Charities Amendment Bill

I present a legislative statement on the Charities Amendment Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon PRIYANCA RADHAKRISHNAN: I move, That the Charities Amendment Bill be now read a second time.

Charities are a core component of a well-functioning, cohesive society and support our nation’s wellbeing, stability, and health. Charities deliver a number of critical services that many rely on and step in when times are particularly tough. We saw this during the COVID-19 pandemic and more recently after the severe weather events. Charities bring people together—people who care about a cause and making a difference, people who want to help those less fortunate and make a positive impact on our society. To say that the work that charities do is valuable would be an understatement, and I want to take this opportunity to thank the charitable sector for their work.

I am sure that every member of this House has interacted with a charity at some point, as a volunteer, an officer of a charity, a donor, or even a beneficiary. The charitable sector is where I spent most of my working life before entering Parliament, and I have experienced firsthand some of the barriers that charities encounter in their day-to-day mahi. That’s why I’m pleased to see the Charities Amendment Bill have its second reading today.

This bill amends the Charities Act 2005, which is a key piece of legislation for the sector. It was established to provide a voluntary registration, reporting, and monitoring regime, to ensure that entities receiving tax benefits continue to carry out their charitable purpose. The Act has been in place for almost 20 years and it was time to ensure that the legislative settings are still fit for purpose.

Changes to the wider operating environment have prompted the need to modernise the Act; we got this feedback loud and clear from the sector. For example, there have been changes to other legislation that charities need to comply with and also relatively low and declining rates of compliance with the Act. This bill makes practical improvements to the Act to make it easier for charities to continue with their work while balancing the need for transparency and accountability. The bill makes changes that will increase transparency, improve access to justice, and simplify financial reporting that’s required from small charities. Charities should be able to focus on the valuable work that they do while enjoying the benefits of being registered. However, it is also important that the public continues to have trust and confidence in the sector. This bill seeks to strike a balance between these two goals.

Before I get into the finer detail of the bill, I would like to acknowledge some people who have helped contribute to its development up until this point. Can I thank the chair of the Social Services and Community Committee, Angie Warren-Clark, and committee members for their constructive consideration of the bill. I am aware that several committee members have extensive experience in the charitable sector, and I’m confident that the committee has used this experience to improve the bill. I appreciate the time the committee has taken to understand this bill and the views of submitters, and I recommend that the House take note of the select committee’s report and adopt the amendments recommended by the committee.

I’d also like to acknowledge and thank all those who shared their views on this bill. Their submissions have improved the bill and I appreciate the time they took to prepare written submissions and to appear before the committee. One submitter succinctly noted that the kaupapa of bringing the laws governing charities into the modern era was important, and that legislation should cover all charities fairly and equitably to ensure that those who need their services receive them. I acknowledge submitters who have engaged with this work since the Act’s initial review back in 2018. Submitters expressed their appreciation for the ongoing opportunity to provide input on the bill, and other submitters agreed that the resulting legislation reflects that input.

In addition to these comments, there are some matters raised by submitters that I would like to discuss further. The bill aims to remove red tape for charities, to allow them to focus on their day-to-day work. The bill does this by enabling simpler financial reporting from small charities, to reduce the compliance burden of reporting. Charities have a duty to financially report each year, to ensure transparency and accountability in their operations. Submitters emphasised the need for simpler reporting standards due to the compliance burden created, and outlined that current reporting under the tier 4 standard is much too onerous for small charities, who typically have minimal resources at their disposal. I am pleased that this provision was met with overwhelming support by the sector. Making practical improvements to the Act is crucial to support charities to get on with their work and reduce that financial reporting that I mentioned for small charities. That’s a real-life example of this change.

The bill aims to improve public accountability and transparency by improving the mechanisms to strengthen the governance of charities. One way that the bill does this is by amending the definition of “officer” to ensure that people with significant influence over the substantial decisions of the entity are captured in the definition. Officers of a charity are not just limited to the treasurer or the chief executive (CE) of a charity, and this change will ensure that people with influence over decision making and the direction of the charity are appropriately defined as officers. Support for this provision emphasised that stakeholders, funders, and the public are entitled to expect the highest standard of best-practice governance for those who lead charitable entities, and that amending the definition of “officer” is clearly intended to improve the accountability and governance of charities.

The bill also introduces a new requirement for charities to review their governance procedures at least three-yearly, to ensure that they are current and assist the entity to achieve its charitable purpose. Submitters commented that this would improve governance practices in the charitable sector and that it aligns with good-practice guidance. Overall, the provisions aim to improve the standard of governance of charitable entities while not unduly overburdening organisations, and I consider that the amended provision reflects this intent.

Improving access to justice for all charities is another key change in the bill. The bill allows more decisions to be appealed, to improve access to justice. Rather than just limiting it to the Charities Registration Board decisions, some of the more significant decisions of the chief executive of the Department of Internal Affairs can be appealed. Submitters in favour of this provision highlighted how the expansion of the appealable decisions heavily favours charities and improves their access to justice.

Some submitters maintained that this expansion should not be limited to just significant decisions and should include all decisions of the registration board and of the chief executive, but that would be impractical. It would be impractical to broaden this to include all decisions, as this could prevent the CE from exercising their essential compliance and enforcement functions, and that’s not the intent of this bill. The amended provision includes more decisions by the CE that charities may be able to appeal and maintains the improved access to justice that is intended by this bill.

So, to sum up, so many of our charities carry out important work to support people who are struggling or going through a particularly tough time. This bill aims to make it easier for charities to operate while also maintaining public support for the sector, which is critical. This, in my view, will continue to support and strengthen the charitable sector. For that reason, I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Madam Speaker. I rise to speak on the Charities Amendment Bill in its second reading, and speak in opposition to this bill.

The objectives of the bill are to make practical changes to support charities to continue their vital contribution to community wellbeing, while ensuring that their contribution is sufficiently transparent towards its parties and the public. We contend that this amendment bill does not do that.

National absolutely values the work that our wonderful charities and the volunteers undertake for our communities, right across New Zealand. And they deserve to be able to operate under legislation that’s workable and enables them and their volunteers to contribute.

Volunteers contribute an enormous amount to this country—around $4 billion worth of work—and that keeps our communities connected, it supports those that need support, and it revitalises and enriches our communities. There are 28,000 registered charities in New Zealand and they deliver a wide range of services, and we say thank you to all our registered charities and all the wonderful volunteers that work in them.

But because of that, they deserved much more than a tweaking of the Charities Act. Labour, in their policy in 2017, said they would carry out a first-principles independent review of the Charities Act. They have not done that, and this Government is a master. They do not understand that they should under-promise and over-deliver. They are an absolute master at specialising in over-promising and under-delivering, and we have seen that with the Accessibility for New Zealanders Bill and the transformation they promised the disabled sector. We’re now seeing it again in this Charities Amendment Bill and the promises of this first-principles independent review that’s now landed in just a few tweaks to the Charities Act.

So people are naturally disappointed in it, and that is why the majority of the submissions called for the bill to be withdrawn. They made it very, very clear that the fundamentals of the Charities Act are not sound, that the definition of “charitable purpose” is not working well, and it does not meet its stated objectives of making practical changes to support charities. So they do not support this amendment bill.

The bill is just another example of unnecessary and unhelpful piecemeal changes being imposed on a sector. But the bill has not been adequately thought through, and you can see that from the submissions. It has not brought in the changes that were wanted; it has put in a myriad of unintended consequences that will place further unnecessary barriers in the way of charities. Even the Department of Internal Affairs (DIA) said in its own regulatory impact statement that there is inadequate consultation, inadequate problem definition, and a lack of evidence to support the proposals.

The National Party considers that the definition—let’s get some specific things in here—of an “officer” should be limited to governance only, the trustees of a trust and members of governing bodies. I go to a submission from one of our very, very fine charities down in Southland: Number 10 Southland Youth One Stop Shop. They say in their submission, “We oppose the following proposed changes to the Charities Amendment Bill. This definition of officer is broad, vague, and doesn’t include criteria for deciding who is an officer. It confuses the governance and management relationship and is inadequate for purpose.” That is the sort of submission that came in on this.

Let’s go to another part of the bill. The National Party considers that it’s misleading to state that the bill expands the range of decisions that are able to be repealed when, in fact, the bill limits charities to a mere handful of decisions made by charity services. Many submitters called for all decisions made under the Charities Act to remain appealable, as per the original Charities Act.

Again, I return to the submission from Number 10 Southland Youth One Stop Shop. So they say in clauses 23-26 (55A): it “restricts charities to four types of appeals only, which is too closely prohibitive. Restricting appeals to only be heard by the Taxation Review Authority is unreasonable given that not all appeals will be tax-related. Charities are much more than their tax status. The choice to go to the High Court is expensive, but charitable entities must be allowed to retain their choice of appeal body.” So I’m sorry, again, the specifics were not supported.

The National Party considers that requiring three-yearly reviews of governance procedures creates an unnecessary red tape for charities, and it’s contrary to the stated objectives of the bill—and we heard the Minister say that it was going to simplify things. Well, it doesn’t simplify things. It is a blunt, prescriptive, one-size-fits-all legislative rule that does not work in the areas of charities law because they inevitably fail to accommodate the diversity of human endeavour. An increasing array of exceptions and exemptions then becomes needed.

So, again, this notion of one-size-fits-all from this Government puts our charities in a situation where they will be much worse off. The National Party members believe that the bill is fundamentally flawed and it is not able to be remedied with further tinkering. We support the call by the majority of the charitable sector submitters for the bill to be withdrawn and the Labour Government to honour its manifesto commitment to carry out a proper first-principles post-implementation review of the Act and for it to be carried out independent of the DIA.

This original Act was brought in and introduced in 2005 by the then Labour Government. However, at the committee stage in 2004, the bill was almost entirely rewritten and then rushed through under urgency in a single day without proper consultation. Does that sound familiar to anyone? The National Party was concerned about the process then, and we are concerned about the process again.

Interestingly, the Minister has said that she’ll consider a fuller review after this bill has been implemented. Why? Why would you implement a quick bill and then do a full review? So why are we wasting this Parliament’s time on legislation that could very easily be irrelevant?

There is so much in here that has been opposed by the submitters. I see again that the submission from the Number 10 Southland Youth One Stop Shop says that the bill must have greater clarification on “what constitutes advocacy and political lobbying and what is permitted.” These charities are concerned, and it is not addressed in this bill: the issue of charities being able to advocate for their charitable purpose without fear of their charitable status, their grant funding opportunities or contracts—Government contracts—being withdrawn. That has not been addressed. The charities, in their submissions, have identified that and yet this Government has not listened to them.

This bill, we have said, is another example of unnecessary and unhelpful piecemeal changes being imposed on charities against their will. It is not a full review of it. It is nothing like it, and the DIA even confirm it themselves. We oppose this bill.

Thank you, Madam Speaker. Firstly, before I commence my speech in regards to the Charities Amendment Bill, it’s the first time I’ve had the chance to rise and extend my condolences to the Newtown community for the tragic fire and loss of lives, and to also extend my thanks for the work that the emergency services have done. It’s hard and it’s traumatic work, and I want to acknowledge them and thank them for their work.

It’s a real pleasure to rise and speak to this Charities Amendment Bill, and I want to acknowledge the Minister, the Hon Priyanca Radhakrishnan, for her shepherding of this bill. The Minister has a really long history of working in this sector, so she understands it well, and I’m delighted, therefore, that she gets to progress this bill on behalf of the Government. I also want to acknowledge our Internal Affairs team who gave us the advice; the Parliamentary Counsel Office team for their drafting; and our clerks who organised the whole running of this process so that everyone was where they should be at the time, that technology worked, and that the process ran smoothly. They spent many hours facilitating this work so our submitters could be heard. And what great submitters they were—and the submissions we received.

My thanks go to the many charities, the peak bodies, and the individuals who submitted. We received 95 submissions and heard 28 oral submissions. As a result of what we had heard, we made some really significant changes to the bill as presented at first reading. I want to acknowledge those who took the time to give us their feedback, because I think this is how democracy works. We heard the feedback, and we accordingly made some significant changes. Many of us here across the House have volunteered for charities. I myself ran a charity for five years, and I’ve also been in the service clubs, and many of us—as the Hon Priyanca Radhakrishnan said—on the select committee have had a history of service.

I can assure the House tonight that we took this bill extremely seriously. In fact, when we talk about changes that we made, there are 28,000 charities we know in the community, and one of the changes we made directly affects tier 4 charities. Those are the charities that have less than $140,000 per annum. That’s half of those charities. At the very least, 14,000 are affected by this piece of legislation, so I’m really delighted to speak to this bill. We’ve made some practical improvements to make it easier for charities to continue their work. It increases the transparency by improving access to justice and enables simpler financial reporting for those smaller charities. So these are the 14,000 charities that I’m talking about, the 14,000 charities who will have an easier or simpler process for reporting. And that is in order to reduce the red tape, it is in order to support those charities who are run often by the smell of an oily rag and who are also having, perhaps, difficulties with retention of people who are volunteering their time. So it is one of those areas where I’m particularly pleased that we were able to alter the legislation.

The bill as introduced—we’ve put in place a number of changes to that legislation. My time is running short, so I’m going to quickly run through the list of the things we heard from our submitters and then changed in the bill, and basically that is as a response to the scrutiny and the feedback from the members.

Clause 20 of the bill inserts new section 42G, requiring an annual review of governance procedures by charities. We removed the annual review and put it in at three-yearly. That was our response. The work still needs to be done. The review to ensure that a charity is performing its charitable function still needs to occur, but once every three years as opposed to annually. So we listened to that feedback.

Change two: the term “officer” was too broad. We had lots of submissions that spoke to us: was a cultural adviser an officer? Was someone who was doing tasks for the charity considered an officer? So we inserted into the legislation the term “significant influence” so that we basically ensure that there is more than just significant influence. So we said they have to have significant influence and exert powers over the strategic, financial, and operational decisions of a charity. So we define the “officer” as a person who holds that significant influence, and it is important that we did that.

There are many other things that we did in this piece of legislation. I recommend the member who resumed her seat, Penny Simmonds, has a read of the legislation and actually looks to what we have changed. It is significant. It is worthy; 40,000 charities are affected. I commend it to the House.

Thank you, Madam Speaker. I want to start my address today by acknowledging the 28,000 charities across New Zealand who make New Zealand work by supporting individuals, supporting families, supporting communities, and providing social cohesion in so many, many different ways. What the charities sector deserve when they provide over $4 billion worth of value to New Zealand is to have legislation that is workable. They deserve to have legislation that makes it easier for them to provide the service to New Zealanders that they provide each and every day.

They deserve to have a Labour Government who delivers on the promises it makes, and a 2017 election promise—

Anna Lorck: That’s right—they do. They deserve a Labour Government—they do.

Hon LOUISE UPSTON: Just quieten down, over there. You might want to listen to what you actually promised in 2017, because you promised the charities sector a comprehensive, first-principles review. That is why the charities sector—the dozens and dozens and dozens of organisations that took the time to sit before us and submit on this legislation—are frustrated. They feel let down, they feel ripped off, and they didn’t get what Labour promised in 2017.

I want to bring the words of some of the submitters to this House. So, rather than using my words, I want to bring some of their words, because these are organisations like Age Concern, who said, “Age Concern New Zealand would like to see a first principles review of the Act carried out by an independent body such as the Law Commission.” What charities want to see with that first-principles review is a revisiting of the definitions of charity and charitable purpose. That’s at the heart of what they are wanting to see in terms of this change.

The Breast Cancer Foundation New Zealand—which is particularly important this week, as I think of a dear friend of mine and a family member—also want a first-principles review. They’re concerned about the impact on charities in New Zealand of these changes. Community Housing Aotearoa: “We continue to emphasize the need for an independent review of the Charities Act. Many of the concerns our members have with regards to how the definition of charity is being interpreted has not being addressed through this amendment bill.”

Charitable organisations are incredibly frustrated. On the one hand, they have the Government, which is speaking to them through the Ministry of Social Development and through the Ministry of Business, Innovation and Employment of a relationship model to commissioning, and yet, on the other hand, Charities Services is now being seen instead as a registrar and as a regulator. So what is it, Labour? Do we trust them, or do we not? Do we want to understand and enable them, or do we not? Do we want to put more regulations in the way that prevent them from doing their work, or do we want to support their work and support them to do more of it?

This one, from Community Networks Aotearoa, represents many peak organisations such as Presbyterian Support New Zealand, the D.V. Bryant Trust, my own Taupo Council of Social Services, Neighbourhood Support, and the list goes on: “We wish to emphasise that there needs to be a first principles review of the Act. This is best done by an independent body to ensure comprehensiveness and integrity of the process and to ensure there are no conflicts of interest. We have been promised this for some years, and we believe that the majority of the Charitable Sector wish for this review.” What’s more disturbing, though, is a paragraph a little bit further on: “We would really appreciate a more positive view of the amazing community and voluntary sector. Where the first point of view is that all this extra regulation is not needed. But that this Sector is recognised and supported into a trusting and participatory environment with the Government.”

So I’m not quite sure why members opposite were laughing at that, because I do take the concerns that these people raise very seriously. They are the ones—they are the volunteers, they are the organisations—that work tirelessly up and down this country. I would challenge any member opposite to say that they don’t value their work and to actually listen to the voice of the charitable organisations who are frustrated—frustrated—by the Government not delivering what they promised in 2017.

Actually, what they then say is that the tinkering isn’t worth it, and the frustration at not having the first-principles review frustrates a sector who already operate on the smell of an oily rag. So I don’t think it was too much for them to get what they were promised delivered.

Here’s another one, from Philanthropy New Zealand—again, a peak body organisation involved in significant organisations, with over 200 members who give donations and bequests to these many organisations. They “support and advocate for the need for a first principles review of the Charities Act … as per the commitment made by the Government in its election manifesto. This would offer the chance to consider the value and purpose of the charitable sector, the value charities add to people’s lives, the environment and the economy, and how the government can best support the sector in its work.”

So it is frustrating, and I accept that the chair of the Social Services and Community Committee has talked about some of the tweaks that have been made as a result of the select committee process, but the fundamental issue is that this is not a first-principles review. Tinkering at the edges doesn’t provide the transformational change that Labour promised them. It’s one example of many, unfortunately, where what they thought they were getting is very different from reality, and many of them have actually said, “Look, just take it back. Take it back, start again. We’re patient. We want it to work. We don’t want piecemeal change, because for our organisation, those levels of changes potentially take us backwards. There’s a huge amount of work and energy and cost in implementing changes. Can we just do it properly and can we just do it right?”, which is what Labour promised and hasn’t delivered.

That is why people are so, so frustrated in the communities sector, and my colleague Maureen Pugh has been working with the community and voluntary sector for many, many years and has been hearing their frustration at the Government, because, actually, they didn’t think that they were asking for much. They didn’t think they were asking for much.

So the National Party, clearly, are not supporting this bill. We think it’s fundamentally flawed, because that is what the charitable sector have said for themselves. We’ve listened, we’ve reflected, and I’m very deliberately bringing their voices to this Parliament tonight because they don’t feel as if they’ve been heard and I think it’s important that they are.

The National Party support the call of the majority of the submitters in the charitable sector who have asked for the bill to be withdrawn, for the comprehensive review to be undertaken, and then for legislation to come before the Parliament once those issues have been surfaced by an independent review. That’s another point that I do think is important: they do want it to be independent. So, at the moment, the Department of Internal Affairs (DIA) is responsible for Charities Services. An independent review means that the work done on policy shouldn’t be done by DIA; it should be done by someone independent. The Law Commission is one that’s been suggested, and that’s what the charitable sector would be expecting.

We do actually see that piecemeal change like this produces more harm than good. For a sector where many of them—whether it’s organisations like SuperGrans, who I’ve met with tonight, or whether it is organisations working with victims of family violence—are working with vulnerable New Zealanders, we owe it to them to make it as easy as possible for them to do their work and to have a Government that delivers what they promise.

So we will be opposing this legislation. We’re opposing it on behalf of the charities sector, and we bring their voice to this Parliament tonight.

Kia ora e te Mana Whakawā. It’s an absolute privilege to speak on the Charities Amendment Bill. I disagree with the last speaker, the Hon Louise Upston. She spoke about this bill creating more harm. Well, I totally disagree with that.

I am a member of a charity, and I want to acknowledge the 28,000 charities and all the important work that they do, particularly the volunteers in charities. Like I said, I’m involved in a charity—Radio Tonga of Aotearoa—and we are all volunteers. One of the changes that submitters have told us—all 95 submitters told us—is that they wanted to ease the burden on small charities, in terms of financial compliance. I can tell the House that I have been a treasurer of the PACIFICA women’s organisation, and it takes a long time to complete all this compliance that needs to be done. So this change that we’re bringing in is allowing the regulator, allowing the chief executive, to reduce very small charities’ compliance, in terms of reporting.

Another change that we’re bringing along: when the bill was first tabled, it required charities to review their governance procedures just to see if their charitable purpose was still according to their first charitable purpose. The bill had said “1 year”. Submitters said that one year was too short, and that a lot of work needed to be done to get that submitted. So we listened to submitters. In the bill as now amended, we’ve amended it to “3 years” so that charities will now have three years to look at their governance procedures and to make amendments to that.

I want to also talk about these practical, bold changes as something that will, in my experience as a treasurer, as a secretary—and I deliberately, for one of the organisations that I am in, chose not to hold a position, in terms of an officer, because I know there is a lot of paperwork that needed to be done. So, obviously, this bill also defines the word “officer”, in terms of a charity. So even though, let’s just say, for myself, I am a trustee of Radio Tonga of Aotearoa—even though I don’t hold a position as a secretary or treasurer—I am still one person that makes significant decisions in this charity. So that will encapsulate me as one of those decision makers, holding me accountable for decisions made by the trust that I currently am part of.

What the bill does is it also enables the charities to review the decisions made by the chief executive. What that means is that there is a list—I can’t remember it at the moment; doesn’t come to mind—that also identifies that, if the regulator or if the chief executive has made a decision about a charity and removes their charitable purpose, removes their status, the charity can actually—it widens the scope for them to review that decision made by the chief executive.

Also one of the things that it does is look at the best-practice guidance, clearly defined. Lots has been said about what submitters have said in terms of the first principle, but what we did hear is that the submitters did agree to some of the changes that the bill had set out. I want to acknowledge the submitters.

Of course, I am a member the Social Services and Community Committee. I want to acknowledge our chair, Angie Warren-Clark, who does a really good job. We’re a really good committee. She enables us to have a point of view, and I think that’s what committee chairs need to do: allow members to voice their opinions. I want to also acknowledge the leadership of the Minister, the Hon Priyanca Radhakrishnan, for shepherding this bill into the House, bringing all her experiences into the House.

Again, I want to point to the fact that part of this bill is about empowering the regulator to ease financial reporting for very small charities, which will reduce their compliance, enabling them to continue with the much-needed work that they do. I commend the Charities Amendment Bill to the House. Mālō.

Thank you, Madam Speaker. It is a pleasure to rise on behalf of ACT for the second reading of this bill. ACT supported this bill to the Social Services and Community Committee because changes in this area of law are quite infrequent, and the sector has been hoping for change, as promised six years ago. The select committee did indeed provide that opportunity for many charities and organisations and stakeholders to make submissions and to get in touch with MPs throughout the process and afterwards, and I thank those that spoke to me during and following that process; it was extremely helpful.

Given changes in the sector don’t come by often, many expressed a sense of excitement following Labour’s 2017 policy and its manifesto to undertake a first-principles post-implementation review, which would, ultimately, lead to changes to the Charities Act, which could, in theory, be welcomed in the charities sector, and that those charities would be heard from throughout the process. As we’ve heard tonight, that review has not happened.

As this is seldomly looked at by Parliament, it is understandable that people will be worried that unresolved issues in this bill could be enduring and damaging to their sector. So, unfortunately, while changes do need to take place, this bill is not it, and ACT will be opposing it from here on.

So submissions to the select committee did not give me a great deal of confidence in either the process of the drafting of the bill or the depth of consultation, nor the consideration of potential unintended consequences. Many submitters who got in touch with me spoke of their frustrations. As has been mentioned by other members, the regulatory impact statement noted inadequate consultation and evidence, which is surprising, given how long these changes, or the background of these changes, have been in the works.

The role of Charities Services was also a topic of discussion. Many expressed a concern that there’s a bit too much advocacy and campaigning, perhaps even political to an extent, rather than just supporting charities with a light touch.

Another concern is that the Department of Internal Affairs (DIA) might have been a bit heavy-handed, that they might have strong-armed the process, whether that’s in their advice to the Government, their advice to the select committee, or being an overall imposition on charities conducting their activities lawfully. Moreover, some stakeholders felt that DIA officials put walls up until decisions had already been made, time and time again, making it a difficult process.

The bigger picture is that the regulatory environment is becoming more complex and more controlling, making the jobs of those in charities more and more difficult. In order to thrive and be productive, charities ultimately need less bureaucracy. They need to be able to get on with what they do best: providing essential services to the communities that depend on them—often to provide systems significantly better than the Government, I might add. What they don’t need is Government interfering too much, and this bill is a case of that, with agencies making decisions with little accountability to the charitable sector.

Certain concerns have not been addressed, notably the supposed benefits of the bill in the explanatory notes—for example, reducing financial reporting—and I just don’t buy it. This idea of reducing red tape—it just doesn’t make sense. It appears that it is distracting from the true intentions behind the scenes. New regulations don’t actually make life easier for charities, and these definition issues are still outstanding. Charities won’t thrive with the heavy-handed, unelected officials calling the shots and looking at them with suspicion from the outset. Further, I feel that the three-year review process is arguably just going to pay lip service to the DIA and not be particularly effective.

What the sector needs is a move towards more independence, including in its oversight. If reform isn’t forthcoming, then the Government should focus on the law that’s already there: that everyone in a charity has a requirement to act in good faith and for the benefit of their communities. In the absence of well-consulted and well-crafted law changes, the Government should just step back, stop trying to micromanage charities, and let them get on with doing what they do best within existing regulations. So we’re opposing this bill. Thank you.

Thank you, Madam Speaker. I rise to take a call on behalf of the Green Party on the Charities Amendment Bill second reading. I’m new to this piece of legislation, I have to admit. I didn’t have the privilege of sitting through the Social Services and Community Committee to hear the submissions, and so I’ve been trying to do catch-up. To be perfectly honest, I’m not sure I’m fully there yet. Hopefully I will be as the bill progresses. I do want to say I’ve heard two very, very different views expressed from the Government side and the National and ACT parties. And on my reading of it, it’s possibly somewhere in the middle from what I can see at the moment.

So I do just firstly want to acknowledge the important role of—the language I like is—community organisations. I find “charity” a bit slightly triggering of Victorian values and some model of the wealthy doing good to others, which I know is not inherent in it but that’s kind of the history of that word for me that I don’t like, so I tend to think of the community and voluntary sector and tangata whenua sector. They play an incredibly important role in our society. I think that has been acknowledged by everyone, and they are very, very different. It’s important that they are different because that ecosystem is the best way we have of ensuring different peoples’ needs are able to be met. And central government is never going to be able to form a relationship with people in the way that our community and voluntary sector and tangata whenua organisations can.

We’ve seen it again and again through COVID and recently through the adverse storms and the cyclones. These organisations were the people that stepped in and kept people afloat. We know from research that was launched recently around the state of the sector that they are really, really struggling at the moment. What’s come through in terms of the survey is increased stress, a sense of overwhelm around the increase in demand and need of their services and help, and no increase in funding for many of those organisations or in some cases actually a reduction in funding. And the kind of complexity of the issues that people are struggling with has just changed fundamentally from what it was 20 years ago, and people are desperately trying to keep up. They are way more nimble than Government agencies can be in terms of being able to do that response, but the staff in the organisations are really anxious and stressed at the moment.

I hear from the Government members but actually leaning in on the point that this legislation provides the ability for the chief executive to offer an exemption on financial reporting for those smaller organisations. I specifically want to talk to the value of those smaller organisations, and particularly we know that Māori organisations often have struggled to build the relationships and get the funding from central government because of the compliance involved in the application process and the red tape. But yet they’re the ones that hold the most precious relationships, right? I’ve heard, actually, in another jurisdiction, somebody who was a commissioner overseeing all the family violence work who pointed out that in their view what they saw was that organisations who were competent and able to win tenders for funding contracts were the least competent and capable in delivering the change that was needed.

So this piece of legislation, actually, is part of that puzzle, because we have professionalised our expectations of the community and voluntary sector in a way that has privileged large organisations. It’s interesting, really, hearing from the National Party in terms of this bill when they have been so complicit in that process over many years of starting to privilege more and more larger organisations, wanting to deal with fewer organisations because that made Government’s job cheaper and easier, and now to hear them singing the praises of the smaller organisations and the need to listen to them was kind of jarring for me, to be honest, but maybe they’ve learnt—maybe they’ve learnt! Ha, ha! That would be nice.

So I do want to say: so this enabling the exemption around financial reporting is a positive thing because that helps get those organisations to be able to build that relationship and recognise the value of that work. However, giving the charities commission the ability to review, and requiring agencies to review their governance structure every 3 years—I’m not convinced that that helps us get to that place around enabling organisations to do things in the best way for them and not building more compliance on.

I do want to acknowledge as well that from the submitters the very strong call—and I suspect it’s jarring for the Government members, but that point about a lot of the submitters calling for the delivery on that first-principle review, and that’s because, in particular, the way our legislation is set up and its relationship with advocacy is deeply problematic. We’ve increasingly had analysis coming from the community that we’ve been imposing kind of business models that work in the corporate sector on to tangata whenua and community and voluntary sectors that have traditionally had very, very different ways of working that actually are not improved by imposing corporate business models.

Actually, being able to see a need and respond in partnership with others with far more flexibility—and I point to, I think, an op-ed by Denis O’Reilly talking about some of the experiences in the 1970s and the comparison to now for people who are wanting to think about some of those issues. I’m not harking back to the 1970s, I can’t remember them myself. Ha, ha! I certainly wasn’t working in the sector back in that day. I may look like it some days! But I do think he makes some good points and there is an increasing kind of sense of need to critique the control from central government of community organisations and asking “Is that helping them to do what they need to do or not?”

Also Social Service Providers Aotearoa—to pick up from their submission. They were centring the importance of that review actually fully embedding Te Tiriti o Waitangi at the heart of legislation, governing the practices of charities in Aotearoa New Zealand and to ensure Treaty principles are integrated within charities legislation. That is something that the Green Party would really support, and it is a shame that after this time we’re not at that point at the moment. I do call for the need for that work and to go back out to our communities and get to kind of the heart about how can the sector thrive and what support can we offer to ensure the sector thrives, as opposed to how do we ensure compliance and confidence in terms of people donating money. That doesn’t feel to me like that’s the central question. The central question for the Greens is: actually, how do we support these organisations to do the incredibly important work that they do, and that to be front and centre? So, on that note, we are supporting this bill.

Thank you, Madam Speaker. Charities bring people together who want to make a difference, who, through a whole range of initiatives, can come together and support things that need good volunteers. Never have I seen more of this than in the past 12 weeks in Hawke’s Bay, where charities have played a huge role in helping people through Cyclone Gabrielle. Just last Friday night, I went to Nourished for Nil, which is a charity that started back in 2017, where I was there the very day that they started. They repurpose all the food and give it out so it doesn’t go to waste. On this Friday night, there were 300 food boxes given out—a regular Friday night—and there was an amazing team from the 80-strong volunteers who were working the distribution network on this Friday. It just showed what can be enabled through having a vision and a purpose and bringing a lot of people together. Now, many of these volunteers are retirees who want to be kept connected and doing something good for their community.

Earlier that week, I had another opportunity to go and visit Christian Lovelink. Christian Lovelink delivers household goods to people in need, and during Cyclone Gabrielle they have now repurposed donated household items to refurnish people who needed new homes or temporary accommodation to go into since being displaced. These are just two of examples in Hawke’s Bay alone of the many, many charities who work very hard, and they need to have legislation that also enables them to do their work well.

Now, this bill talks about getting rid of red tape, and a lot of it is practical support that can be given to smaller charities. It’s those charities that sometimes can get bogged down in much of the bureaucratic stuff that can hold people back. So I think, from having listened to the many speeches tonight, that the practical changes that are being made in this bill are worth it, and I’d like to again say thank you to all the charities and all the volunteers who give so much to make a real difference in the work they do for others. Thank you, Madam Chair.

Simon Watts—five minutes.

Thank you very much, Madam Speaker. It’s a pleasure to rise to talk on the Charities Amendment Bill second reading. We’ve transcended a number of perspectives this evening in regards to this legislation, starting off with the Minister for the Community and Voluntary Sector, who articulated a very positive and optimistic overview in terms of the select committee process that can only be described—listening to the contributions from the Hon Louise Upston and my colleague Penny Simmonds—as being on another planet. Because the reality is, when you read the responses provided by the charities that made submissions on this bill, the narrative that we are hearing in the House from the other side in regards to this bill could not be further from the reality.

And that is a great shame, because the charity sector is a significantly important sector. The member for Tukituki, who just outlined the role which they have and continue to play in the Hawke’s Bay, is absolutely right: they do do that. Before coming to Parliament, I had the pleasure of sitting on the Diabetes New Zealand trustee board, overseeing Diabetes New Zealand and the role which they play across our communities, across this country—and, as we know, diabetes is a significant illness that impacts a huge number of individuals, whether they’re type 1 or type 2. But what I saw in that role as a trustee, at a national level but also in the Auckland branch, was the huge amount of contribution and outcomes that the charitable sector do provide to our communities.

It is without doubt that the charitable sector have the ability to open doors that no other agency, whether it’s central or local government, can achieve, and they do so quite simply because they understand the people which they support. Many of the people who volunteer on these charitable organisations have a life experience or have an association, or may also have a disease or illness, for which the charity stands. And with that knowledge and understanding, they have the ability to connect with our communities in a way which derives significant value and gets better outcomes. I can only hope that we really leverage what I see as untapped potential in the charitable sector more, and actually see them alongside the delivery of core services to our communities at the same level at which we often place our central government agencies and others. I think there is a significant role for them to do that.

The challenges, really, in this bill, which have been widely canvassed, relate to the fact that the bill as it stands is not fit for purpose. It is not going to deal with the underlying issues that the charitable sector themselves made submissions back to the Social Services and Community Committee on. It is a great shame when our democratic process does not enable the provision of the feedback being correlated and translated into an improved bill.

Hon Member: Have a look at the changes we incorporated.

SIMON WATTS: I can hear some comments coming from the other side. Maybe they were part of the select committee. I doubt it, because if they were, they would know that exactly what I’m saying is actually the reality.

Hon Members: Have a look at the changes we’ve incorporated.

SIMON WATTS: And you can hear them continuing to talk, can’t you? You can hear them continuing to talk there, can’t you? Very, very interesting, when we reflect back on Hansard, what those comments were. But they will be in writing, now that I’ve referenced them.

So I think we need to reflect on what needs to be done, and that is a proper review of the sector, following through with what the sector has been calling for, ensuring that we do take a genuine approach in order to make improvements in regards to this bill. A future National-led Government will no doubt pick up the pieces of the failure by this Government to make meaningful change in an area and a sector that is so critically important to our country’s success and which I think epitomises the best of our country in regards to the people who play in that. I think it is very disappointing that this evening we are passing a bill that will not deliver value and outcomes for our communities, but I am in hope that in 155 days we will see a change in Government and we’ll have an opportunity to put this right. Thank you, Madam Speaker.

Kia ora e te Māngai o te Whare. It’s a pleasure to stand and take a call on the Charities Amendment Bill. I hope you will indulge me if I first acknowledge the terrible hurt that is currently being felt in my community as it is the community of Newtown. As the MP for Whangārei, I want to acknowledge my people who have lived, in the last four weeks, through the loss of four of our young people. I want to acknowledge the whānau. I want to acknowledge our extraordinary first responders. I have to say, at this moment, my town is submerged in grief. And I want to particularly acknowledge at this moment the community of Raumanga and of Ruakākā. Raumanga were the first to lose a young person, and Ruakākā are the most recent, and the weight of that grief is very heavy on my people at the moment.

And it is some of that grief that charities in our community will be helping to alleviate—charities like the Bream Bay Coastal Care Trust, charities who, as my colleague and friend Angie Warren-Clark remarked, live on the smell of an oily rag. I grew up on the back of such a charity. My mother opened the Miriam Centre, a child abuse and family crisis centre, about 35 years ago, and I quite literally grew up between my mother’s back office and my father’s back office in the family law firm down the road. I know how hard it is for these small organisations to manage the regulatory responsibilities they have while they are trying to do the mahi in the community. It is not necessarily in the skill set of those running a charity, who are trying to get out and do the work of helping people and raising them up, to have to bear the weight of regulation and reporting. These are charities, and as my friends and colleagues have said, about half of them are the small ones. About 14,000 of the 28,000-odd charities we have in New Zealand are the small ones, and it is difficult for them to bear the regulatory load. And that is where this bill comes in.

Now, I’ve heard, again and again through the night, the criticisms coming in from the Opposition. I guess when you’re not in the position of having to do stuff, it’s very easy to throw stones. But the point is we are trying to do something, and as a wise person once said to me, the enemy of getting anything done is trying to get it perfect. Never let the fact that something is not all-encompassing bells and whistles stand in the way of the fact that it is a darn good thing that will make multiple important changes.

I want to thank the officials for the work they put in—as a member of the Social Services and Community Committee, I saw the blood, sweat, and tears they put into this bill—and, most of all, the submitters who made so many good and helpful suggestions, which we have done our best to incorporate. I want to point out to all of them that when we did our work, we did it with a deep understanding of the difficulties, the real-life struggles of running a charity. When you have, as your chair, a woman who ran Women’s Refuge for about nine-odd years, when you have Anahila, who has also been involved in charities for more years than I can count, and when your Minister herself is a member of so many charities, believe me, you have the depth of experience with which to work.

So the things that, very briefly, we are doing here are to remove regulation. They will reduce the reporting requirements, they make it easier to seek legal redress without having to go to the High Court, and they do a range of things that will make a real, tangible difference to the work of people who are incredibly necessary to our community, to my community. I look forward to taking Angie Warren-Clark and Minister Deb Russell to several of them next week to talk about the important work of charities in my community, and we will be able to talk to them about the improvements we have made to their work. I commend this bill to the House.

Thank you, Madam Speaker. I’ve enjoyed hearing the speeches, albeit some in debate, about this particular bill before us this evening.

Charities are a core component of a well-functioning society, and when I think about my community on the North Shore and Northcote and Beach Haven and Birkdale, I think about the number of voluntary, charitable organisations that do the hard work on the ground. I look back to the work that was completed over the COVID-19 pandemic, the groups that got out on the ground, delivered food to families in very difficult circumstances, and who helped vaccination sites across the country lift our immunisation rates. I think about the people in this room, and just looking at my colleagues, not only do we have people that have worked voluntarily in their church organisations, we mentioned Women’s Refuge, in chairing community houses, in community justice organisations, and in local marae. We certainly have a good wealth of experience of not only people that have run charitable organisations, managed them, but also acted as volunteers for many, many years.

I have the privilege of chairing the Birkdale Beach Haven Community Project. Our core line of business is about running facilities that are available for community groups for free, in most circumstances—for young people and children to come and host events there, for mums’ groups to come and meet there, for our new migrants to share in Aotearoa New Zealand experiences. Those are the hubs of our community. We also do the outreach, of course, and I think to a major project that our organisation runs, which is Community Eats, which focuses on the redistribution of kai across the community, both in those that are giving and those that are distributing back out to the community. Those are the types of initiatives that we want to enable and we want to support.

But I know, as the chair, in a very detailed way, the heavy load that our small team carries in order to both deliver the work that they need to on the ground but also maintain the administrative and operational background that they need to and the challenges of sometimes complex situations, to manage the regulatory expectations and the compliance expectations of both funding of council, so on and so forth, not to mention the charitable responsibilities that they have under what is the current Charities Act 2005.

Now, we know that the sector overall is incredibly diverse, it’s nimble, and about 28,000 organisations are registered nationally. My understanding, from the information that I have read, and I wasn’t a part of the select committee hearing, but of that 14,000, effectively half of that will benefit from the changes that we make through this legislation this evening.

This bill includes the provisions to enable reduced financial reporting requirements for very small charities, just like the ones that I spoke to this evening, to mitigate the compliance burden; to clarify who an officer is and their role; and measures to improve the governance. It is very challenging, in many small organisations, to establish good governance groups, people that are prepared to do it on a voluntary basis and able to mostly commit the time that is needed to make these organisations effective.

The bill will also clarify and improve compliance and enforcement under the Act and increase the transparency and fairness of regulatory decision-making by the Chief Executive of the Department of Internal Affairs and the Charities Registration Board, and, lastly, to introduce a similar appeals mechanism by empowering the Taxation Review Authority to hear appeals under the Act.

This piece of legislation makes steps to lifting some of the compliance responsibilities on 14,000 very small charitable organisations. Let’s be charitable this evening to them. Let’s lighten some of their workload. I’d like to commend this bill to the House.

Thank you. I rise and address the House as the last speaker for the National Party, in opposition to this Charities Amendment Bill. Before I move on to speak to the specifics of the bill in the debate this evening, it is appropriate to acknowledge the deceased of Loafers Lodge here in Wellington, their families, the first responders, Fire and Emergency New Zealand, the police, St John Ambulance, the hospital workers, and also those charitable organisations that have mobilised around that community.

Secondly, I also acknowledge those acknowledgments that have been made in the House this evening in terms of tragedies that have occurred in the local communities that we all come from. Cyclone Gabrielle, the adverse weather events, the recent death of the young man up in Whangārei and the other young persons, and also acknowledging, again, the efforts and charity of our charitable organisations and communities that mobilise and wrap around in support.

My third acknowledgment this evening, because those earlier ones have tended to address a socio-economic demographic of our most vulnerable communities—I now move to acknowledge the other end of the spectrum: Dame Rosie Horton, who gave a lifetime of service and commitment in the charitable fundraising philanthropic area of her life. She died earlier this week and it is appropriate to accordingly acknowledge her for her service, because the contribution that was made there meant that there were many in those most vulnerable communities who benefited from her efforts.

I now turn to address the bill and the debates in the House this evening. When I spoke to this bill at the first reading on 28 September last year, I commenced my speech by stating, “charity begins at home”. It’s really important that the Government take heed of it because the meaning of “charity begins at home” is that those in a position of responsibility first and foremost address the very people that they are meant to care most about. Earlier in the debate this evening, my colleague Penny Simmonds, as the first speaker for the National Party, spoke very forthrightly and robustly. However, I heard from the Government benches nothing but a rabble raucous retort of what is rational debate. Such behaviour and conduct is uncharitable. We need to focus, importantly, on the substance of the debate, and not target the debater.

So I turn, now, to the bill. This bill came before the scrutiny of the Social Services and Community Committee. It was introduced into the House on 21 September last year and then referred to the select committee on 28 September. The Minister Hon Priyanca Radhakrishnan was invited to provide an initial briefing to the committee on the bill, and she did so on 9 February 2023. Submissions were called for and there was only a month for those submissions to be made from a sector that represents 28,000—28,000—registered charities. Now, those are registered charities—there are numerous other charitable organisations that aren’t registered, so we’re looking much wider in scope. There were 95 interested groups and individuals who made submissions and oral evidence was heard from 28 submitters in Wellington.

Now, what’s been very interesting is some of the contributions from the Government benches this evening. I have found it rather patronising when we hear that there is a Minister and perhaps three other members of the Labour Government sitting on this select committee who come from the experience of working in this sector. I certainly acknowledge that, but that should not displace the views and the representation of those 28,000 registered charitable organisations in this country as having lesser meaning, effect, impact, and substance—and that is, effectively, what this Government has done.

The National Party has filed a minority view, and the substance of that minority view is premised on the views of those submitters representing the majority of those 28,000 registered charitable organisations and many non-registered charitable organisations. So the National Party, again despite some of the contributions from members in the House because of political orientations that go with it—what I emphasise in this House this evening is that the National Party take heed and listen to the sector most affected and most impacted by legislation that comes before this House.

Submissions: written and oral. I quote Sue Barker, who is a specialist charities lawyer and member of the core reference group for the review of the Charities Act. “The Government has no mandate to pass this Bill. The Bill represents a broken manifesto promise”—heard that before—“and does nothing to meet its stated objective to ‘support charities to continue their vital contribution to community wellbeing’ … It is a sad indictment on our democracy that policy”—in other words, the Government officials from the Department of Internal Affairs who have driven the shaping, the structure, the content of this Charities Amendment Bill, that their advice has been accepted “without critical examination”. So “It is a sad indictment on our democracy that policy is effectively being set by an unelected and largely unaccountable bureaucracy, while the fundamental concerns that the vast bulk of the charitable sector are consistently ignored.” So important that the public is aware of this—“a sad indictment on our democracy”. This is something that New Zealand has experienced time and time again from this Government, and here we have that again repeated in this Charities Amendment Bill.

My colleagues have addressed those members who were on the select committee, which I wasn’t on at that time—have addressed the detail of the bill. There’s a significant section within the Charities Act itself that is not being addressed within this amendment bill: section 5, which is the very definition of charitable organisation—what is a charity? That has been totally dispensed with.

So the other point that I make is that not only were there those 95 written submissions, 28 oral submissions, there had been extensive public consultation in 2019 with engagement of 1,200 people at that time—the online presentation was viewed 650 times and there were 364 written submissions at that time. Again, the feedback from the community: those persons representing and advocating for the 28,000 registered charities in New Zealand, their views were dispensed with because it would seem that the Minister and those members from the Labour Government sitting on the select committee—where the select committee is weighted heavily in favour of the Government, who has the majority say and rule on this—know better than the charities sector of our country. Disappointingly, this bill is going to be passed into law dispensing with the very views of those people who know better—who know best, actually—than this Government. It’s on that basis that the National Party opposes this bill. In conclusion, I do not commend this bill to the House.

Thank you, Madam Speaker. So from budget advice, to animal rescues, to environmental clean-ups, it’s really hard to imagine our communities without charities. And I think it’s really important that they just get on and do what they do best. I think about the work that charitable organisations did during COVID down in Southland. I think it was the really strong connections that they had with the community that meant that they could support so many people with welfare checks, providing food parcels, and making sure that everybody was connected with the services that they needed. But being a registered charity also confers significant financial benefits, and so it’s really important that transparency is retained. And so what this bill does is it makes a number of changes that will ensure that charities can get on and do what they do best, but also be still publicly accountable.

I really want to acknowledge the people that made submissions on the bill. So the Social Services and Community Committee heard 95 submissions and 28 oral submissions, and, as a result, as a committee, we did listen to the advice that those submitters gave us, and we’ve made a number of really practical changes. I just want go through maybe two or three of them. I think the first one was a lot of the submitters raised an issue with the bill, where there was a requirement that charities review their governance procedures annually. I think the point there was to make sure that those procedures meant that the charities were still able to achieve their charitable purposes. But what submitters told us was that annually was too much, and, in particular, for those that were small charities and relying on a handful of volunteers. So, basically, the committee listened, and what we recommended is that that be changed to at least once every three years to give them that time to be able to do that.

One of the other things that people talked about was the definition of “officer” in the bill, and the fact that it was too broad. So the original definition was anyone who is able to exercise significant influence over the management or administration of the entity. I think what submitters were saying there was that that was a bit too vague, and some of them were concerned that if you had people that were volunteering for the charity, they may be put off because they might have thought that they inadvertently might get caught up in the responsibilities that came with that definition. A number of people also raised that in terms of the implications for cultural advisors. So, again, as a committee, we listened to that, and we recommended changing that definition and making it much more defined and tight.

So what we recommended changing it to was someone who holds a position within the entity and is able to exercise significant influence over substantial decisions, but also, including in that definition those that had some delegated powers that otherwise would have fallen on the trustees, board, or governing body of the entity. I think the stance is that by making that much more tight, that would get away from a lot of those concerns that those submitters had.

We also recommended a few other changes, and one of them was expanding the range of decisions, made by the chief executive, that charities could object to or appeal, so that that was broader, so that charities, if they disagreed with something, had a wider range of options in which they could make that appeal.

So I think what we’ve done is we’ve made some quite practical changes there that mean that charities can get on and do their work, but making sure that they’re still accountable.

I think, just before I finish, I would like to just thank charitable organisations for the work that they do. I’m just thinking through the impact. Many in communities down south and across the country rely on charitable organisations at some of the most difficult points in their lives, and so charities are making sure that people can access things like food parcels, budget advice, counselling services—you know, their work is absolutely vital. But I also think, from an environmental perspective, the work that some of those organisations do down in Southland, in terms of organising beach clean-ups, thinking about the predator control, so that we’ve got our unique biodiversity, and all that native tree planting. There’s a lot of work that charitable organisations do, so it’s really important that we have legislation that’s fit for purpose and that can let charitable organisations get on and do that while still being accountable. So I’m very happy to commend this bill to the House.