Lost Opportunity for Charities looming
Author: Garth Nowland-Foreman, LEAD Director
The Charities Amendment Bill slipped into Parliament for its first reading on the last sitting day in September, and has now been referred to the Social Services and Community Select Committee.
Submissions to the Select Committee will probably be the last chance to influence this Bill. The deadline for submissions is 10 November – giving charities (and potential charities) just over 3 weeks to have a say. This does nothing to allay concerns about seriously inadequate consultation to date, on an important piece of legislation crucial for civil society in this country.
It is disappointing that the Bill, in a process dominated by officials from the Department of Internal Affairs (DIA) – the government department responsible for overseeing registration of charities - has failed to pick up most of the comments and concerns of the sector.
Sue Barker, with support from the New Zealand Law Foundation, undertook extensive research on what the world-leading framework of charities law would look like, Focus on Purpose (2022). A copy of her full research is available here: Barker, Sue --- "Focus on purpose - what does a world-leading framework of charities law look like?" [2022] NZLFRRp 3 (nzlii.org)
Despite the misleading rhetoric around the Bill, purporting to “modernise” charities, Barker’s analysis is that the proposals will do nothing to benefit New Zealand’s communities. They are more likely to act perversely, to preclude the real issues from being addressed. She notes that even the DIA’s own regulatory impact statement speaks of inadequate consultation, inadequate problem definition and a lack of evidence to support the proposals. Some of the proposals have not even been consulted on at all.
While there are some positive changes, the crucial problem is often what is missing. The biggest price to be paid if this Bill is passed is its opportunity cost – the lost opportunity for a real modernisation of charities, their definition in the 21st century and how best to support them. Barker is particularly concerned that the proposals are nothing more than a power grab by DIA (this is what happens when a government department is tasked with reviewing itself). Almost every issue of concern raised by the charitable sector has been taken off the table. Worse, if the proposals are passed into law, experience indicates it will be decades before they are able to be turned around, if ever.
Right from the beginning, the review that led to this Bill was specifically prohibited from looking at updating the definition of charitable purposes in a changing world, tax exemptions, the broader not-for-profit sector, and issues of advocacy. Furthermore, Charities Services (which stay as a government agency) will continue to make most of the decisions, not an independent Board. In practice, the Board remains insufficiently distanced from Charities Services, to exercise the independent check on decision-making originally intended.
It is disappointing and perhaps an indicator of the insufficient regard for our sector in social and economic well-being that this would be the best Parliament could come up with, despite a perfect storm of a pandemic, a cost-of-living crisis, a “Hunger Games” contracting environment, and so many other challenges. It is crucial that the sector does not accept this. Please ensure you put in a submission on the Bill before 10 November. Further help will be available from LEAD on what you could include in such a submission.
Contact info@lead.org.nz for more information