Auckland Regional Amenities Funding Amendment Bill

I move, That the Auckland Regional Amenities Funding Amendment Bill be now read a first time. I nominate the Governance and Administration Committee to consider the bill.

I would like to start by acknowledging the Auckland Regional Amenities Funding Board, with a special acknowledgment to David Houldsworth, the acting chair of the Auckland Regional Amenities Funding Board, for his leadership in bringing up this issue and the work that they have done to have the bill come before Parliament. Mr David Houldsworth also served as the chief executive of one of the amenities, the Stardome Observatory and Planetarium, which is situated on Manukau Road in the Mt Roskill electorate. For me, it’s a great pleasure to be the sponsor of this bill. I agree and I really hope that all sides will agree with the Auckland Regional Amenities Funding Board that it’s important we align the two pieces of legislation that affect all the nine amenities in the Auckland region.

The Auckland Regional Amenities Funding Act 2008 and the Charities Act 2005—this is specifically in relation to the requirement for preparation of financial statements by specified amenities under the Auckland Regional Amenities Funding Act 2008. The Auckland Regional Amenities Funding Board was established with the introduction of the Auckland Regional Amenities Funding Act 2008. On a day-to-day basis, the funding board is not responsible for the governance of any of the entities. The sole purpose of the funding board is to administer the provisions of the Auckland Regional Amenities Funding Act, which primarily comprises determining the levy to be collected from Auckland Council and then distributing that as grants to the specified amenities.

The Auckland Regional Amenities Funding Board distributes grants to organisations that deliver arts, culture, recreational, heritage, rescue, and other facilities and services to the Auckland region. Each of the specified amenities retains its own board of governance and management and is responsible for the decisions made regarding the operations of the organisation. The amenities make significant contributions towards making Auckland an attractive global city.

Section 39 of the Auckland Regional Amenities Funding Act requires that the specified amenities prepare financial statements that contain a statement of financial position prepared in accordance with New Zealand International Financial Reporting Standards and that contain the other statements and information set out in section 39(2)(b). It’s important to note that the specified amenities are registered charitable entities under the Charities Act 2005. In 2015, section 42A of the Charities Act 2005 was amended to require that certain charitable entities, those whose total operating payments are $125,000 or more in each of the two preceding accounting periods, prepare financial statements in accordance with generally accepted accounting practice. The acronym used for this is GAAP, and from here on I’ll use this acronym.

At that point, the Auckland Regional Amenities Funding Act was not amended. So, as a consequence of that, the requirement under the Charities Act 2005 to prepare financial statements in accordance with GAAP is in addition to any other reporting requirement under any other enactment. Consequently, the specified amenities are currently required to prepare financial statements according to both New Zealand International Financial Reporting Standards and GAAP. The purpose of this bill is to fix this inconsistency by removing the requirement that is there for the specified amenities to prepare financial statements according to New Zealand International Financial Reporting Standards under the Auckland Regional Amenities Funding Act and to permit specified amenities to prepare a single set of financial statements that comply with GAAP. For consistency, this amendment will also amend section 40 of the Auckland Regional Amenities Funding Act to clarify that the funding board’s audited financial statements are prepared in accordance with GAAP. This is because section 40 of the Auckland Regional Amenities Funding Act does not specify the accounting standard to which financial statements by the Auckland Regional Amenities Funding Board established under section 6 of the Act should be prepared.

Clauses 4 and 5 in this amendment bill before the House, the Auckland Regional Amenities Funding Amendment Bill, will remove the current requirement under the Auckland Regional Amenities Funding Act for the specified amenities to prepare financial statements in accordance with New Zealand International Financial Reporting Standards, and instead will require the specified amenities’ financial statements to be prepared in accordance with GAAP.

The nine amenities are Stardome Observatory, situated in Royal Oak; Auckland Philharmonia Orchestra, situated on Queen Street in Auckland; Auckland Rescue Helicopter Trust in Mechanics Bay, Auckland; Auckland Theatre Company, situated in Mount Eden; Coastguard Northern Region, situated in Mechanics Bay; New Zealand Opera, situated in Parnell; Surf Life Saving Northern Region, situated in Mechanics Bay; Auckland Arts Festival, situated in Auckland central; and WaterSafe Auckland, also known as Drowning Prevention Auckland, in St Marys Bay. It’s important to note that all the amenities are charities and are therefore required to meet the requirements of the Charities Act too, and not to do so could lead to amenities losing their charitable status.

The New Zealand International Financial Reporting Standard is an older accounting standard, which is generally being phased out and being replaced by GAAP. The difference between the two accounting standards is probably not great, but sufficient that if the amenities are to comply with both standards, they would have to prepare two sets of annual audited accounts. This is an unnecessary burden and cost for the amenities. Currently, the amenities are technically in breach of the Auckland Regional Amenities Funding Act. However, Audit New Zealand, who audit the funding board and monitors compliance by the amenities with the Auckland Regional Amenities Funding Act, has agreed to waive this breach on the understanding that this proposed amendment bill is progressing. The objectives of this bill cannot be attained otherwise than by legislation, because the objects are to amend statutory requirements that are currently contained in the Auckland Regional Amenities Funding Act.

Finally, I want to again acknowledge David Houldsworth for his efforts and also for communicating with each electorate member of Parliament in the Auckland area about this bill, as this bill affects specified amenities that operate in the Auckland region, and I hope that all sides are supportive of this change to help the amenities board in their effort to fix this difference that is there in two pieces of legislation, which is creating an extra layer of work for them. It’s a simple fix but it means a lot because it will reduce their workload. So I highly recommend this bill to the House. Thank you.

The question is that the motion be agreed to. Those who are of that opinion will say Aye, to the contrary, No. The Ayes have it.

💬 Hon Alfred Ngaro: Are you still taking speeches, Mr Speaker?

Well, the member didn’t call.

💬 Hon Alfred Ngaro: Sorry, I was talking to the—

Well, the member didn’t call, you know.

💬 Hon Tim Macindoe: I raise a point of order, Mr Speaker. In the ordinary course of events, the next call was a Labour call. Dr Liz Craig stood to take the call. She didn’t call loudly, but I think she did call.

I’m going to ask the member, very quickly: did she call?

💬 Dr Liz Craig: I called quietly, but you didn’t hear me.

Right. Even with my hearing aids, I did not hear the member. I have called a result and, therefore, we can only go backwards by way of—

💬 Dr Liz Craig: I raise a point of order, Mr Speaker. I didn’t complete my call when you spoke.

Sorry?

💬 Dr Liz Craig: I didn’t complete my call when you spoke, so I may not have completed the call at the point you spoke.

Well, I did look and, I thought, waited for a call. I have put the question. The only way now to get us out of this pickle—and I do want to say to the member she’s now been here for two years; she should know to call quickly and loudly, and if members on the other side are not happy, they need to call out too, not just stand up. I think the only way of getting out of this pickle is for me to seek the leave of the House to go back a step, and I want to say to members that I would very much appreciate it if leave was granted. So the question before the House is that we revert to the Auckland Regional Amenities Funding Amendment Bill at the point we were. Is there any objection to that? There appears to be none.

Thank you, Mr Speaker. I’m very happy to stand in support of this bill.

Thank you, Mr Speaker. I take not a long call, but I do want to take a call because the Auckland Regional Amenities Funding Amendment Bill has been advocated by these different amenities. Being an Auckland MP, I know a number of them who have sought the advocacy of Parliament to ensure that the burden that they currently face in regards to the financial reporting systems in place would be changed. They do realise that they are in breach. Hence the reasons why they have sought the will of the House to ensure that there would be a change in law to enable them to be able to do that.

Having previously been the Minister for the Community and Voluntary Sector, one of the challenges with these amenities, these current charities, and other charities around the country is the burden that is often reflected at times for reporting, both financially and in other forms of audit around accreditation. Hence the reasons why I believe that it’s important that this bill would be supported across the House as a bill that is critically important to that.

I’m not wanting to take too much longer, but I just want to put it on the record and acknowledge the Auckland Regional Amenities Board, and the role they play in particular. Other parts of the public may require to understand the funding responsibility that they have, and it’s really clear in their 10 years—this was established in 2008—that the board itself has a delegation where no more than 2 percent of the rates collected by the Auckland Council in the previous financial year are used, and it’s these funds that are often distributed out to those different organisations that are part of the role of the bill here before the House—to make that change.

So what they’re saying to us in regard to this bill is that the burden for them to have to hold both the role under the Auckland regional amenities legislation and then under their charities status as well becomes critically important for them. Hence the reason for the advocacy around this.

Finally, I want to acknowledge those organisations that have come to seek the support of this House: the Auckland Philharmonia Orchestra, New Zealand Opera, the Auckland Theatre Company, the Auckland Arts Festival, Stardome Observatory, and also there’s Coastguard and Surf Lifesaving Northern Region—and I have personally seen the services these clubs offer to the communities up in Auckland—and the Auckland Rescue Helicopter Trust, WaterSafe Auckland, and Drowning Prevention Auckland. I name them—

💬 SPEAKER: And it’s now getting repetitious.

Yes. In reflecting on this bill and the intent of the bill, which is to remove the burden that exists over there, I too want to commend this bill to the House. I want to thank those that have worked tirelessly towards this. I look forward to the committee stage as it progresses through the House and comes back to the Chamber.

As the member whose electorate spans most of Auckland, I do want to stand and support this bill progressing in the House, and I commend the member for the work that she’s done.

Thank you very much, Mr Speaker, for the opportunity to speak in this first reading. It’s fantastic to hear that there’ll be support across both sides of the House. I’m quite familiar with the Auckland regional amenities group, as a former councillor in Auckland, and the reporting of the nine amenities on an annual basis and some of the to and fro that exists in allocation of funding, as you might imagine—highly sought after and much-needed funding for these very big charitable organisations.

I should start—and I’ve forgotten—by referring to the entity by its Māori terminology: Te Poari ā-Takiwā Tuku Pūtea Taonga Whakaahuru. I would like to point out what has happened since the, I guess, coming on or the live activation of the Charities Act 2005. What that’s done is kick off a second set of accounting practices for these nine amenities. They’ve got a combination of requirements. It’s specifically a dual reporting requirement, and what this particular bill is doing is requiring one less requirement. When you look at the nature of charities in New Zealand—and certainly all nine of these—and the sometimes cumbersome paper workload they have, it means that to ask them to do two things at once, especially when it comes to finances and accounting practices, is cumbersome. So we support this bill because we’re looking for a practical way forward.

I thank Dr Parmjeet Parmar, a list MP based in Mt Roskill, for her work on this and for sponsoring this bill. I, as the MP for Maungakiekie, also take in part of that same park and so does the Hon Paul Goldsmith from Epsom. So there are a number of MPs that have jurisdiction—

💬 Hon Member: You might be forgetting someone there.

—in and around the Stardome Observatory. I’m referring to the MPs of my party and, yes, I will pay attention to David Seymour.

The Stardome Observatory chief executive who has recently retired is the acting chair of the—may I use terminology and say ARAFA, Mr Speaker?

💬 SPEAKER: You may as long as you can relate it to the bill, which you’re having a bit of—

Well, it’s the acronym for Auckland Regional Amenities Funding—

💬 SPEAKER: Just saying the name doesn’t make it relevant. Let’s get on with it.

—colloquially known as ARAFA—easier to say and less tongue-twisty. For Mr Houldsworth to be in the acting chair capacity for ARAFA, I think, deserves a mention. It’s a bit of a tireless job that he’s taken on, especially, as I mentioned earlier, the to and fro between nine major charitable organisations and their dire need for funding.

So when I look at this bill I would simply say thank you very much for what seems to be broad support across the House. This is a practical measure. We all know that charitable organisations need support wherever they can. Thank you, Mr Speaker, for the chance to bring these few words. We support this bill.

I will speak briefly on the Auckland Regional Amenities Funding Amendment Bill. First of all, I would like to congratulate my colleague Dr Parmjeet Parmar for her hard work. This is a very useful bill. Although it’s a very small bill, I say it’s a very useful bill because it relates to many Aucklanders, because the nine amenities are really related to the daily lives of Auckland City residents. The city itself is a very diverse city, just like New Zealand. I want to emphasise that New Zealand - wide, 25 percent of people were born overseas, but in Auckland that’s nearly 40 percent. [Speaker holds up the bill] What I’m saying is that, actually, these amenities represent the diversity of New Zealand and Auckland. That is why I’m saying this is important for us to support the bill.

💬 SPEAKER: And now we’ll start talking about the bill, not the amenities.

Yes. So the bill basically will make it easier for these amenities to do their financial reports. That is necessary because at the moment these amenities have to do their financial reporting according to what we call the New Zealand International Financial Reporting Standards, which is an old standard, actually, and means that they have to do two sets of financial reports. But if we use another one, which is recommended by this particular bill, like in the Charities Act 2005, it means it will be easier for these amenities to do their financial reporting, which would be more cost-effective.

We believe it’s important because we need to support these amenities, and these amenities are doing this anyway. It’s just not really in accordance with the Act itself—that is, the Auckland Regional Amenities Funding Act 2008. So the purpose of the bill is to, basically, make sure these amenities could do what they believe to be easier for them to do and it would be more cost-effective for them to do, and we believe it’s important.

If we look at this particular purpose of the bill, and at the same time we may look at the purpose of the funding board itself, the funding board is actually to encourage the diverse society of New Zealand. As we can see, the funding board would fund activities related to arts, culture—

💬 SPEAKER: OK. Second warning, last warning: stick to the bill.

OK. So, basically, I would say that we support the bill because we believe this bill itself will be able to enable these amenities to do a better job in serving the community. I believe it’s important because, at this stage, these amenities are using this Charities Act practice anyway, so we are trying to make sure they are doing this legally with this amendment bill. Thank you, Mr Speaker.

I want to congratulate Parmjeet Parmar for doing the real hard work of an MP in bringing a local bill to this Parliament. I know, as—

💬 SPEAKER: Order! Order! The member should read the bill.

Well, it’s a local bill—is it?

💬 Hon Member: Private.

💬 SPEAKER: It’s not a local bill.

No? It’s a private bill, and I want to congratulate her for that too, because I know, as the MP for Epsom, that many of the organisations—some of which are the opera based in Parnell and others such as the Auckland Philharmonia Orchestra, which is heavily frequented by Epsom electorate residents—will appreciate this additional convenience in regard to the tax obligations and accounting applied to those organisations. So I commend this bill to the House. Thank you, Mr Speaker.

Thank you, Mr Speaker, for the opportunity to speak to this private bill, the Auckland Regional Amenities Funding Amendment Bill. I just want to make a few brief comments on behalf of everyone in the Pakuranga electorate, but, firstly, I’d like to acknowledge Parmjeet Parmar for bringing this bill to Parliament.

It’s an important bill for Auckland, and it’s an important bill because it affects some of our important organisations which play a critical role in our community. This bill, in particular, will assist the coastguard, who have a big presence in Howick, in my electorate. They are one of the amenities which will benefit from this. I just want to say that it’s important that we make things as easy as possible for charitable trusts, incorporated societies, and organisations like these, who are generally run by volunteers—run by people who have a passion for their community and want to make a real difference in their community—so that the red tape, the duplication of processes, and all of those elements are reduced.

That’s exactly what this bill will mean, particularly for the coastguard. I acknowledge, again, their presence in my electorate. What this bill essentially does will mean that they will no longer have to put forward two sets of financial accounts under the New Zealand International Financial Reporting Standards and the generally accepted accounting practice. That will simplify their processes and save them money, which will essentially mean that that money can be put towards the good work that they do in the community. It will mean that they can put more resource towards the coastguard in Howick and less resource towards having to pay accountants to prepare financial accounts, which won’t be necessary any longer under this piece of legislation.

So I’m looking forward to more lives being saved at sea and less accounting documents being prepared. That’s something which will benefit my electorate. I support this bill. Thank you, Mr Speaker.

Thank you, Mr Speaker. I rise to make a very short call to say that we support the intent of the Auckland Regional Amenities Funding Amendment Bill and, therefore, support it to go to select committee. I commend this bill to the House. Thank you.

Mr Speaker.

💬 SPEAKER: I’ve lost the member’s name.

That’s all right. You don’t have to remember my name; you just have to give me the call.

💬 SPEAKER: Yes—Simon O’Connor. I apologise.

Fantastic. Look, thank you very much. I just feel inspired all of a sudden to give a speech in this House. It’s sort of a contrarian nature in me, perhaps, that when those who show a lack of competence and knowing—

💬 SPEAKER: Now, the member will speak about the bill, or he will be terminated.

Indeed.

💬 Hon Tim Macindoe: He’s inspired by the bill.

Absolutely he’s inspired by the bill, which is, of course, a private bill in the name of Dr Parmjeet Parmar: the Auckland Regional Amenities Funding Amendment Bill. The first critique is it is a rather long title, but we’ll deal with that in committee stage.

I think the key element for me is that the people of Tāmaki, who I represent, would be very supportive of this for two, or, actually, three reasons. The first, as has been highlighted by other speakers—but, of course, I’ll be giving the Tāmaki perspective on this—is that it’s around a change of accounting practices. The second reason is that, certainly, my constituents are always concerned about how rates are spent, and so this amendment bill is going to make sure that rates are spent more efficiently as a consequence of tidying up the accounting practices. The third reason is that while a number of these organisations like the Auckland Philharmonia Orchestra (APO) and the New Zealand Opera are based outside of Tāmaki, I think that if they were to open up their books, they would find that those fine, fine constituents of that electorate probably put in the most amounts of money, aside from the Government.

Dr Parmjeet Parmar, of course, is sponsoring this bill. As a private bill, it requires a member of Parliament to do so. I think it’s most appropriate that it has been an Auckland MP, and—not to belabour the point too much—being an MP in more of this central region is actually quite symbolically important for this bill.

What it, effectively, is doing is aligning two sets of accounting standards, or, actually more accurately, it is removing one of them. As I’m sure you’re very much aware, the New Zealand International Financial Reporting Standards is the older of the two standards. The other is the generally accepted accounting practice, under the acronym GAAP. Effectively, they are two different standards, and because of an anomaly in the law—malicious, intentional, a mistake, or otherwise—the fund has to apply both. It probably doesn’t take much explaining, but, again, I feel very expired, because they have to—

💬 Hon Chris Hipkins: “Expired”?

Inspired. Yeah, I should have—

💬 Hon Chris Hipkins: You should have expired.

Well, actually, to expire is the next bill, but that’s by intention. The key is that they now have to do two sets of accounts, and that’s two sets of expenses. When one reflects not only on the nature of the amenities fund but those they fund themselves, they need efficiencies, and that plays into the second and third points that I was raising.

First and foremost, this fund only attracts about 2 percent of the total spend of the councils and, as such, certainly to the fine people of Tāmaki, they will want to make sure that of that 2 percent, most of it is going to actually fund the likes of the APO, the New Zealand Opera, and the like, and it’s not going into a dual set of accounts. One of the questions I actually put to the member when she put forward the bill was, well, surely they can just present the one copy twice—do it in one format and hand it across to the next. Of course they cannot, and hence we now have to move down the private bill.

So the first reason is efficiencies within the fund. The second is that it will also reflect, I think, as a consequence of this bill, that if the amenities fund is working more efficiently, as one would expect, if it’s doing so and if it’s seen to be accountable—all puns intended—that will, in turn, play quite happily into the hands of locals, who will want to donate more.

So the amenities fund is a critical part of New Zealand—well, let’s not be too dramatic—of Auckland’s structures. As I said, it’s, effectively, a council body, and one that sits within council’s purview. As I said—

💬 SPEAKER: Order! Order! Back to the bill.

Back to the bill. Talking about the amenities fund, which sits under the council—

💬 SPEAKER: Yes. That’s not part of the—that’s not the subject of the bill.

Fantastic. That’s all right—we’ve chewed up another 10 seconds. So the key is that we’ve got here a situation where they’re going to apply one accounting practice from now on—fortunately, the more modern one. Fundamentally, what this is going to achieve is that the amenities fund and those they can assist will be fundamentally, Mr Speaker, able to keep more of that hard-given cash by the ratepayer and to provide more money to those nine entities, which I’m sure it’s a great relief to you that I will not name.

So I’m very pleased, Dr Parmjeet Parmar, that you have brought this to the House. I look forward to its speedy, speedy progress, which is somewhat presciently indicated by the speed of the debate in this House, and as an act of generosity, I leave the last 15 seconds.

Thank you, Mr Speaker. I won’t take long. This is a very simple and short bill, but a significant bill for the nine amenities that are going to be affected once this bill has gone through, because it will make their lives easier. Their paperwork will be reduced, and that’s really important.

I want to acknowledge the amenities board for raising this issue with us and helping us fix this issue. I am sure David Houldsworth and his team will be very happy to see this bill progressing through the House. I want to acknowledge all sides for their support. Finally, I want to say that it’s actually a real pleasure to sponsor this bill, being based in Mount Roskill, as David Houldsworth served as the chief executive of one of the amenities that is based in Mount Roskill. So I look forward to working with the Governance and Administration Committee on this bill. Thank you, Mr Speaker.

Bill read a first time.

Bill referred to the Governance and Administration Committee.