Three Things We Should Know About Australian Generosity


Every year the tax authorities delivers revealing insights into the generosity of Australians courtesy of a report titled Taxation Statistics which details every deduction made by individual tax payers claiming charitable donations. Whilst the report does not detail every contribution made towards a good cause it is an extremely rigorous study of the country’s altruism. Here are three takeaways from the latest ATO report.

1. Individuals don’t give away a very big share of income

According to analysis of the most recent tax data undertaken by Queensland University of Technology, during the 2014-15 financial year, tax-deductible donations made by individuals climbed to a record high of $3.1 billion. Whilst that is a lot of money, unfortunately the share of income that is being donated is falling. On average individual taxpayer donations made up just 0.4 per cent of their taxable income which is lower than what it was prior to the Global Financial Crisis.

 2. Charities depend heavily on the super rich

There is an elite group of taxpayers comprising just 6,600 people with annual incomes exceeding $1 million who made more than 20 per cent of all tax-deductible donations during 2014-15. This is obviously down to the fact that wealthier people have more discretion to give. Despite this fact, high income earners, i.e. those earning $180,000 or more per year are more sensitive to gyrations in the stock market and economic shocks than other income groups. So it comes as no surprise that tax-deductible charitable donations slumped in the aftermath of the financial crisis and has never really recovered.

3. Even so, the rich don’t necessarily donate the biggest share of their incomes

What is truly surprising is that middle and low-income neighbourhoods tend to outshine wealthier people when it comes to the proportion of income that people are donating. The NAB Charitable Giving Index shows that people who live in the suburbs and have modest incomes donate the biggest share of their income. The latest tax figures suggest that approximately 40 per cent of those earning over $1 million in taxable income claimed no tax deductions whatsoever during 2014-15. It is shocking to learn that people with that kind of income do not claim anything, particularly when they are the type of people who keep their receipts or have someone do it for them.

"Please note, any prices mentioned in the Charity Gifts blog are correct at the time of posting. Please check the relevant website for the latest pricing information."

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