The government has announced that it will indefinitely postpone the review of the Charities Act which had been agreed to with the community and voluntary sector and which was to commence next year and conclude by 2015.
Minister Jo Goodhew said that one of the main reasons for her decision was because of the ‘continuing constrained fiscal environment’.
But the postponement of the review is really much more likely to be about that long standing and gnarly issue of advocacy.
Community organisations already spend much of their time advocating. They shouldn’t be excluded from getting charitable status (and tax exemption) because of this. Organisations of long standing repute including the National Council of Women have been denied charitable status on the basis that advocacy is their primary purpose. Advocacy is not currently deemed a ‘charitable purpose’ under the Act, and therefore they are denied tax exemption for donations.
While Greenpeace has in the last couple of days won its case to have its charitable status reconsidered, and that in itself is a great step forward, it hasn’t won its case yet. I know of other charities that are still being excluded and it is a further insult to the sector to now be told that the review may simply never happen.
The Minister has said herself that the government is frightened that if advocacy is included as a charitable purpose that it will reduce the tax take, the logic being that commercial entities currently not able to register for charitable status will set up dodgy ‘advocacy’ fronts in order to secure tax exemption.
I would make two comments about that:
1) If advocacy is included in the Act as an ancillary (i.e., secondary, rather than primary) purpose then this would preclude such groups from registering
2) In postponing the review, the government has missed the chance to address the issue of dodgy outfits who have already set up charitable fronts and are already benefiting from tax exemption, and weed them out.
On the back of the government’s announcement I have drafted a simple Private Member’s Bill to write advocacy into the definition of charitable purpose in the Charities Act as an ancillary purpose. I’ve been holding off for ages because I kept hearing that there would be a review and this would be the main focus of it.
Private Member’s Bills are drawn by ballot every few weeks when the House is sitting. I would like to extend an invitation to my colleagues in the tangata whenua, community and voluntary sector to let me know what they think about this proposal and to please let me know if they can see any problems or fishhooks associated with this idea.
The first member’s ballot for 2013 will be around the 13th of February, so we have the summer to consider this. If people or organisations have thought or comments, please feel free to email me at email@example.com.
Nga mihi nui ki a koutou