9th September 2004. I believe most of the oral submissions have now been received and we have to wait for the select committees recommendations. Don't let the fact that the "official" period is now over deter you from having your say. New information may have come to hand, possibly because of the debate that has been going on, which means you may wish to restate your case. My understanding is that the select committee honestly & genuinely wish to get some feedback as to what they should do now. Almost overwhelmingly organisations have pointed out the deficiencies: compliance costs, independence of the Commission (Crown Agent), liability and disqualification of officers, filing times to prepare accounts, displaying registration numbers, definition of charity - including advocacy rights, need for support role of Commission and the select committee appears to have accepted those submissions. You can send additional information to Georgina Beyer @ Parliament House (possibly cc'ing them to Hon Margaret Wilson).

18th June 2004. Only 1000 submissions have been received by the Select Committee which is a disappointing number. We now have to wait on the deliberations.

2nd May 2004. Firstly I would like to thank ANGOA (Association of Non-Governmental Organisations of Aotearoa) for organising a series of workshops throughout NZ. From talking to attendees and presenters it became very clear there is a lot of uncertainty about the bill and its ramifications.

I have always had my doubts about what the bill would contain and I am still very unsettled. However, my stance is that this bill is better than no bill and it is those concerned with outcomes who must shape its future.

Again, a personal point of view, but this bill was established so that government had some idea of what was happening in the "charity" sector. Why we have to fill in those diabolical Statistics Dept forms I have no idea. And the tax department has a fairly accurate picture of what is claimed and by whom. However, the basic purpose of this bill as it stands is to give effect to Government Policy. As a consequence Government will be in a better position to target policy interventions to areas of the charitable sector where a need for further Government assistance is identified.  

Where to from here?

The time for submissions is past. The feeling in the Select Committee is that they have been handed an unworkable piece of legislation (whew, someone at least understands) and they are currently debating whether to reject the bill or redraft it completely. Please let your feelings been known to the select committee know. Most people, and charities, in New Zealand would welcome a proactive independently funded charities commission.

1. The actual content of this bill is minimal - most of the "teeth" are going to be in the regulations. Why? Well, the bill is an Act of Parliament and has to be changed by Parliament . Regulations can be changed by the government of the day. We can talk, debate, submit, lobby as much as we like on the bill but unless we insist on some consultation with regard to the regulations it could be a $60 or a $1000 annual registration fee. I understand that the regulations associated for the recent Gambling Act were circulated for discussion and comment. You should comment, no, insist, in your submissions that the regulations are circulated for discussion. 

2. Do not be put off by what might seem a complicated process of making a submission. The official line is that you have to comment on matters contained in the bill, well, visit the website:
http://www.clerk.parliament.govt.nz/NR/rdonlyres/53DE9B28-CADA-409F-A9FA-47A7E2CE9B30/0/MakeSubE.pdf
but in the past submissions have been made just on a single piece of paper and sent directly to the Chair of the select committe, in this case, Georgina Beyer, c/o Parliament House, Wellington.When commenting on the Bill mention both negative and positive aspects - nobody can complain afterwards that they removed some of the worthwhile pieces simply because nobody commented.

3. This Bill establishes a Crown agent, the next best thing to a government department, to carry out government policy. I do not profess to be an expert, and will leave it to experts to comment, but I believe the Charities Commission should have more autonomy.

4. The bill and the preamble to it talk in nice fuzzy terms. 
Improving accountability and transparency
Enhance public confidence
but in actual fact there appears to be very little in the bill which actually changes the current situation. Today there is nothing to stop a "charity" appealing to the public, raising a million dollars and then giving a $1 pen to a charitable organisation. The question begs how is the public to determine which charities to have confidence in? By recommendations (influenced by government policy) from the commission? By a hard & fast accounting percentage? and will that take into account external fund raising costs as opposed to internal fundraising costs? ( take a charity which is publicly acclaimed for raising over 1.5 million dollars for its cause yet the accounts show an income of only $100,000 as opposed to a charity which directly raises 1.5 million dollars of which $500,000 is directly applied to charitable aims - one has spent $100,000 and the other $500,000 on charitable aims but the books and percentages are much more favourable to the 1st organisation.

5. The question must be answered as to who pays! Like everything in this day and age it would appear the user pays. But who in actual fact is the user? The first and main beneficiary is the government. Will they be paying? If the fees are to be set at a low level, around $50, 1.5 million would provide minimal services, an efficient registry by all means. If they are set at a higher level, say $200 or more, the commission may be able to undertake some form of investigatory and educational powers. How many staff is it going to take to process 30,000 annual returns 4 months after 31st March - sure, it can be insisted they be electronically filed, but there are hundreds of small charitable trusts who have no computer skills whatsoever.

6. Why, oh why, oh why are non registered charities still allowed to operate? At the ANGOA meeting I attended, a gentleman commented that the introduction of this bill will at least take NZ to where the UK was in the mid 1980's. For several years on this site I have suggested that the current UK model is where we should be, ah well, only 15 years wait .... or is it?  You can influence this by making submissions.  

7. It appears that the government, and now the Ministry of Economic Development, are aware that some "charitable trusts" have been established for tax avoidance purposes (my own words would be that they have been established as private money making machines) and somehow, through regulation?, will use the Charities Commission as its public hound dog. The words say that the commission will make use of existing regulations but they haven't worked so far. Ask David Russell. The best words anybody can offer so far is "make sure you donate your dollar directly to the charity concerned" but what happens when the charity is the problem? 

8. When looking at the ramifications of this bill don't forget to look at the Review of the Financial Reporting Act 1993 discussion document. I hope somebody will comment in depth on this. For the operators of this site it does mean we will have to find a "nice friendly auditor" (tier 3), the style that does the Tiddly Winks Association books (my apologies) and the Trust for whom I work will continue to pay a well known, internationally respected auditor (for reasons of "public acceptance") which will mean tier 1.

Click here for a really good discussion paper. From the Institute of Chartered Accountants.

9. One of the "statute" achievements of the bill will be to move the basis of granting tax exemption from objectives to activities. Theoretically, if a charitable trust, in the past, has had a change of direction from its trust deeds aim of helping poor children to helping rich adults its Trustees have been in breach of the Trust imposed upon them and there has been power to deregister the Trust. So, despite all our protestations , mine included, that there is no legislation to cover the activities of charities in NZ, what we mean in actual fact is that nothing is done (and yes, I have applied to have a trust deregistered, and no, nothing happened, it's still operating - see and read some current Otago daily papers ). Look at Section 57 of the Act. What is the yardstick to be applied?

10. Let's look at Section 46 of the Act, a fine not exceeding $30,000. The Commerce Commission has a far larger budget than this commission will have and yet, even after achieving record fines for breaches, has virtually had to give up on prosecuting pro-forma invoicing magazine publishers  masquerading as promoting road safety, or child safety because the costs involved are huge. For details click here. Surely a minimum $30,000 for a first time offence, but then mandatory doubling each time AND with the fine going to the Charities Commission.

After all of this I hope you have not got the impression I am against the Bill. I am not, I wholeheartedly support the bill, I am disappointed that it only has baby teeth, but I will continue to nurture it through its childhood and teenage years to maturity.