Charities Bill — First Reading 
Charities Bill — First Reading 
[Volume:616;Page:12121] 
Tuesday 30 March 2004 
( 
continued on Wednesday 31 March 2004 
) 
Charities Bill 
First Reading 
Debate resumed. 
GORDON COPELAND (United Future) 
: 
 I believe that these measures will greatly benefit the sector. Firstly they will enable Government to look to a more generous regime in respect of tax rates for donations and imputation credits. Secondly they will increase public confidence in the bona fides of individual organisations. For example charities involved in street collections and similar will do so on the basis that their registered number is prominently displayed. That together with tax breaks will motivate New Zealanders to be more generous in the support they give to charities. 
Charities are the most efficient organisations on the face of the planet. Typically they involve highly motivated people at both board and operational level many of whom work for sacrificial salaries. They have an ethos that puts the needs of human beings at the centre of all they do. They can deal with sensitive issues such as hunger poverty and family breakdown in a compassionate and caring way which is impossible in the culture of a Government bureaucracy—and they do it far more cheaply. I think all of us would quickly decide that we would rather deal with the Salvation Army the Red Cross or the Society of St Vincent de Paul than with the Ministry of Social Development or the Department of Child Youth and Family Services. Research indicates that $1 of social service delivered through a charity would cost the Government as much as $2 were it to be delivered even assuming that a similar level of quality could be attained through a bureaucracy. 
The establishment of a Charities Commission will herald a new and exciting day for the charitable sector. When the commission has been established United Future will seek a substantial and significant increase in the level of tax rebates for donations given to charities by either individuals or corporations. That would bring New Zealand more into line with comparable generous regimes in the USA the UK and elsewhere. 
I shall give an illustration of that. A couple of years ago an expatriate Kiwi living in New York made a donation of $1 million to the Victoria University Foundation. He was able to deduct the entire amount of that gift—$1 million—from his US tax liabilities. Had he made that donation from New Zealand his rebate on that $1 million would have been only $1890. That illustrates the enormous gap between New Zealand and other countries. 
That step would boost the income of charities by at least $60 million per annum but would cost the Government just $20 million and it would encourage an enormous boost in the nation’s social services. 
Dr WAYNE MAPP (National—North Shore) 
: 
 By way of interjection I asked the previous speaker Mr Gordon Copeland a member of United Future which supports the Government on confidence whether his party’s objective of an increased deduction or tax credit would be achieved in the Budget this year. He studiously ignored that question which makes me wonder whether United Future has any knowledge whatsoever about the Government’s programme in the Budget. Does it have anything other than a vain and pious hope that that could actually be achieved or is the Government treating it in a cavalier fashion? Who needs to take United Future into account would be the Government’s attitude. 
Mr SPEAKER 
: The member will come back to the bill. 
Dr WAYNE MAPP 
: We in the National Party are opposed to this bill. The reason we are opposed is that we are asking a basic question that apparently is not being asked by the Government itself and it is this: what mischief is this bill designed to cure? Is there large-scale fraudulent activity by charities that this bill would otherwise cure by its egregious and excessive regulatory procedures? Exactly what will the Charities Commission be doing that is not already being done by the Commissioner of Inland Revenue? We see this legislation as fundamentally spurious. This Government has an obsession to create by excessive regulation new institutions and new compliance costs so that it looks busy. 
Apparently a speaker for the New Zealand First Party said that this was something it had been seeking for years but I do not recall anything in New Zealand First’s past statements that show this to be a deep and pressing concern on its part. Again I ask what mischief does this legislation seek to cure? The reality is that there is no mischief. This legislation is simply not necessary. If there were substantial scandal in the charity sector I would have expected the Minister in charge of this bill or Government speakers—of which there have been precious few—to state the reasons and set out in detail that this has to be done because of those particular defaults. There is nothing whatsoever of that—just a recitation of the provisions of the bill itself. 
I want to turn to some of those provisions. One of the roles of the Charities Commission will be to give effect to Government policy. That is specifically stated in the legislation and is noted specifically in the explanatory note. That is presumably an important point. The role of the commission is then to deal with proposed Government policies. It makes one wonder what the intent could be. We have a bill that ostensibly is about registration and not changing the definition of charities—and I note that the legislation has included the traditional definition that as previous speakers have noted goes back hundreds of years to the 16th century. But this Government also has a record in the past of floating papers in which it wished to change precisely that definition—the definition of the bill for Mr Mallard’s edification—and the reality is that the Government intends expanding its tax take from charities. 
People might ask what on earth that means. It means attacking companies like Sanitarium and the business operations of charities which of course are undertaken to increase their wealth and cash-flow basis so that they can undertake their charitable purpose. That was the intention of the Government back in 2000. Now 3 years later it seeks to promote a bill that whilst that is not contained within it then makes reference to Government policies and proposed Government policies. I have to ask what the true motivation of this bill is. I simply do not believe that it is merely a matter of registration which of itself is unnecessary. The Government has not provided any basis of its need other than the fact that it will take place so one has to wonder whether there is not a more serious issue. 
Mr Jones spoke last night about a registration system in Britain. Whilst he proudly proclaimed the British system he failed to point out whether there were any failings in our current system. The reality is that he did not. As is perhaps the wont of New Zealand First he seemed to just like the legislation because it was legislation. One would have to say that New Zealand First has never been particularly rigorous when it comes to dealing with compliance costs. That party comes from an old-fashioned perspective of New Zealand’s economy. They think that what the Government does is always a good thing. They applaud big government and indeed they acknowledge that. 
I want to refer to one point of merit in the bill and that is the reference to the terrorist provisions—that a charity that has been deemed to be a terrorist entity under the terrorism and counter-terrorism legislation cannot be registered as a charity. I imagine that is a belt-and-braces exercise because clearly any entity categorised as a terrorist organisation would have its members prosecuted and its activities proscribed in any event. So putting that in the Charities Bill is of itself not a sufficient justification for the bill. 
We come back to the opening question: what actually is the mischief here? No Government member sought to describe it. They simply sought to describe the provisions of the bill but not the underlying purpose of it. Therefore the National Opposition sees no point and no merit in this bill. 
A party vote was called for on the question  
That the Charities Bill be now read a first time 
. 
Ayes 84 
New Zealand Labour 52; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 8; Independent: Awatere Huata. 
Bill read a first time and referred to the Social Services Committee.