Further to Friday’s item about the need for Australia to follow New
Zealand’s lead and establish a Charities Commission, some fascinating
correspondence about The Salvation Army has arrived at the Crikey
bunker.

It seems today’s Salvation Army is not “The Salvos,” esteemed by
soldiers in two World Wars. Instead, The Salvation Army is now a
commercially-driven organisation motivated by money, which can be quite
ruthless with its staff and enjoys a privileged relationship with the Federal Government.

The Salvation Army’s Employment Plus division is the largest player in
Job Network, a multi-billion dollar Federal Government initiative. It
receives about $250 million a year for its efforts, some of which
disaffected former staff believe is squandered on large salaries,
entertainment and other benefits for senior management. However, being
a church, Employment Plus is not accountable to anyone in relation to
its fiscal affairs and competes with private operators in the Job
Network who must pay full tax.

Furthermore, because of its
non-taxable status, its employees are able to benefit from a ‘salary
packaging’ scheme whereby up to 30% of their income is tax free. This costs the
Australian taxpayer millions of dollars every year. It also gives
Employment Plus a huge advantage over its competitors.

Then you have the windfall gains from sale of the Salvation Army’s
retirement villages. These were largely set up in the 1950s and 1960s when
the Federal Government paid one third of the cost, the relevant State Government paid one third and one
third was paid by The Salvation Army who then owned and operated the
institutions. Many of these villages are on prime real estate
which The Salvation Army has held free of rates and taxes for the best
part of fifty years.

The Salvation Army sold 14 of these properties to a Macquarie Bank vehicle for an
estimated $120 million earlier this year and is examining further
sales, all of which will be completely tax free. Shouldn’t The
Salvation Army repay one third of the proceeds of these sales to
the Federal Government and another third to the State Governments,
which could use these funds to provide alternative retirement
accommodation? If not, why not? After all, it was taxpayers’
money.

Gough Whitlam’s former private secretary Race Matthews claimed on
Saturday at the Fabian Society’s national policy conference that the
Howard Government has systematically used contracts such as the
Employment Plus deal to effectively silence churches and not-for profit
groups.

However, outspoken commentary by church leaders on the industrial
relations legislation suggests they are not completely compromised,
especially in areas where they have no commercial dealings. That said,
it would be interesting to look back at the public positions
taken by The Salvos over the past few years.

The Salvos raised a record $53 million in last year’s Red Shield
appeal, but few donors would appreciate that they are Australia’s
fourth biggest church with 2004 revenues of $625 million.