Local Governing Bodies, Public Authorities and Institutions of a Charitable Kind
20.20. The incomes of local governing bodies, including those administering public utilities, have been exempt since the inception of Federal income tax, presumably because they are statutory bodies carrying out what are thought to be functions of government. On the other hand, the main commercial and trading undertakings coming within the control of the Australian Government are subject to income tax on the same basis as a public company. Thus, for instance, the Commonwealth Trading Bank and the Australian National Airlines Commission are taxed on this basis. The Committee sees no reason to vary the existing income tax position of these local governing bodies and Australian government undertakings.
20.21. In Chapter 25 the Committee has recommended that the present exemptions, under sections 23 (e) and 23 (j) (ii), of religious, scientific, charitable and public educational institutions and funds for charitable purposes be continued. There are some other institutions and funds exempted by the provisions of section 23 of the Act which might be thought to be of a similar nature. These are hospitals carried on by an association otherwise than for the profit of its members (section 23 (ea)), medical and hospital benefit funds registered under the National Health Act (section 23 (eb)), and funds established for the purpose of enabling scientific research to be conducted by or in conjunction with a public university or public hospital (section 23 (j) (iii)). The Committee considers that these institutions and funds should continue to be exempt from income tax, though it acknowledges that the exemption may have to be qualified if business activities are carried on which compete with the activities of commercial organisations. This matter is considered in Chapter 25 in relation to charities.