Volunteering — the ‘Blind Spot’ of Economic and Taxation Policy

There is increasing speculation surrounding the release of the Henry review of the Australian Taxation System. Most likely there will be little on offer for Australia’s 5.4 million adult volunteers. Despite their labour contributing an estimated $42 billion a year to the Australian economy – more than the mining and agricultural industries – this valuable ‘human resource’ continues to be ignored in our economic and taxation systems which has huge ramifications for volunteers.

Today’s global financial and economic structures still operate under a system established by the Allies over 60 years ago during World War Two. Refined in the early 1950s by the United Nations in A System of National Accounts and Supporting Tables, it only recognises economic data captured through the Gross Domestic Product (GDP) – the market value of all goods and services. Unfortunately the GDP does not pick up volunteer activity because it is unpaid and there is no financial remuneration for the work undertaken. Just like domestic labour in the home, volunteering in the community is not taken into consideration or counted through our primary economic indicators.

Many commentators, like Marilyn Waring, have pointed out this anomaly, that if its not counted, it doesn’t count. So while the data on the economic value of volunteering continues not to be captured or recorded in the standard economic indices, volunteering remains outside the main public policy paradigm, and it largely ignored by policy makers, bureaucrats, media and the high end of town. This is despite the exponential growth in corporate philanthropy where the warm and fuzzy idea of ‘doing good’ in a socially responsible fashion has taken hold at the expense of the economic realities of the unpaid labour being performed.

But the Henry tax review is not alone. The recent Productivity Commission’s report on the Contribution of the Not-for-Profit Sector released in January 2010 devoted only ten pages to volunteering. This was an extremely disappointing outcome considering the reliance of non-profit organisations on its unpaid workforce.

Over the last decade governments of all persuasions have become increasingly interested in volunteering. There is no lack of certificates of service or tickertape parades. But there is still resistance to broadening our understanding and creating ways to properly account for the value of volunteering that properly measures its influence and impact on our national economic wellbeing.

For the Henry review to create a new framework for Australia’s tax-transfer and not to acknowledge volunteering is disappointing. This could have policy implications for Australian families with a stay-at-home parent. These non workforce active Australians may well do many hours of volunteering in local sport, school canteens, and meals on wheels building social inclusion and community cohesion and doing jobs no-one else wants to do. But this unpaid work will not be recognised nor valued further marginalising volunteering in the financial world where it should count the most.

Similarly, the amount of volunteering that retired Australians undertake is not counted which distorts their contribution and implies that as they age, they are more of a burden on society than is necessarily the case.

Is this the type of society Australians want to live in the future? I don’t think so. We want a new tax system that could consider tax credits for volunteers, one that recognises the volunteer work of all Australians not one that deliberately ignores it.

The Henry review is a perfect opportunity for the Australian government to recognise, once and for all, the impact of volunteering, to measure and quantify it, not put it in the too hard basket, once again.

If they think they can work out a system to measure and count carbon surely they can work out a system to measure and count volunteering.

Citation: Melanie Oppenheimer, Volunteering — the ‘Blind Spot’ of Economic and Taxation Policy. Australian Policy and History. March 2010.