Copeland Gordon: Charities Bill — First Reading 
Copeland Gordon: Charities Bill — First Reading 
[Volume:616;Page:12117] 
GORDON COPELAND (United Future) 
: 
 I am really delighted tonight to be able to rise to take a call on behalf of United Future on the first reading of this bill. I say that because I have now been involved in this issue for more than 16 years. My involvement began in December 1987 when on a now rather infamous occasion Roger Douglas and others lined up in the Beehive and amongst other things announced their intention to place a tax on charity. Charity is an old-fashioned word. It means love of one’s fellow human beings. So for whatever reason—a reason that I subsequently was never able to really get to the bottom of—the Hon Roger Douglas suddenly decided that it was a good idea to put a tax on love. 
I might say that the response from the charitable sector was one of immediate and absolute fury. Five hundred years of division within the Christian churches for example was quickly swept aside and an inter-church working-party on taxation representing all the churches in New Zealand was formed in short order. Two thousand years of division was put aside when the Jewish congregations then joined in. The group extended to all the voluntary welfare organisations in the country all the major charities and eventually to all the sporting clubs as well until there were so many people involved from so many sectors that when we went to visit Roger Douglas it was impossible to get all the people into his office. That is how I began to get involved in this issue. 
The Government had to back down basically in the end. It had to as David Lange famously said at the time give New Zealanders a bit of a break so we could all go away and have a nice cup of tea. In the process of doing that the Government decided it would like to kick this matter into touch and in 1988 it appointed the Spencer Russell working-party which reported in 1989. It recommended to the Government of the day that a commission for charities be established. That initiative did not proceed following the change of Government in 1990. During the years since 1990 until I guess about 2001 I trekked across to Parliament on many occasions and spoke to all the successive Ministers of Revenue. I was seeking greater assistance for the charitable sector in terms of better tax rebates for individuals and companies gifting funds to charities and in more recent years accessibility by charities to imputation credits attaching to dividends received from New Zealand companies. However all those submissions essentially fell on deaf ears. Successive Ministers of Revenue from both the Labour Party and the National Party made agreeable noises but continually verbalised their unease about more generous donation rebates because of anecdotal evidence that “some charities were involved in tax avoidance arrangements.” 
However undaunted we continued to trek across to the Beehive following the changes of Minister as they occurred over those years and in 2000 we made our concerns known to Dr Michael Cullen. Those meetings were refreshing because they resulted in some positive go-forward. Essentially Dr Cullen expressed a willingness to look at a more generous donations regime the question of imputation credits and a number of other issues provided a means could be found to ensure that those benefits extended only for bona fide charities. In other words he sought an assurance concerning the protection of the Government’s revenue base. 
A Government discussion document on tax and charities followed in short order and more than 1700 submissions were received from affected organisations and charities from the length and breadth of this country. That in turn persuaded the Government to set up a working-party to look at the establishment of a registration annual return and monitoring system in relation to all New Zealand charities. In early 2002 prior to being elected to Parliament I was part of that working-party. By now all in this House are probably aware that the working-party recommended the establishment of a Charities Commission which would have responsibility for the establishment and maintenance of a registration reporting and monitoring regime for New Zealand charities. The Government accepted those recommendations and has been working since through an establishment group to set up the commission. 
This bill is therefore the climax as it were of a 16-year attempt by the charitable sector in New Zealand to bring about a fundamental change in its status within New Zealand society. United Future of course now supports the first reading of this bill and its referral to a select committee. I encourage all charities to take the opportunity to make submissions during the select committee process with a view to finalising the law so that the commission can commence its operations as soon as possible. I think the target date is 1 October 2004. 
All of this in my view represents a major step forward for the charities of New Zealand. The commission is designed to become a one-stop shop and will adopt a whole-of-Government approach to bring together the interface between the charitable sector and the Government something that currently involves much contact with the Inland Revenue Department and a number of other Government departments and agencies. I can speak for many many charities when I say that their contact with the Inland Revenue Department in trying to get their charitable status established has been completely unsatisfactory. At the moment it can take 18 months to 2 years and the most inane exchange of correspondence one can imagine to get that done. All of that will disappear once this commission is established. 
Primarily the commission will be there to assist charities in their establishment their ongoing operations and where necessary their disestablishment. Eventually however tax-free status will be reserved for registered charities only. I want to clarify a situation that was mentioned by Sue Bradford and that is to do with the definition of charities. This bill will in no way alter the current definition of charities. That will continue to be defined by the courts. 
Debate interrupted. 
Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)