The High Court ruled Wednesday (2 December) that Aid/Watch should win back its charitable status after it was revoked in October 2006 following a ruling that Aid/Watch was not entitled to such status because it engaged in political activity.

"The court stated that the generation by lawful means of public debate concerning the efficiency of foreign aid directed to the relief of poverty is itself a purpose beneficial to the community," a statement released by the High Court read.

The High Court ruling overturned a previous full Federal Court ruling and restored the decision of the Administrative Appeals tribunal in 2008.

Aid/Watch is a member based "watchdog" organisation that monitors the flow of aid money in the southern hemisphere. On its website it described itself as being "independent and fearless", and promotes development alternatives based on social and environmental justice.

It lost its status as a charitable organisation after it criticised the overseas aid policy of the Howard government.

"The argument we ran before the High Court was that you shouldn't be unfairly treated for engaging in political debate," Maurice Blackburn senior associate Giri Sivaraman said.

"With this ruling, the High Court overturned 90 years of Australian law that found that you could be disqualified [for charity status] by entering into political discussions."

Sivaraman led the Maurice Blackburn team, which also involved Federal Court action prior to the matter reaching the High Court. He was assisted by his colleague David Barnden and barristers David Williams SC, Sheila Kaur-Bains and Rashelle Seiden.

"We are pleased that the High Court agreed with many of our arguments - that engaging in political debate is an essential part of advocacy work and very much in the public interest," Gary Lee, the Aid/Watch director said in a statement. "The ATO's 2006 decision sent shockwaves through the charitable sector and had a chilling effect on the willingness of the charitable sector to speak out. This outcome finally resolves this issue."

Sivaraman said that then High Court ruling could have the potential for groups and organisations with an advocacy focus that have never applied for charitable status with the ATO to now apply for that recognition.