Incorporated Societies Bill

The last time the House considered this bill, this interrupted reading, we came to the next call going to the Labour Party.

Thank you, Madam Speaker. As MPs, we’re required to do quite a few things in our electorates, and one of the ones that comes up a lot is we attend AGMs. Now, I’m sure everyone here in the House will remember the last AGM they were at, perhaps. The next one I’m attending is the Ngaio Crofton Downs Residents Association AGM tonight—and all these meetings we’re at, they’re one of 24,000 incorporated societies around New Zealand that until now have been operating under a 1908 piece of legislation. Well, I think most of us here will agree that a piece of legislation that still talks about pounds and shillings in its sanctions regime probably does need a bit of updating, and that’s what this legislation is here to do. It incorporates organisations like political clubs, social clubs, and recreational and religious groups. It really does go across the spectrum, and at 24,000, there’s probably not many of us New Zealanders whose life is not in some way affected.

Now, currently, most of those societies are run pretty well, and I must say that other than perhaps the odd, strange bit of chairing, they do get through. But, really, what many of those members don’t realise is their vulnerabilities, because as we become more litigious as a society as there are more hurdles to be leapt, whether it be health and safety or whether it be various other pieces of legislation, it is important that members of those societies understand just how vulnerable they can be.

What this legislation does is it ensures that we outline some of the structures under which they need to be operating—even something as simple as ensuring that they have a dispute resolution provision—because, again, sitting through those AGMs of organisations that we’re part of, often that’s where personalities break down and there’s a breakdown in the relationships that can so often end up becoming the demise of that incorporated society, whether it be through fund-raising or other aspects. So it becomes very important that they actually have dispute resolution, and this legislation outlines something like that.

So I won’t go through the detail. Broadly, what I’ll do is recommend this to the House on the proviso that it is incredibly important that those who are part of these societies do now have a set of rules that they can refer to when they come to those disputes, so that they can know not only that their personal liability is protected but also the whole purpose of that organisation’s existence does continue. So I commend this to the House.

I get confused these days about how often Greg O’Connor speaks before me and then myself. There seems to be some sort of plan here to have one O’Connor follow another. We’ll have to get Damien in to speak after this.

I want to acknowledge what Greg was saying—

ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! The member will refer to other members by their full names—Damien O’Connor.

Well, I could call him Greg O’Connor; that’s probably more accurate, but there we go.

ASSISTANT SPEAKER (Hon Jacqui Dean): Well, just, if Simon O’Connor would like to resume his speech.

He would, and he’ll speak in the first person.

Great to be speaking on the Incorporated Societies Bill. Greg O’Connor noted that he’s going to an AGM tonight. As an Auckland MP, I’d have to say it’s been over 95 days since I’ve been able to attend an AGM of an incorporated society. It’s just a small reflection on the dynamics which are happening.

💬 Hon Member: I did AGMs on Zoom.

💬 Hon Member: Not by Zoom.

And I hear someone say, “Oh, well, they could just do it on Zoom.”, but, of course, if you understand incorporated societies, which fortunately this side of the House does, it has to be in the rules. And often you have to have quorum. So the Minister’s right, if they’ve thought ahead and they’ve changed their rules to allow a Zoom AGM, but most of them haven’t been able to do that because they haven’t been able to form together in person to change the rules to make the requisite changes. However, this is a bill which National supports because, fundamentally, it’s bringing about the changes which are needed. And if I could riff, if you will, off that previous comment about, particularly in Auckland, AGMs that cannot happen, we are seeing now incorporated societies trying to update their rules to reflect a modern environment. And so it’s not a surprise, therefore, that the Parliament is looking to revise and update its rules.

As most speakers have noted in their contributions in the House, it was 1908 that this Act, the current Act that we’re looking to change, was passed. I’m not going to entertain the House with a list of historical facts of what happened in 1908. I would have handed that over to Winston Peters in New Zealand First in the past to do, but they’re not here at the moment. But what we’re seeing is a bill that’s long overdue. In fact, Greg O’Connor noted it quite correctly: when a piece of law is still referring to shillings, you know that the legislation needs updating.

Importantly, this was work, I believe, that was begun in 2015 by the then National Government which has been, fortunately, picked up by the current Government and has proceeded through here, of course, to its second reading. I’m not going to go through all the select committee work. It’s fair to say, for those tuning in, that this is quite a complicated piece of legislation, not because the issues of incorporated societies are complex, but if you look at the original piece of legislation, the intricacies required to update it have been many, and the select committee’s done, I think, a relatively good job of handling things there.

Look, some of the most key themes which come out of this are, first and foremost, recognising there are different sizes in incorporated societies. I believe New Zealand Rugby would be an example of an incorporated society—it’s huge; hundreds of millions of dollars—right through to very small incorporated societies, be it in Auckland or any other part of the country. This bill—this proposed piece of legislation—enables different tiers of responsibility. In other words, we’re not going to put in—I think that’s a really good step by the Government and certainly the recommendations of the select committee not to put onerous burdens on to the smaller incorporated societies. I mean that’s a logical thing to do. There’s always been a bit of debate of where you draw the line, and I think $50,000 has popped out as the line. So a lot of New Zealand’s incorporated societies are very small—well, small in terms of numbers, small in terms of their cash assets and work, but actually, importantly, a major and huge contribution as every member here would know.

Importantly, the legislation’s also here to impose new duties on those who run incorporated societies. It was something in the original 1908 Act that wasn’t overly articulated. And, again, for those listening at home, what it’s attempting to do, or what this piece of legislation is proposing to do, is pretty much mirror that of what company directors, board directors would have. So they’ve got important duties now to undertake. And I suspect, having been on incorporated societies, as pretty much, I’m sure, just about every member here will be in one way, shape, or form, it’s going to be quite important for those members of incorporated societies to understand what their new duties are, if and when this piece of legislation passes through the House.

There’s also penalties, as you would expect, that are going to come through for that. So not only are duties going to be given, and therefore responsibilities held by those leading incorporated societies, but there are requisite penalties. I mean, there’s basically no point in telling them to do something if there’s not a penalty in play. And not to be flippant, those penalties are well described and are now in much more modern nomenclature, along with the appropriate numismatic figures that one would expect.

Importantly too, as we say, the reporting requirements are changing. A lot of it’s around the various accounting standards that are required. I’m not going to go into that at length, because actually it was last year this House went through an enormous debate around two different types of accounting processes which had to be aligned. Fortunately that’s not going to be a major issue here with this Incorporated Societies Bill, but it is updating what is required there. But as I mentioned earlier, smaller societies $50,000 and under are going to have a different set of requirements to the large ones, as you would expect. As I said, to pick on New Zealand Rugby, conscious they’re actually going through a lot of discussions at the moment when you’re making over—well, not making, if you are an incorporated society worth hundreds of millions of dollars, you are definitely going to expect a different level of reporting requirement.

Importantly too, there’s a transition period that’s been incorporated into the bill. That’s just smart understandings. No incorporated society is going to be able to pivot that quickly, and doubly so—again, if I can use the Auckland example, which I picked up much, much earlier—it’s going to be hard for a number of incorporated societies, both with the COVID lockdown restrictions plus, I might add, as we head into the summer period, it’s going to be very, very hard for these incorporated societies to meet and make the changes necessary. So there is a transition period—I think it’s about 2½ years. Happy to be corrected on that, not through a privileges complaint but just send me a letter would be appropriate.

💬 Hon Member: Ha, ha!

I always get worried when some of my colleagues laugh. It indicates there might be a letter coming. But look, long and short, there’s about a 2½ year transition, which I think will be appropriate time. It’s probably too late now. I mean we could look at a Supplementary Order Paper in the upcoming stages to see whether there’s some flexibility that could be added there if this lockdown continues, if the love of rules and regulations continues from the Government. Maybe we won’t be as free as we’d like to be in 2½ years, but that’s something that we can discuss at the committee of the whole House.

There are also some requirements around incorporated societies that are not listed as charities. Again, an important distinction. Some of these societies can be incorporated and charities, some are not. That’s going to be relatively important. This bill well handles that.

Importantly too, actually, there’s going to be a mechanism for incorporated societies to amalgamate or come together. It may seem a small matter, but actually with the tens of thousands of incorporated societies out there, a lot of them doing good work which replicates others, you do need a mechanism for them to form up, and in fact that’s going to be far more efficient, not only for them but often these societies are serving people in the community, so there’s a real benefit there.

They’re also suggesting that the number of members required moves from—again, anyone who’s been involved with an incorporated society knows you need to get 15 people—it’s one of those magic numbers—to actually be incorporated. And you run around busily collecting signatures. That’s going to be reduced by this bill to 10 people. And I think that’s, again, quite pragmatic. Again, it won’t surprise any members in the House here who are a part of incorporated societies or sports clubs, dare I say even political parties—not the larger ones, some of the smaller ones—actually getting a number of active members these days is quite difficult. So I think having it at 10 is quite appropriate.

So as I said at the start—

Order! Sorry to interrupt the member. In accordance with the determination of the Business Committee, I call on Government order of the day No. 27. I declare the House in committee for the special debate on current issues and priorities.