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 
[Volume:625;Page:19950] 
GORDON COPELAND (United Future) 
: 
 My involvement with this matter goes all the way back to 17 December 1987 when in a now somewhat infamous line-up in the Beehive Roger Douglas announced to the nation his proposal for a flat tax. He then went on to say that would mean charities would henceforth be paying taxation. Many twists and turns have occurred in the saga in the more than 17 intervening years that have brought us up to this day. 
This is the second attempt by a Labour Government to establish a Charities Commission. I opposed the first attempt in 1989 but then tried with successive Ministers of Finance for the next 10 years to get the Government to allow greater tax rebates for gifts made to charities from the maximum level of just $500 resulting from a total gift of up to $1500 per year. That was the rate that existed through that whole decade. In fact it was not until Dr Michael Cullen became the Minister of Finance in the year 2000 that that limit was adjusted for inflation from $500 to the current level of just $630 by way of tax rebate based on giving up to a maximum of $1819 per annum. That amount of $1819 is incredibly stingy when compared with the amounts allowed in other OECD jurisdictions. 
The USA has long allowed virtually unlimited tax deductibility for charitable gifts. This amongst other things sees the super-rich giving literally billions of dollars to charity in the case of people like Bill Gates and Ted Turner. It also means that the great universities like Harvard and Yale have enormous endowments whilst charities that work to alleviate poverty and addictions and do other good works flourish to the benefit of all. 
The United Kingdom under a Labour Government has adopted similar policies because it recognises in this most tangible and motivational of ways the importance of encouraging both philanthropy and generosity amongst the citizens of their countries. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Would the member relate the issue to the bill please. 
GORDON COPELAND 
: Members should remember it is more blessed to give than to receive. The good that charities do in our community is very significant. Indeed I go further in saying that charities are the most efficient organisations known to humankind. It is estimated that $1 of social services delivered through a charity would cost $2 if delivered through a Government department. Encouraging charities to flourish therefore is just common sense. 
New Zealand charities have high hopes for this bill. Their hope is that once the commission to register monitor and ensure that charities prosper is established—a task that we are likely to see completed very soon—the tax rebate will be lifted substantially and significantly in the 19 May Budget this year. In that regard I hope they will not be disappointed. 
It is true that this bill will mean that charities face new and additional compliance costs. There is no getting around that reality. This bill is therefore somewhat reluctantly accepted by charities as being necessary in order to bring about the benefit of a higher tax rebate for gifts given to charity. I am pleased to record that the Minister of Finance Dr Cullen is already in the public record as saying that once the Charities Commission is established by this bill which will be passed into law hopefully this evening he will be giving consideration to a significant increase in the rebate level for charitable gifts. 
I am also bolstered in my hope for this bill and its outcomes by the experience of both the United Kingdom and the USA. The United Kingdom has for many years had a Charities Commission. In recent years again under the current UK administration and Chancellor Gordon Brown the ethos of that commission has been changed quite significantly so that now its role is to ensure that philanthropy charity and generosity flourish in the UK for the reasons that I have mentioned. As a result charitable activity and charities themselves are now flourishing once again in the UK to a greater extent than they have for many many years. 
A similar situation exists in the USA. The USA does not have a Charities Commission but it is necessary in order to have tax-free status for a charity to complete an annual return to the Inland Revenue Service. This is quite voluminous and imposes compliance costs on charities in that nation that are far greater than will result from this bill. Not unnaturally when the Internal Revenue Service provisions were introduced by legislation in the United States charities strongly opposed them. But they now say quite openly that they were wrong. That is as a result of the increase in public confidence that has flowed from the fact that people know that they are dealing not with cowboy charities but with genuine bona fide charities. Charitable giving in fact has grown in the United States by several billion dollars. So that gives me the confidence and the hope that we will see a similar result in New Zealand. 
This bill therefore for me is just—if one likes—the first step in an ongoing process. I hope that it will lead to charity philanthropy generosity and that the good works our many many thousands of charities undertake often unsung on a day by day basis in this country will flourish and grow in the years ahead. If they do then all sectors of society including the Crown accounts themselves will greatly benefit and we will see far greater social services and good strong robust social outcomes for the citizens of this country. 
With those remarks I signal that United Future will support this bill both in its second reading and through all remaining stages.