According to the Government, the draft legislation preserves the common law definition of charity, including long established principles such as the presumption of public benefit for certain charitable purposes.

It also incorporates feedback from its 2011 consultation paper, as well as recent court decisions, such as Aid/Watch Incorporated v Federal Commissioner of Taxation, which extended the circumstances in which a charity may advance public debate.

Assistant Treasurer David Bradbury says that having a clear and succinct definition of charity set out in legislation will cut down on compliance costs for those wishing to establish charities and make the definition more accessible to the community.

“The meaning of charity and charitable purpose has not been previously comprehensively defined for the purposes of Commonwealth law,” says Bradbury.

“It has been administered on the basis of principles derived from the common law, going all the way back to the Statute of Elizabeth of 1601.

“Charities are such an important part of the Australian community and deserve a modern regulatory framework which will support them as they grow into the future,” he says.

The proposed start date for the statutory definition of charity is 1 January 2014.