‘Huge win’ for charities as Coalition declines to appeal landmark case

The charity that won a landmark case giving the sector greater freedom to engage in political advocacy says the government’s decision not to appeal is a “huge win” that will give it a greater voice in Australia’s democracy.

Last month, global anti-poverty charity Global Citizen won a crucial case against the Australian charity regulator, which had denied it public benevolent institution (PBI) status because of its political advocacy and attempts to influence governments.

The PBI status was critical to the organisation’s ability to fundraise and successfully operate in Australia.

The administrative appeals tribunal (AAT) found the charity regulator was wrong in its stance, and that most large PBIs had to engage with the political process as a “regular and indispensable part of their work”.

The ruling has been hailed by leaders in the sector, including the Rev Tim Costello, who said it would free up charities to engage with the political process without threat to their funding.

“It frees charities from always looking over their shoulders and being anxious. We can be honest about what our mission is with our donors,” he said.

Related: Tim Costello lauds ruling allowing charities to lobby for political change

The Australian Charities and Not-for-profits Commission had 28 days to appeal against the ruling. But in a brief statement published on its website, the regulator has indicated it would not do so.

Global Citizen told the Guardian the decision not to appeal was a welcome one that it hoped would give charities a stronger voice in Australian democracy.

Regional director for Oceania, Sarah Meredith, said poverty could not be ended with “a series of black tie dinners”. Fighting poverty, she said, required fundamental policy change, which was only possible through political advocacy.

“It’s going to require large-scale systemic changes and governments are the key players in determining the funding and the framework for that,” she said. “So to say we shouldn’t have that conversation and be advocating for those changes to government … it’s just as the AAT members said, that there is evidence that it’s a regular and indispensable part of the work of most PBIs.”

The ACNC has now promised to give more detailed guidance on how it will define PBIs.

ACNC general counsel, Anna Longley, said a detailed statement to the sector would be published in “due course”.

“We are carefully considering the tribunal’s decision and will publish a statement clarifying any implications relevant for charities,” Longley said.

Meredith said the case highlighted just how outdated definitions of public benevolence were.

“It really does highlight that the law was established so long ago, the decision talks about the Great Depression and when they determined what was benevolent relief of poverty and what is benevolence – our law hasn’t really been updated to talk about that or define it,” Meredith said.

“So when you apply for a PBI, there really is no test or definition. What this decision says is that it’s about the purpose and what you work for in relieving poverty, and that a charity may undertake a number of activities, but that doesn’t define who you are and your purpose.”