Copeland Gordon: Charities Bill — Second Reading Instruction to Committee In Committee Third Reading 
Copeland Gordon: Charities Bill — Second Reading Instruction to Committee In Committee Third Reading 
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GORDON COPELAND (United Future) 
: 
 I am pleased that the Charities Bill will receive its third reading this evening and become the law of the land. Let me say just for the record that the Social Services Committee which I was on—it sounds like it was a different one from the one Sue Bradford or Judith Collins was on—actually heard 743 submissions from organisations that collectively would have represented thousands of New Zealand charities and virtually all of those submissions said that they felt the time had arrived for the establishment of a charities commission. So the concept of a charities commission has the overwhelming support of the charitable sector. 
I thought that in this third reading debate it would be worth just pausing for a moment to think about the wonderful benefit that not only our nation but the world derives from charities and I want to refer to the tsunami in east Asia which has occurred since the first reading of this bill. It is almost inconceivable to think of how the world would have responded to that disaster without the assistance of charities. We think immediately of organisations such as the New Zealand Red Cross Society Unicef World Vision Christian World Service Caritas Aotearoa - New Zealand and The Evangelical Alliance Relief Fund or “Tear Fund” for short. 
Here were charities that within hours of that disaster were responding not only by asking Kiwis to help—and Kiwis are very very generous—but also by getting people on the ground to deliver goods and services medical care comfort and so on to the hundreds of thousands of people whose lives will never be the same again after that enormous event. 
Kiwis are generous people. There would be many people who in response to that tragic disaster would have given over and beyond their regular giving to charities yet under the present law they get a measly tax rebate on doing so of just $630 per annum and that needs to change. Governments should encourage greater giving through higher rebate levels. We need to remember that for each extra 33c given up by the Government the charity receives an extra $1. If for example the Government gives up $20 million it will be because Kiwis have given of their own free will an extra $60 million to charities. 
The fact is that such giving is an efficient and effective investment in the social development of those countries that are its recipients. If given to developing countries it has the potential to transform the lives of others particularly in those countries that are desperately poor. I have only to mention for example the Fred Hollows Foundation or mercy ships and immediately images come to mind of the medical miracles that result for people who were blind or near blind who can see again and the deformed and crippled children often outcast by society whose lives are transformed with life-changing and lifelong positive consequences. 
Again I ask the Government to take note. It now has the Charities Commission; it is up to it now to improve the tax rebates and concessions that it gives to encourage Kiwis in their natural propensity towards generosity. 
Charities are also looking for the refundability of imputation credits. On introduction the original purpose of imputation credits was that the final tax paid would be equal to the marginal tax rate of the recipient shareholder. Well the marginal tax rate of those charities that have shares in New Zealand companies is zero. So why do they pay 33c in the dollar as a final and non-recoverable tax because they cannot claim back their imputation credits? It is wrong and it is blatantly unfair especially when non-resident companies—that is commercial organisations not charities—can now get an imputation tax refund. 
Additionally so long as charities can receive interest income without tax deduction—and there is no suggestion that that would change in any way as is right and proper—they should also of course not be paying imputation tax on company dividends at 33c in the dollar because that fundamentally distorts investment patterns by charities so that decisions become tax-driven rather than market-driven something that directly contradicts not only common sense but the policy advice given to the Government by Treasury. Charities will also want to see that fixed in this year’s Budget. 
In conclusion the passage of this bill is a landmark in the evolution of the New Zealand charitable sector. It is a sector that has served this country well since the foundation of our nation. My hope is that it will continue to flourish in the years ahead that there will be an increasing appreciation by New Zealanders of the valuable work that it does and that the Government will do its bit to encourage that to happen.