Wilson Margaret: Charities Bill — First Reading 
Wilson Margaret: Charities Bill — First Reading 
[Volume:616;Page:12108] 
Hon MARGARET WILSON (Minister of Commerce) 
: 
 I move  
That the Charities Bill be now read a first time. 
 At the appropriate time I propose to move that the bill be referred to the Social Services Committee for its consideration. 
The Government both recognises and highly values the significant contribution the voluntary and charitable sector makes to New Zealand society. Since June 2000 when my colleague the Hon Steve Maharey the first Minister for the Community and Voluntary Sector publicly acknowledged the importance of community voluntary iwi and other Maori organisations to the health of our country the Government has been working to improve its relationship with the sector. Following on from the Hon Steve Maharey’s acknowledgment came the signing of a statement of Government intentions for an improved community-Government relationship in December 2001. The report of the Community-Government Relationship Steering Group was published 8 months later. Last year saw the Office of the Community and Voluntary Sector established. The Government’s commitment to improving its relationship with and strengthening its support to the community and voluntary sector is ongoing and the tabling of the Charities Bill in the House today is further evidence of that commitment. 
This bill provides for the establishment of a new Crown entity the Charities Commission. The commission’s primary function will be to administer a registration and monitoring system for charitable organisations and approved donees. The commission will also be responsible for educating and assisting registered charitable organisations approved donees and other people to comply with their regulatory obligations and duties. Also the commission will consider report on and make recommendations on any matters relating to charities will stimulate and promote research into any matter relating to charities and will carry out any other functions the Minister may direct it to perform. 
Creating a registration system will help to foster a culture of philanthropy and giving in this country by increasing the public’s trust and confidence in charitable organisations. The bill provides that all organisations wanting to register will need to supply details of their activities and purposes. The commission will then assess those details against the requirements of the charitable purposes test which are the advancement of education and religion the relief of poverty and any other purpose beneficial to the community. All registered charitable organisations will be issued with a unique registration number. That number will need to be displayed on any materials used when money is being collected from the public so that people who make donations can be assured of the organisation’s charitable purpose and financial solidity. 
Registration with the commission may be voluntary but only those organisations that choose to become registered can continue to access tax exemptions or be classified as approved donees. Registered organisations will have to file an annual return showing that they are undertaking charitable activities. In addition they will have to provide the commission with basic financial data when completing their annual returns. That will also help to increase the sector’s transparency and accountability to the donating public and to those to whom it provides assistance. All information filed with the commission will be publicly available and accessible on the commission’s website. That will increase transparency and promote good governance. The Government hopes that it will in turn encourage more people to support charitable organisations. The ongoing monitoring provided for in the bill will mean we can make sure that tax exemptions are being appropriately used by the organisations entitled to them. 
The registration and monitoring system will also provide more information about the charitable sector. Currently there is no general collection of information about the activities or funding sources of charities. For example one of the main forms of assistance available to the charitable sector is the exemption from paying income tax. However the exact extent of that assistance is unknown. The information collected by the commission will provide a better indication of the size and scope of that support in the charitable sector. It will place us in a much better position to assess whether assistance to the sector is as well targeted as it could be or whether it should be improved and if so how. 
The establishment of the Charities Commission will also help to bring New Zealand into line with other Commonwealth countries where registration and reporting regimes for charities are commonplace. It is also the first step towards instigating measures to satisfy New Zealand’s international obligations under the Financial Action Task Force’s Eight Special Recommendations relating to the financing of terrorist organisations through not-for-profit entities. 
As I mentioned earlier the commission will be a new Crown entity. The board will be made up of five to seven members. The responsible Minister will appoint the board members in consultation with the Minister of Revenue and the Minister for the Community and Voluntary Sector. We will be actively calling for expressions of interest from people wanting to be commissioners on the inaugural board. That will be carried out by contacting key groups in the sector as well as by advertising in the media. As a Crown agent the Charities Commission will be required to give effect to Government policy. However it will be fully independent when using its statutory powers—for example when making a decision on whether to register a charity. The Inland Revenue Department will continue to have an audit function and to have the authority to deny a tax exemption to a registered charity if it is not satisfied that the purposes of the organisation are charitable. 
I intend to move that the Social Services Committee consider the Charities Bill.