in the Chamber so I will hold my fire on that one for the moment.
Senator David Norris: I support my colleagues. I spoke at some little length on this matter on Second Stage. Senator Hannigan had it absolutely right, particularly with regard to the fact that the Minister of State said it was not his intention to expand or dilute. However, he has done so because sport previously had a capacity to raise funds. It was not precluded but now it is specifically precluded so there is a limitation process going on.
All my colleagues raised the issue of capital expenditure and I made the point on Second Stage with regard to sports instructors. I am not sure if my colleagues have made the point while I was out of the Chamber but this seems to be discriminatory in terms of tax relief because only the larger bodies such as the GAA and the IRFU will be in a position to attract this tax relief because they will be the ones that are involved in large capital expenditure such as for new stadia and they have already benefited considerably. However, I would be concerned about the smaller, local organisations because they will be completely whacked. They will be deprived on both fronts. The Minister of State’s party used to talk a good deal about the plain people of Ireland but it is the plain people, the ordinary people, the people in the little local areas who will be damaged by this legislation and that is very regrettable.
I strongly support this amendment. I refer to the briefing document about which I have a reservation. It deals with the stinginess of the Department of Finance which is legendary and trying to reassure the Department of Finance by saying that by including sports within this Bill, it would be a means of attracting money which is currently going to other charitable organisations. This is the weakest argument I have ever heard. I do not want charities poaching from each other and I do not think we should seek to reassure the Department of Finance that, for example, a local hurling, football, camogie, hockey or rugby team or any other kind of team sport can get money that would otherwise go to Concern, Hope, Trócaire or such groups. That is a very weak argument and I do not like it. The argument may appeal to the Department of Finance but it sure as hell does not appeal to me.
Senator Labhrás Ó Murchú: I look forward to the Minister of State’s response to these amendments because I know he is keenly conscious of the importance of the sports organisations, their value within and the contribution they make to communities. One could go so far as to say that without many of these sports organisations, communities would certainly be very impoverished. They also play a very distinctive social role because it is through those organisations that young people are gainfully occupied and they learn team spirit which often spills over into other aspects of community activity. Anti-social behaviour exists on the periphery of life and sport helps to ensure that this behaviour does not expand. The focus on sporting fitness can help keep young minds from thinking about alcohol and drugs. A person who wants to be supremely fit will not succumb to abuse of alcohol or other types of drugs. All the points made regarding the unifying effects of sport are important. Anybody who has seen their local club advancing in a championship and sees a whole village or town following that team will know that the team becomes the focus of the community and the focus of the very essence of community. This is an important value to have and if this value is removed, there is less cohesion within the community. Sports make a contribution to the economy because hurleys and sports gear must be produced and sold.
It is a different issue in the case where sport has become a commercial pursuit. They are then charging for their services and are able to provide themselves with whatever finances are necessary. It is important to make that distinction. I hope the Minister of State in his reply will be able to point to sections of the Bill which show there is accommodation for some of the points raised.
Deputy John Curran: Prior to the publication of the Bill there was an extensive consultation period. The question of sporting bodies attracting charitable status did not emerge at that stage as a matter of any concern. The issue of sporting bodies being eligible for charitable status only emerged in recent weeks and this is surprising in some respects. I have a great appreciation of and involvement in sport. I am not disputing the positive impact it can have. There are many local sporting organisations which I personally support and know their impact. Whether it should be regarded as a charitable purpose is another matter.
Approved bodies within the meaning of section 235 of the Taxes Consolidation Act 1997 are not to be regarded as charitable organisations for the purposes of the Charities Bill. The advancement of sport is not included as a charitable purpose. The Bill seeks to retain the charitable purposes that have developed in common law over many years which form the basis for decisions made by the Revenue Commissioners on eligibility for charitable tax exemptions. The advancement of sport is not currently a charitable purpose in this context. The Bill does not seek to expand or narrow charitable purposes, which adding the advancement of sport would do, but to maintain the status quo.
As I stated on Second Stage, I do not believe considering the inclusion of sporting bodies as charities on the principle basis that a particular advantage might accrue to them under the taxation system is a sound rationale. This is especially the case when, under section 7, the Revenue Commissioners alone have, and will continue to have, responsibility for granting tax exemptions independently of any decision of the proposed charities regulatory authority.
Amendment No. 41 proposes an amendment to tax legislation. The Minister for Finance is responsible for tax law and I could not accept that amendment in this House.
In recent days I have had significant contact from various sporting organisations on this matter. Many of them felt the reason they wanted charitable status was because their tax situation would be somewhat different. That is not the case. From a practical point of view, if this amendment were accepted, sporting organisations which would fall under this regulation would have to comply and submit reports and returns in a way they traditionally might not have done.
Senator Hannigan claimed this was going to be the way for all and ever. That will not be the case. This legislation does not aim to broaden or narrow the boundaries. There will be a mandatory review of the legislation in five years in acknowledgement that what we are trying to do is quite complex. If this amendment were accepted, the next step would be to define what is a sports organisations with a public benefit. Is it, say, the darts team or the GAA club? Having spoken to numerous sporting organisations, their primary concern is that the benefit would be in tax law which this legislation will not address. As this legislation beds in over the next five years before the mandatory review, there may well be substantial changes. Most sporting organisations I have spoken to, including some of the larger ones, realise it is not necessary for the tax benefit provision to be included in the charities legislation.
Senator Jerry Buttimer: We are embarking on a legislative process so the consultative process is not binding on anyone. It would be unfair to cast the aspersion that some of the sporting organisations came to this legislation late. Given that there is a mandatory review in five years, what is wrong with inserting the amendments concerning the advancement of sport on the basis that we are broadening the definition to include amateur sporting organisations and the smaller groups to which Senator Norris referred? I have a fundamental concern for these groups. I am not speaking for the umbrella organisations such as the FAI, the IRFU or the GAA because the reports from Croke Park Teoranta last week made great reading. I am concerned about amateur sporting organisations which are amateur in name only but professional in their output and contribution to society.
The Minister of State must accept there is a chasm between what the Government, in the general sense, provides and what these organisations take on. If one were to wait for the Government to provide funding or facilities for sporting organisations to fill this chasm, it would never be filled and we would have social disintegration. I say that as someone involved in one of my local sporting organisations. Rather than divide the House on a good Bill, why can we not provide for this now and review it after five years?
Senator Dominic Hannigan: I am glad to learn the Minister of State has been in contact with many sports bodies. Some of them are coming quite late to the party and have just realised this legislation is imminent. I have been receiving e-mails on this subject from sports bodies over recent weeks. The most recent was three hours ago from the Federation of Irish Sports which represents 60 bodies. It is still pushing for tax relief for non-capital schemes. I accept the Minister of State and his officials have probably spoken to more sports organisations than I have. However, I will reserve the right to table another amendment on Report Stage.
Senator Buttimer’s suggestion seems sensible. If this legislation is to be reviewed in five years, we can remove this exclusion of sports bodies and see what way the land lies in five years. If there is evidence it is not working, then it can be removed. It should be inserted now and meet all our needs.
Senator Rónán Mullen: I agree with Senator Hannigan. The mere fact that organisations have raised their concerns late in the day is hardly worth mentioning. The issues they have raised must be addressed on their merits. Is the Minister of State assuring us this proposed exclusion of sports bodies will not impact in any way on the current situation? This was the reason for my tabling amendment No. 41. I anticipated what the Minister of State would say on it, given that it relates to tax matters. Article 21 of the Constitution provides that Seanad Éireann can merely make recommendations on money Bills. It seems we have gone a little too far in excluding the possibility that we might make amendments that have financial implications.
The Minister of State claims he cannot accept amendment No. 41 because it is matter for tax legislation. The purpose of the amendment is to amend section 847A of the Taxes Consolidation Act 1997 which provides relief in respect of donations which are made towards approved capital projects for sports bodies. This amendment would amend the section to ensure donations which are made in respect of non-capital projects can avail of the same tax relief as those which are made for capital projects, while also being subject to the same conditions. The Minister of State may take the view that there is a separate regime provided for sports and that it is operating effectively. The reality is that section 847A of the Taxes Consolidated Act 1997 is a restrictive form of tax relief for sports organisations. One has the absurdity that tax relief on donations is available in respect of a sports club which secures ministerial approval or designation regarding the planned construction of a sports hall but that tax relief would not be available in respect of donations towards the engagement of a sports coach. That is clearly anomalous.
It is a matter concerning tax legislation but also concerning the question of whether and how sports bodies should enjoy charitable status and get tax exemptions or relief in respect of donations. I ask the Minister of State for the assurance that the proposed exclusion of sports bodies will have an impact on how decisions are taken in respect of tax relief on donations to sports clubs, in a way that is not happening at present. We have the opportunity to set a standard. As Senator Hannigan has pointed out, this legislation will be reviewed in five years’ time so this logic applies in support of the deletion of the exclusion of sports bodies.
It is not just a matter of tax relief, it is a matter of giving legitimacy to sporting organisations and to the activities they have under way, and to give them a profile and cachet when they seek support of kinds other than those involving tax relief.
Senator Labhrás Ó Murchú: The Minister of State has pointed out that the purpose of this legislation is to update and upgrade what could be considered archaic legislation. It is evident that all speakers appreciate what the Minister of State has done. He has listened carefully to the many points that arose, not just in the consultative process but also in respect of points that were parked over the years. The consultative process is an important element in the legislative process. The consultation process for the Charities Bill was very broad and is ongoing. It is significant that sporting bodies did not arise in this context but the five year period gives us an opportunity, bearing in mind the number of years we have had to deal with this situation, to bring the legislation to this point.
If we open up the possibility of seeking definition, we would have to rebuild a major part of this Bill. Many charity organisations I spoke to are looking forward to the enactment of this as quickly as possible. One of the great assurances given to us on Second Stage was that existing charities will automatically transfer to the new regulatory body. This means that there will be no backlog and existing charities will not have the same administrative requirements as new charities.
The Minister of State makes the point that one might impose on existing sports bodies a whole new administrative requirement to fulfil the obligations of the status. There are many more issues involved than our idealistic one, which is the importance of sports bodies to the community. They serve a major community purpose in this regard. The Minister of State will consider what is proposed. I would not like to see this opening up, particularly when there has been such cross-party support for the Bill in both Houses. I would not like to slow down the process too much.
Deputy John Curran: I refer to amendment No. 41. It is not that, as a member of a sports club, I would be unsympathetic to having a more favourable tax regimes but this is not the way of doing it. It is a tax law that must be addressed. The Charities Bill makes the distinction between the two separate functions of Revenue and the charity regulator. In this amendment we do not have that.
Senator Hannigan referred to receiving e-mails up to recently. I received the same. I rang a number of people to discuss this, ranging from chief executive officers and directors to development officers on behalf of the organisations. I do not want to put down public consultation but many organisations had not gone into this matter in depth. I spoke to people within organisations and I tried to tease it out to see if we were missing something or if we were causing real problems. I was concerned and I spoke to many people on this.
On the principled basis that a tax advantage might accrue under the taxation system, it is not a sound rationale for inclusion of sporting bodies as charities. Senators have suggested that we include them and then exclude them in five years’ time if it is not working out. If we remove the automatic exclusion, every club in the country is obliged to register as a charity. With that would come responsibilities that clubs do not have now. Sporting bodies would be subject to additional regulatory scrutiny and would have reporting requirements they do not have now. We would impose this on them according to their activity. From the range of people I have spoken to, at the moment the primary interest in this legislation is tax.
Senator Dominic Hannigan: Could it be an opt-in measure, where clubs choose to opt in?
Deputy John Curran: The legislation is such that activities that are advanced as charitable purposes would have additional reporting responsibilities that do not apply at the moment. Charities have been unregulated in the broad sense for a long time. We are trying to preserve the status quo and to recognise the situation as it is, knowing that it is evolving. That is the reason for the mandatory review within five years.
Senator Jerry Buttimer: Lest Senator Ó Murchú get it wrong about this side of the House, we are fundamentally in favour of the principle of the Bill. Sport plays a key role in the community but, under this legislation, we are precluding sport and sporting organisations from seeking charitable status.
I have a question for the Minister of State, the answer to which I half know. I refer to the status of Special Olympics Ireland, which organises the Special Olympics. The organisations that come under that are charitable organisations, such as the Cope Foundation in Cork. Do they have exemptions even though they are not capital projects? I would like the Minister of State to clarify that.
The current legal position is that sporting bodies can apply for charitable status. By virtue of this Bill being passed, they will be precluded. That is a form of discrimination.
Regarding the imposition of the reporting procedure, Bishopstown GAA club held its annual general meeting last Friday night. We have a very good treasurer in Jim Collins, who is very sincere in what he does. We sent our treasurer’s report to accountants to be regulated and audited. Sporting clubs would not have a difficulty in being included in this in terms of reporting. There must be regulation of all bodies in respect of handling money. That is a spurious argument although I know where the Minister of State is coming from.
We are talking about the advancement of community. The Minister of State and Senator Hannigan referred to the Federation of Irish Sports. That body appeared before an Oireachtas committee this year. It is a vibrant group with great ideas, representing sporting organisations of different types. I do not know why it would be so exercised about something if its members were not passionate and did not have legitimate concerns. They would not waste time and energy meeting the Minister of State and appearing before the committee if they did not have legitimate concerns. They do, and I do, as a sports person. We are talking about the benefit of community. We are not talking about regulation. We all accept the principle of regulation and we all welcome the Bill, however we are precluding sporting organisations, which is wrong.
Senator Rónán Mullen: I hear the Minister of State’s arguments and there are reasonable arguments on both sides. What mischief would result from accepting amendment No. 6 and removing the exclusion of bodies “established and existing for the sole purpose of promoting an athletic or amateur game or sport” from the remit of the legislation?
Deputy John Curran: As I said, if that was removed there would be an obligation on every sporting body to register and be subject to all the regulatory control that goes with that. In reply to Senator Buttimer on the Special Olympics, any organisation that has a charitable status would retain that. Many sporting clubs that might have charitable status, for whatever reason, can also have it for the activities in which they are engaged, for example if they are dealing with disadvantage or if they establish a trust to do something. Different organisations develop in different ways. I re-emphasis that the primary focus of the legislation was to maintain the status quo, to regulate what has evolved through common law and which is effective, knowing it is an evolving situation with a mandatory review.
Senator Rónán Mullen: Perhaps the Minister of State will assist me, and I hope I do not misunderstand things too badly. Removing the exclusion would leave the Bill silent on this issue. How can such silence require all sporting bodies to register? Surely those sporting bodies that wish to avail of certain status would be required to register in that situation. I do not ask the Minister of State to specifically include sporting bodies, as per the other amendment, but to remove their exclusion. It would make the Bill silent on the question of sporting bodies. Is the Minister of State really saying that if the Bill is silent on this, it would automatically create an obligation on all sporting bodies? I do not mean my use of language to be pejorative. I do not believe that is what he means.
Senator Dominic Hannigan: Following from Senator Mullen’s point, what if we return on Report Stage with an amendment stating an included body can include a sports body if it fills in the necessary forms and provides the necessary accounts? Would the Minister of State be happy with that or does the issue go beyond the concept and principle of having a sports body as a charity?
Senator Jerry Buttimer: Revenue practices exclude sport but common and statutory law does not. We do not want to divide the House on this. If we could get a guarantee, we would be happy not to press the amendment. I cannot comprehend the reticence and reluctance regarding sport. It is a fundamental flaw in the Bill. We are penalising sporting organisations. That is the fundamental point.
Senator Paddy Burke: I listened with great interest to the debate over the past hour, particularly on those amendments. One would wonder why the Minister of State excludes sporting bodies. There must be a reason. Is it a financial reason because of the amount of money that may flow into sporting bodies if they availed of tax relief? The Minister of State could qualify it. It would be a shame to divide the House on this. It is a very important issue and everybody is at one on those amendments. The Minister of State could qualify the sporting organisations to at least local level. He could name some of the sporting organisations. It might be unfair to name them and perhaps that is the kernel of the problem he faces. There must be some problem, whether with the Department of Finance or another Department. I do not know. However the bases of the points made by the Senators are very good.
The Minister of State could quality this to say the local or lowest level of sporting organisations could avail of charitable status. Some local sporting organisations will come under severe financial difficulties in the next few years and will find it very difficult to survive. Something could be done in this Bill. The Minister of State said the financial area and the finance that could accrue to those sporting organisations from the tax relief is not the perspective from which we should look at it, but that is the perspective from which everybody is looking at it.
Deputy John Curran: That is the point. I have spoken to many of the groups and they genuinely believe there would be a change in their tax status and that revenues would accrue to them that they would not otherwise get. That is not the case. As I emphasised at the beginning, we are trying to maintain the status quo. I have a great sympathy and passion for sport, but the Bill reflects the status quo. I am conscious that we have a mandatory review because I suspect circumstances will change substantially over five years.
Senator Rónán Mullen: Perhaps the Minister of State would address my specific point. If the Bill is silent and does not specifically exclude sports organisations, surely that would put us in a situation closer to the status quo.
Senator Labhrás Ó Murchú: As there is a vote in the Dáil, I propose that the sitting be suspended.
An Cathaoirleach: As the bell has just started we might just
Senator Jerry Buttimer: This is our third interruption. Senator Norris will speak on this Bill. This started the last day and I do not know who is responsible.
Deputy John Curran: I do not know either.
Senator Jerry Buttimer: In fairness to the Members of this House and to the Minister of State, this is important legislation and should not be interrupted for a vote in the other House.
An Cathaoirleach: The Minister of State is not paired.
Senator Labhrás Ó Murchú: We had to suspend for a vote on Second Stage, but the Minister of State must go to the Dáil.
An Cathaoirleach: We will suspend until 1.50 p.m. Is that agreed?
Senator David Norris: No, it is not agreed. I indicated this earlier. I do not agree to this.
Question proposed: “That the sitting be suspended until 1.50 p.m.”
Senator Frances Fitzgerald: On a point of order, there is no problem about a pair when the Minister is doing
An Cathaoirleach: I will not take a point of order. The question has been put. The time allowed for voting is one minute and the time starts now.
The Seanad divided: Tá, 23; Níl,16.
<bit of scuffling at this point>
Senator Jerry Buttimer: I do not want to divide the House on this amendment but the issue is the benefit that would accrue to sporting organisations. By including them in the legislation, it will enable them to attract money from whatever source, some of which will be given to other charitable organisations. Such funding attracts tax relief for the charitable organisations I mentioned. There will be no loss to the Exchequer if sports are included in the Bill. I understand what the Minister of State said about Revenue, the Taxes Consolidation Act and the Department of Finance, but the amendment will make no appreciable difference to the Exchequer or the Revenue and it would enhance the participatory work done by sporting organisations on the ground. In particular, the Federation of Irish Sports has met every Member and its representatives would not urge us to include sports if they felt it would not benefit them. I understand where the Minister of State is coming from but I appeal to him not to divide the House on this.
Senator Rónán Mullen: I am not happy that I received a satisfactory answer to my question. If the exclusion of sporting bodies was removed through the amendment and the Bill was silent on the issue, what mischief would that cause? The Minister of State said he is protecting the status quo but sporting bodies have applied for and enjoy charitable status. Will new organisations, clubs and associations coming on stream be unable to avail of a recognition that is currently available to certain bodies if the exclusion in the legislation is retained? Is the Minister of State retaining the status quo in the sense that he proposes to exclude certain bodies from accessing a benefit that is potentially available to organisations in existence?
Senator Paddy Burke: Senator Mullen has put his finger on the nub of this issue because the Minister of State has given the impression that a sporting organisation that is not granted charitable status will not be at a monetary disadvantage. Surely the excluded organisations will be at a disadvantage because those included will have a greater opportunity to obtain funding from people who can avail of a tax break. Is that not the reality? According to what the Minister of State said, excluded bodies will not be at a great disadvantage.
2 o’clock
Deputy John Curran: There is a misapprehension that by automatically being included as a charity, one’s tax situation will change. It will not. There is a clear distinction in the legislation. Anyone who currently enjoys tax status with Revenue automatically transfers but the majority of sports clubs do not. Those which may do, and which would have a status with Revenue, would have it for a specific activity. In other words, a sporting club would not be precluded from establishing a charitable trust to do one of the things the charities can do. However, it would be precluded for its sporting activity. The emphasis is to maintain the status quo as has evolved through common law.
Question put: “That the words proposed to be deleted stand.”
The Committee divided: Tá, 18; Níl, 19.1
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