Fair Trading (Soliciting on Behalf of Charities) Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Fair Trading (Soliciting on Behalf of Charities) Amendment Bill — Third Reading 
[Sitting date: 13 June 2012. Volume:680;Page:2972. Text is incorporated into the Bound Volume.] 
Fair Trading (Soliciting on Behalf of Charities) Amendment Bill 
Third Reading 
MICHAEL WOODHOUSE (National) 
: 
 I move  
That the Fair Trading (Soliciting on Behalf of Charities) Amendment Bill be now read a third time 
. This bill had its genesis as long ago as December 2009 when it was introduced at the first reading by my friend and colleague the Hon Amy Adams. Due to her ministerial promotion she has not been able to proceed this legislation to its conclusion. So I want to acknowledge and thank her for her foresight in bringing the bill to the House and in entrusting me with the role of completing the work she started. 
Although the bill has undergone something of an overhaul in respect of its structure and wording its fundamental purpose remains the same—that is to provide increased transparency and public accountability for professional third-party collectors who are in the business of collecting funds on behalf of registered charities. At least $2.5 billion a year is donated by New Zealanders to registered charities. It is not only money that New Zealanders commit; we commit time and effort to our communities through sports clubs Rotary Clubs and Lions clubs local church groups and advocacy groups. But when that commitment is financial there is a reasonable expectation that the funds donated reach their intended destination. There is definitely a cost to raising funds but a trend has emerged where fund-raising organisations are used by charities to assist with the collection process. Indeed because of that trend those donating money do have a right to be given accurate information about the proportion of those funds that are retained by those groups. 
I want to restate my thanks to those who made submissions to the Commerce Committee in the last Parliament and also to officials from the Ministry of Consumer Affairs for their advice particularly with the reframing of the legislation to provide a more effective means of delivering the policy intent.  
I want to touch on a couple of the comments made in the Committee of the whole House—in particular comments by the Opposition that although the bill does not do any harm it does not do anything and even more cruelly comments by Mr Parker who described it as a worthless waste of money. I find that somewhat ironic given the undignified manner with which his party approached members’ days last year. I think he should reflect on his party’s contribution to the worthless waste of money on members’ days that occurred in 2011. 
I am actually more compelled by his former colleague Carol Beaumont’s comments at the first reading when she said that it was a good bill and that it addresses an area of concern for the public which is why Labour is supporting it. There is a good reason for that support. The public’s perception of and confidence in the likelihood that the money solicited on behalf of charities actually gets to those charities are reducing. In its briefing to the committee the ministry reported that Consumer New Zealand informed it that the cost of third-party collectors for charities is a common complaint and an online poll taken around that time in 2010 showed that 95 percent of respondents wanted greater transparency of the cost of third parties. 
The Charities Commission also reported regularly receiving complaints relating to third parties and noted a rising awareness in the media of the use of third-party contractors. Its 2010 trust and confidence survey indicated reducing levels of trust and confidence in charities and reduced confidence that a reasonable proportion of donations get to their end cause. In summary although confidence in our charitable sector remains high it is dropping. The rise in prominence of third-party collectors is co-related with—and in my view at least in part causing—that loss of confidence. Examples of perceived unethical practice by collectors include charities receiving less than a quarter of the donations raised by telemarketers. Examples have also been reported where long-term planned giving arrangements see the first year or more of contributions withheld by the fund-raising organisation before the charity sees the money coming through. 
I sense that those involved in the fund-raising area including members of the Fundraising Institute of New Zealand who submitted on the bill have an honest belief that firstly the amount of money withheld by them in commissions is appropriate and secondly there is a risk that members of the public misunderstand or may be overly swayed against giving by the transparency that this legislation when passed could provide. I respectfully disagree with that view. I sense that the submitters—the institute and the other submitters—against this bill are concerned that their commissions when revealed might be misconstrued and that people could be dissuaded from giving. But I have more confidence in New Zealanders to understand the context of arrangements of this nature and to give generously notwithstanding that transparency. However I do accept that it may result in movements of donations away from organisations where such transparency reveals the worst excesses of commission collecting or possibly it may have a moderating effect on those organisations. That is one purpose of the bill. So I would applaud that development were it to occur—hardly a law that does not do harm but does nothing and certainly not a worthless waste of time. 
The Fundraising Institute also suggested that the best way forward is self-regulation. I am quite fond of self-regulation in most circumstances but I do note that in the 3 years since the bill was entered into the ballot I am not aware of any attempts at self-regulation in order to prevent the need for this legislation being put in place. In any event it was also noted to the committee by those who did engage in excessive commission-collecting—known by some as charity muggers or “chuggers”—that they were not actually members of organisations that would make them subject to voluntary regulation. 
The bill in its final form will provide for regulation-making powers for the Minister of Consumer Affairs. Concern has been expressed that this will not occur or that the environment will be too complex for the regulation-making powers to be effective. The Minister of Consumer Affairs the Hon Simon Bridges advises me that he is prepared to draft regulation in a timely manner and to consult with affected parties as is required by the bill. The House can be sure that both I and the Hon Amy Adams will be diligent in ensuring that our colleague delivers on that commitment. 
I trust the generosity of New Zealanders and I trust their ability to discern fairly the information provided on an appropriate commission or sum withheld. I have no doubt that their enthusiasm for charitable giving will remain high. I commend this bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am pleased to be standing in support of the final reading of the Fair Trading (Soliciting on Behalf of Charities) Amendment Bill. I want to traverse a little bit the history of why we are debating this bill separate from the review of the whole area of fair trading that is being undertaken at the moment. I think that legislation is in front of the Commerce Committee at the moment. Jonathan Young is helping me out from the other side of the House and nodding his head. As I am no longer on the Commerce Committee I do not necessarily keep myself up to date with all of the particular goings-on in that committee.  
I think it is a shame that the bill is separate from that legislation because the legislative framework that is now in front of the select committee is actually I think far more integrated than dealing with things on a piecemeal basis would ever allow. I think it would have been better to be able to include this bill with it. However we were persuaded and we agreed as a select committee—and I chaired that committee at the time—at the request of Amy Adams the sponsor of the bill at that time to allow this bill to proceed because it had raised a significant amount of concern within the community. Certainly that was reflected in the submissions that we received but the submissions were not unanimous in the views that they expressed. We did not receive from all of the charities universal support for the approach that the bill was adopting.  
I think people were relatively comfortable with going down a regulation-making pathway that has all of the consultative requirements as the previous speaker Michael Woodhouse has just explained to the House but they were a little bit concerned about the message that might be sent about certain approaches that were adopted by professional fund-raising organisations fund-raising—totally transparently—on behalf of charitable organisations but expecting a professional share of that for the professional services they were providing. I think one of the clearest examples we had of that was the organisation Greenpeace where people could in fact be contributing for up to a year before the professional fund-raising arm of the organisational aspects had been fully recompensed and then as far as Greenpeace was concerned it had a member for life. It was that ongoing gift of the lifetime contribution to the organisation that actually made the initial contribution worthwhile. It did not want to see anything passed through Parliament that actually prevented it from having professional fund-raisers being able to operate in that way. I see that the member is shaking his head and I know that the legislation is crafted in a way— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I am sorry to interrupt the honourable member. The time has come for me to leave the Chair. 
Debate interrupted.