Lyle Shelton gives no reason or sound argument as to why churches should not be taxed, that is why they should continue to be selectively exempted, moreover why democratic government should be encouraged to evade responsibility for the welfare of its citizens. What Shelton is advocating here, apart from continuing the cosy relationship between the Christian church and state, is neoliberalism. We already have one of the lowest tax regimes among western countries and it should be increased to pay for decent welfare where it’s needed (getting rid of middle class welfare like Abbott’s outrageous maternity leave, as well as the religious drain on the public purse). What Shelton doesn’t mention is that all our charitable organisations amount to a beaurocratic drain with only a fraction of donated funds reaching those who actually need help, the rest kept to finance the organisation. More importantly yet, the church and other charitable organisations actually do us a disservice in applying band-aids to the dire inequities that are the hallmark of western nations. They make things look better than they are while helping to insinuate a (false) sense of community, rather than vicious self-interest, as the abiding community spirit. The church and others should cease all charitable work and so expose the wretched state of our democracies and the miserable penny-pinching, pull-the-ladder-up mentality of the well-to-do Shelton is wittingly or unwittingly defending.

The problem is when the charity or church is involved in business therefore that tax exemption carries over to the business.

For example the catholic church used to own craft foods and it was therefore tax exempt but made heaps of profit that went offshore.

The catholic church used to be the biggest business in the world 30 or so years ago.

One problem is that churches generally are a large entity from which charitable work can be funded.
It is also true that religion is a massive global business, playing on the individual's generosity and altruism to gather huge sums, a portion of which are distributed to the needy of the world.

But the anti-religion stance is not justification enough for the abondoning of tax freedom in Australia. Even if only a small percentage of funding ever arrives at the place of need, that funding would probably not have existed at all without the exempt status of religious organisations.
We are lucky to have socially responsible community groups such as Rotary, Apex, and Lions who also provide a portal for personal generosity.

The responsibility is on all tax exempt charities to be totally open and frank about the destination of their disbursements, particularly when donated funds are used for capital expenditure on buildings and the like.

“In fact, it is the teachings of Jesus that have inspired Christian churches to good works for millennia.”

Christians are inspired by fear to do good works. Doing good works is part of the package of being a Christian. If you want the supposed benefits of being a Christian you have to go along with the whole package – you can’t pick and choose. Christians believe they get comfort from being a Christian which they do not. They believe they will get justice in heaven against their foes. They get fellowship which is based on mutual dependence so it is not really fellowship at all. They think they get answers to life’s big questions but they are not answers in any true sense of the word. In order to protect these things they are told they must do good works.

Sure, things get done but the Mafia gets things done. These things may well get done, and for the right reasons, with the money accrued from taxes placed upon religions. The end does not justify the means.

"provide a public benefit which saves the taxpayer billions."

You mean they deprive the taxpayers of millions.
That could be spent by the government on their own social programs.

The exemption from tax has nothing to do with the value contributed to the community.
It stems from theological belief in the separateness of "this world" and the "other world".
God and Ceasar.

We are past the age of theology influencing law.

One tax for all: bank transaction tax.
Want to avoid it: don't bank the collection.

I don't know if the Catholic Church is the only one that manage=s not to be an entity that can be sued for compensation, but it would seem reasonable that tax exempt status should only be granted to incorporated, sue-able charities.