Freemasons go under microscope

The Freemasons are in court battling to maintain tax exemptions, arguing that their activities, however secret, are primarily charitable.

While the society's Grand Lodge has held a tax-exempt status for more than a century under non-binding decisions made by the Inland Revenue Department, the Charities Commission turned down its application to be registered as a charity.

Since July 1, 2008, organisations have had to be registered as charities in order to gain tax exempt status.

The commission, set up to promote confidence in the charitable sector, has rejected applications from several high-profile organisations, including Greenpeace and the Sensible Sentencing Trust.

The commission conceded that some of the activities of the Freemasons organisation, through its senior authority the Grand Lodge, were charitable, but that its main purpose was to benefit its own limited membership. Members of the Grand Lodge must have reached the rank of Master Mason, be male, at least 21 years old and be nominated by other members of the lodge.

Peter MacKenzie QC, acting on behalf of the trustees of the Grand Lodge, told the High Court at Wellington that the Grand Lodge administered a benevolent fund, expressly for charitable activities.

A separate property development fund, which lends money for the formation of lodges at a local level, also dedicated some of its funds to charity, including the funding of scholarships.

Mr MacKenzie argued that other activities carried out by the lodge, which include a quarterly magazine with a circulation of 17,000, encouraged Freemasons to act charitably, so should be regarded as charitable.

Acting for the Crown, Tania Warburton said that some of the activities of the Grand Lodge were charitable, but that its main purpose was to promote Freemasonry in New Zealand, and that much of the movement's beliefs and practices were kept "substantially confidential".

"The Grand Lodge does not exist for the benefit of the public," Ms Warburton said in her submission.

"A substantial part of the Grand Lodge's purposes advance or benefit its members," and accordingly should not be given charitable tax exemption for non-charitable activities.

Justice Simon France is expected to release his decision in several weeks.

Some charities have already decided to hive off income dedicated to charitable activities into a separate trust to gain tax-exempt status for at least these activities.

Laurence Milton, the grand secretary of Freemasons New Zealand, said this was a "fall-back position" for the organisation to take.

Mr Milton would not estimate how much the loss of tax-exempt status could cost the Freemasons, but that it would have "an impact" on some of its income.

"And that will have an impact on our charitable activities," Mr Milton said.

- © Fairfax NZ News