Charities Amendment Bill

Thank you, Mr Chair. In the first part of this legislation, as my colleague the Hon Scott Simpson talked about, we’re talking about the definition of an “officer” in relation to a charitable entity.

The very first submission that I’ve picked up is from Age Concern, and I want to give a shout out to my local Age Concern in Taupō because they do extraordinary work. Their first statement is: “Age Concern New Zealand would like to see a first principles review of the Act … A first principles review would include revisiting the definitions of a charity and a charitable purpose. [And] we note the first principles review was deemed out of scope [which] is at odds with the Government’s original stated intention of widening the definition of charitable purpose.”

So, when you talk about definitions and the definition of an “officer”, I think it is important to the committee to be clear about, first and foremost, what the definition of a “charitable entity” is, because it was absolutely resounding and shouted very loudly by the submitters, who came before the Social Services and Community Committee on this bill, that that was the bigger issue in terms of their organisations.

A secondary issue was then around the definitions, and the feedback when we talk about the definition of an “officer”—actually, although the bill was meant to make it easier for charitable organisations to do their work, the very changes in the definition of an “officer” have made it more difficult and more complex and more confusing. If you think about many of the charities that this bill purports to improve life for, then if we just start in Part 1 alone, with the definition of “officer”, it hasn’t done the job.

So the question is: in terms of analysis of the unintended consequences of the existing definition of an “officer”, what has been considered and what protections are in place for what will now be a more confusing definition of an “officer” than there was before?

Thank you, Mr Chair. I actually am referring to a tabled amendment which I will table in a moment, if that’s all right. It’s a new clause 27, so therefore it’s going to be inserted after clause 26, and it’s entitled “the charities that hold a class 3 operator’s licence”. So the question is to the Minister around the likes of Coastguard, Countdown Kids Charitable Trust, the national Heart Foundation, and potentially others. So the Minister will know in the charities space that because of COVID—actually, if I might, Mr Chair, refer to the tabled amendment in Part 1—

CHAIRPERSON (Greg O’Connor): Proposed tabled amendment.

Oh, I can table it right now. Actually, if I might, very welcome to have it taken through. Look, long and short, the Minister will know that many charities like Coastguard and the national Heart Foundation have only ever been able to do raffles in person. During COVID, they’ve been able to do that online, and the Government rightly responded to that with two pieces of legislation. But the Minister will also know that these exemptions, if you will, expire in October next year. So charities like the national Heart Foundation, Coastguard, Countdown Kids will no longer be able to run their charitable raffles online, and this is potentially a bit of a problem.

Really, the question tonight in using this tabled amendment is firstly, to the Minister, to draw attention to this. These are charities who do great work in our community. They want to be able to continue to fund-raise online using the class 3 operator’s licence. There are crossovers into the Gambling Act—I want to acknowledge that—but this is within the charities space. They want to continue to raise funds online. Personally, as the shadow Minister of Internal Affairs, I think that’s a really good idea. This tabled amendment to insert a new clause 27, basically, allows these registered charities to continue to operate with a gambling class 3 operator’s licence. And it’s trying to make sure that post-October 2024, these charities, which do amazing work in our community, can continue.

I suspect by the nature of the tabled amendment, partly because I drafted it, it will probably be ruled out of scope. I’m just feeling prophetic this evening. But I would like to know from the Minister whether there is work being done by this Government. In fact, it would be wonderful, with the likes of the Heart Foundation, the Coastguard, and others, if the Minister could confirm to us whether the Government will undertake to ensure that these charities can continue to do their good raffles and so forth online.

Thank you, Mr Chair. I’ve just got to admit up front, in the second reading of this bill, that it was new to me to come to this. I got quite a lot of feedback from the public and the sector on my speech. They said that they enjoyed that except for the fact that we said we were supporting the bill. They gave me quite a long list of reading to do to get me up to speed on the detail of this bill, and I want to thank them for that. It’s great when Parliament works in that way. So I have now done my homework, and I’ve got quite a few questions for the Minister that I hope will help me understand and put their minds at ease as well—or not.

I’ll pick up from the issues that have been raised by members of the National Party about the role of the officer and the changes in this legislation. I’d love to hear the Minister explain or talk to the concern that this extension of the role of officer potentially bringing in staff members—because it covers those with significant influence over substantial decisions, which could well be a CEO who has a role in the organisation—then would cut across traditional governance management splits and established rules and settled practice within organisations that may have been working really hard to try and get those differing roles kind of embedded in their organisation.

I understand that the Department of Internal Affairs argued that, actually, this is just about increasing accountability. But the view that was coming through to me was, “But, actually, for staff members—of that CEO, as an example—their accountability is to the trust, who is their employer.” Community Networks Aotearoa asked me to ask: what are the implications in terms of an employment decision or a decision made by a charities trust on an employee? How will that interact with employment law?

There was also the changes in terms of the role of the officer, and the roles and duties of those who govern organisations in the area. It was pointed out, I think, by Sue Barker—and I understand that some people had a concern, in a sense, that she was campaigning against this bill. I do want to raise the point that this woman is the director of Charity Law Association of Australia and New Zealand, a member of the core reference group of the review of the Charities Act, co-author of the text The Law and Practice of Charities in New Zealand, and was awarded the New Zealand Law Foundation International Research Fellowship on what a world-leading framework for charities law would look like. So she’s not some marginal person. You might even suggest that she’s the person with the deepest understanding in our country of charities law that we may want to really listen to in this area.

She raised the point that the language in relation to the role of the officer in new section 36A—clause 17—uses the language where their role is to assist in “deliver[ing] its charitable purpose”. This is in new section 42G—clause 20—“achieve its charitable purpose”. Whereas for other legislation around that—say the Trusts Act—a huge amount of work was put into the consideration of the language relating to the role of officers in those pieces of legislation. What they came up with was that it be “furthering” the charitable purpose—not “delivering”; not “achieving”—because, actually, there is a difference between those things. By introducing new language through these amendments, we’re actually creating confusion between those pieces of legislation.

Why are we not just articulating the responsibilities and the roles and duties that exist in those other pieces of legislation? That’s the concern. Why are we not just doing that? I’d really love to hear some answers around this.

Thank you, Mr Chair. I think that Jan Logie has posed a series of very good questions that do need a substantive answer to them, and I’m delighted to hear that, through a process of participatory democracy and what a former employer of mine would have referred to as “balanced feedback”, she’s now more enlightened and more au fait with this piece of legislation.

As I said in my first contribution, this is actually really important. In a previous life, I had the privilege of being chief executive of a charitable organisation, the Make-a-Wish Foundation. It was involving literally granting wishes to children and young people who had major health conditions to confront. While that was being done, I got to have a very good understanding about the impact of the regulatory regime that revolves around being a registered charity and what that entails.

Now, in the case of Make-a-Wish, it was a longstanding, credible—always looking for more support—reasonably well-resourced organisation. It was always obvious to me that, in fact, for many smaller charitable organisations—and there are literally tens of thousands of them around the country—this regulatory regime and change that is being imposed by this Charities Amendment Bill will have a big impact on their ability to do the good work that the charity was set up for in the first place.

I want to go to a matter that I think was raised by my colleague Maureen Pugh, who was very involved in the select committee process. It goes back to the purpose, the rationale of why this piece of legislation is being debated in the committee of the whole House tonight. What I think my colleague Maureen Pugh was keen to know was whether, as the Minister explained in select committee—and I understand this was the quote—the bones of the Act are working well and therefore do not need a major review. And it was the major review that was committed to in the Labour Party manifesto—when many of the submissions from the charities were critical that that first principles review did not take place, because the existing Act is deficient.

So, if the Minister in the chair could give us some insight into the motivation, the rationale, and the purpose for pursuing this, which will create so much change in the sector—not to think for a minute what some of the change to terminology will mean in terms of potential litigation to define judicially the new words that are in this piece of legislation. I really am having difficulty understanding why the Minister is pursuing this to the degree that she is.

I’ll just clarify some of the points made by members in their contributions this evening, starting with Jan Logie’s comments. Just to reiterate—I’ve made this point a couple of times already in regard to questions or comments around the definition of “officer”—the point of this is in response to the Social Services and Community Committee’s recommendation that the definition of “officer” be amended so that it’s clearer and that it’s more precise and actually clarifies who’s captured by the definition. I do believe that the amendment achieves that aim. As I’ve said previously tonight, the aim here is to capture those who exert significant influence over either the financial decision-making or the operational and strategic decision-making of an entity, of a charity.

To the point around language that the member raised: I am advised that the Parliamentary Counsel Office has advised us that the two words that she mentioned—“achieve” and “furthering” a charitable purpose—actually have the same effect when it comes to the legislation. So that has actually been checked and squared off in that sense.

To the point around the crossover, or the potential crossover, into employment law, if the definition of “officer” captures, for example, a chief executive, which it well may if the chief executive does exert significant influence over either the financial or strategic/operational decision-making of the charity—and that is the point, because in some cases there will be individuals who are either in management or governance roles but who do exert significant influence. The whole point of the amendment is to ensure that they are accountable if they do so.

With regard to crossing into employment law, it does not, is the short answer, because, basically, the implications that arise from the officer’s duty will be confined to this particular legislation, the Charities Act. Most charities will have a different legal structure, whether that’s as a company or a trust or something else entirely, and there will be different pieces of legislation that deal with issues therein.

Finally, to the amendment tabled by Simon O’Connor, being able to—

💬 Simon O’Connor: Great amendment.

Sorry?

💬 Joseph Mooney: Great amendment.

—by Simon O’Connor—I feel your support for the charitable sector, and, of course, it is one that I share, and would want them to be able to carry on with their duties. However, unfortunately, my understanding is that the issues you raise are actually dealt through the Gambling Act and therefore out of scope with this particular piece of legislation.

Thank you, Mr Chair. I want to follow on from my colleague Jan Logie in terms of exploring in more practical terms this definition of “officer”. I want to use a practical example from the submission of Philanthropy New Zealand, who have over 200 members representing the donors to many of the 28,000 registered charities that this bill is purporting to support. In their submission, they ponder the question of definition of “officer” and whether or not in the new definition even a donor can be captured by this definition. There is confusion around whether it’s someone in senior management, like a chief executive, other staff, or volunteers. So I would ask the Minister to very clearly and succinctly put on record for the committee today: who is captured by the definition of an “officer” and who is not?

The time has come for me to report progress. I would anticipate some time for that answer.

Progress to be reported.

House resumed.