Churches Are Exempt From The $1,500 Tax-Free Limit On Plebiscite Donations

Sources say the church's tax-free status is a potential problem.

The $1,500 cap on tax-deductible donations to the "yes" and "no" campaigns in the marriage equality plebiscite could give an unfair advantage to the "no" camp, according to sources within the Coalition.

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The federal government on Tuesday announced plans to give $7.5 million each to the "yes" and "no" campaigns, while both sides will also be able to accept donations.

The "no" campaign will be supported by the powerful and wealthy Catholic church, along with other faith and ethnic groups.

In Australia, such groups do not pay tax, and so will remain unaffected by the $1,500 tax-free threshold on plebiscite donations that applies to individuals and corporate donors.

A moderate Liberal MP told BuzzFeed News that some in the party are concerned that churches could be used to to collect large donations for the "no" campaign.

To avoid the cap, people could donate large sums to churches who then donate to the "no" campaign, tax-free.

On Tuesday, special minister of state Scott Ryan said both sides had been treated "exactly the same".

"There is tax deductibility in line with the contribution to a political party, capped at $1,500," he said.

"There will be supporting and opposing committees established outside the official 'yes' and 'no' committees and they are free, of course, to run their own particular campaigns as long as they comply with the act."

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Australian Marriage Equality chair Alex Greenwich said the cap presented an "uneven and unfair playing field".

"People can donate unlimited [amounts] to religious organisations, but when it comes to the "yes" case in the context of a plebiscite, it's capped," he said.

Sources in the Coalition told BuzzFeed News another strategy behind the cap is to block money coming from activist group GetUp. In the wake of the election, some conservative Liberals blamed GetUp for the loss of several seats in Tasmania. On Tuesday morning, conservative Tasmanian Liberal Eric Abetz made a lengthy speech to the Senate denouncing the group.

Another source said the $7.5 million cap was designed to prevent the campaigns from growing so big they affect the government's political standing by overshadowing government business.

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Public funding has been a source of much consternation in recent months, with the "yes" campaign saying no extra money should be provided, and the "no" campaign saying it is essential to run a fair campaign.

However, leading voice in the "no" campaign Lyle Shelton, from the Australian Christian Lobby, told ABC Radio this morning that he thought the $7.5 million for each campaign is "on the low side", and that the amount should have matched the 1999 referendum, adjusted for inflation, which would come to around $11 million in today's money.

BuzzFeed News understands that some of the largest corporate supporters of marriage equality in Australia, including Telstra and ANZ bank, are unlikely to provide financial support to the "yes" campaign.