Mooney JosephJOSEPH MOONEY (National—Southland): I rise to support the Incorporated Societies Bill in its first reading. As a number of speakers tonight have said the Incorporated Societies Act is more than 100 years old and it's silent on many important areas of governance. It no longer gives the right level of direction for governing and administrating a society in today's conditions.The proposed changes set out in this Incorporated Societies Bill will help ensure New Zealanders can better run their societies and give them greater certainty in the processes to use. It also sets out a framework for dealing with disputes and grievances which the current Act does not do. Given the important role that incorporated societies play in New Zealand it's important that we ensure the rules governing them are fit for purpose in today's conditions are sensible straightforward and easy to comply with. In the spirit of bipartisanship I think it's quite sensible that the Government has seen fit to carry on the work the previous National Government did in developing and releasing the first draft of this legislation for consultation and I look forward to seeing the progress of this bill through the House.The Minister in his opening remarks referred to a number of incorporated societies and they were all good and worthy of mention but one in particular that caught my ear was the Gore Country Music Club Incorporated which incorporated back in 1972. I just have to mention the importance of that as an illustration of the value that incorporated societies give to our communities. The Gore Country Music Club has had a core role in developing the New Zealand Gold Guitar Awards which has been going for 46 years. We've got the Tussock Country Music Festival coming up on 29 May to 6 June. I'd recommend everyone go to it. It's quite an epic.In developing those connections that incorporated societies do I just note that because of the Gold Guitar Awards in country music Tamworth in New South Wales Australia and Gore formed a sister city relationship back in 1992 and that's continued to flourish over the years. The Tamworth mayor the sister city chairman and Tourism Tamworth regularly attend the festival and the Mayor of Gore regularly attends the Tamworth music festival which is usually in January I understand. Hopefully with the trans-Tasman bubble we might be able to see them back in Gore for the music festival this May and June.Look just moving on from that there's three good reasons I'd say that this proposed legislation addresses. Firstly the rules and regulations surrounding incorporated societies should be up to date and applicable to 2021 and not 1908. As a number of other speakers have mentioned today the 1908 Act requires fines to be paid in shillings. This bill will put into place a framework that's suitable for our modern conditions.Secondly a modern law is necessary to give guidance to New Zealanders who volunteer to run not-for-profit organisations. Given the role they play in New Zealand it's important we ensure that rules governing them are fit for purpose straightforward and easy for them to comply with.Thirdly this piece of law has a good background in multi-party support over a long period of time and with genuine community consultation. Through submissions and consultation with stakeholders the Ministry of Business Innovation and Employment has noted significant support from the voluntary sector for reforms of this nature and because the proposed reforms are extensive and the structure of the 1908 Act doesn't provide a strong base it's best to start afresh.So this Incorporated Societies Bill will bring the existing statutory regime into the modern age. The New Zealand Institute of Directors welcomed the introduction of the bill noting that The Bill overhauls governance structures and arrangements for societies. Governance duties are set out in one place for the first time helping to provide certainty for those leading societies. There are also new conflict of interest rules which are essential for boards." Committee members and officers of incorporated societies have duties similar to those of a director under the Companies Act 1993. However those duties have been developed through case law not the 1908 Act. This rule will provide people elected into governance roles a clear understanding of what they have to do with the law and that's very useful.Anecdotally I understand that auditors have experienced instances where organisations have been adversely impacted due to poor governance not aided—I would say—by the 1908 Act. Auditors have also seen instances where incorporated societies have got into serious financial difficulties or even been subject to financial mismanagement or even fraud due to a lack of appropriate accounting disciplines.There are no cases where it is acceptable for an officer of an incorporated society to place a personal financial interest ahead of the interests of the society without first disclosing the conflict. Therefore leaving it up to individual societies to make their own conflict of interest rules is negligent compared to the option of including it in a statutory regime and that is why we need this legislation.The proposed legislation also gives clearer guidance to New Zealanders who take time out of their lives to run not-for-profit organisations which is such a core part of the fabric of this country. The more than 24000 incorporated societies in New Zealand are an essential part of our social fabric. They provide a range of valuable services at both a community and national level including sport culture education health and animal protection.The Law Commission noted in a report which led to this legislation that "The largely voluntary space in which incorporated societies operate is an important part of New Zealand society and of the economy. Uncertainties and difficulties in the current incorporated society regime not only create significant problems for particular incorporated societies but also create uncertainty and difficulty for the sector as a whole. … Much of the law of incorporated societies [is currently found] not … in the statute … but in the case law … Case law is not particularly accessible or useful for most Incorporated Societies because in general the people that run societies: (a) may not have the funds to take legal advice about what case law exists; (b) [may] have limited legal training; [and] (c) if able to obtain legal advice may find it difficult to determine what the case law may mean for the society and its application to resolving a current [dispute] in a cost-effective manner."Given the vital role that the societies play in New Zealand it is important we ensure the rules governing them are fit for purpose sensible straightforward and easy to comply with. This is a good start for a piece of law that has been developed over a period of time and with genuine community consultation and largely this bill has been well-thought-out. It will strengthen the governance organisations that hold together our community and it modernises and clarifies law governing incorporated societies. So I'm happy to commend this bill to the House in its first reading."