Hon Dr Michael Cullen
Deputy Prime Minister, Attorney-General, Minister of Finance, Minister for Tertiary Education, Leader of the House

1 February 2007 Speech Notes

Embargoed until: 12.30pm
Helping charities to help others

Speech notes for launch of the Charities Register, Grand Hall, Parliament

Kia ora, Talofa lava and warm pacific greetings.

- My ministerial colleague Luamanuvao Winnie Laban - Minister for the Community and Voluntary Sector and the minister responsible for the Charities Commission,

- Charities Commission Chair Sid Ashton and the members of the Board who have worked hard to establish the Commission and bring us to the day when we open the register,

- Kaumatua – Sam Jackson, Bishop Walters and Commission chief executive Trevor Garret - thank you for your welcome,

- Father Burns and delegates from the charitable sector for whom today's proceedings are a significant landmark

This is an important day for the charities sector.

On any Saturday tens of thousands of New Zealanders are at work in their community in foodbanks and on fields, in halls and clubrooms, on harbours and in cultural groups, in offices and outdoors.

They're there again on any Sunday, giving their weekends, their skills and their care to their communities.

And they're there all through the week in hundreds of activities, in every corner of every community.

More than a million kiwis in some form or another are involved in voluntary work.

And all these people and all these groups and all their work have a single common theme - their objective is to strengthen the community.

They are simply working for the good of others, for the public welfare.

For some of us there is a moral duty to help others and make a difference to our physical and social surroundings.

Many others simply enjoy the society we have when we care for one another and give something to our greater good.

It's worth thinking about these motivations.

We have a duty to feed and clothe our own children - but what about our obligations towards other children? Those who don't have someone who can help them.

Our obligation to help others is so strong we formalise it through the state.

But we also recognise there is a special quality beyond the obligatory, where a contribution makes a difference even though there is no coercive or specific requirement to help.

This special quality is charity.

And in every culture and every age we have recognised and valued charitable activities.

Recognition is more than words; it is a matter of practicality - for example, we recognise charitable giving in the tax treatment and in the regulation of charities.

People will always decide for themselves how much they can give and what they want to give to.

But once the state's regulation and tax powers are in the picture, there is an obvious need to be clear about what a charity really is.

We also need to set the bar recognising that if rules are too onerous we could penalise or deter charity and risk diverting resources from the public good to compliance activities.

If we set the bar too low we risk loss of confidence in the sector and the potential loss of contributions from worthwhile causes

So it's a matter of balance.

In 2000 the government weighed the issues in a review of the tax treatment of charities.

There were hundreds and hundreds of submissions and a groundswell of support emerged for a system of registration, reporting and monitoring.

In 2005 a new Charities Act resulted, setting up the Charities Commission... and today we are here to launch the register.

The Commission will improve the sector’s transparency and accountability and therefore boost public confidence.

Charities will have to be registered if they want to be eligible for tax exemptions from 1 July next year.

To be registered, charities will need to have income charitable purposes - these are defined as:

- Relieving poverty,

- Advancing education,

- Advancing religion, or

- Any other matter beneficial to the community.

And they also have to provide a public benefit.

Every application for registration will be assessed case-by-case using the test set out in the Charities Act.

I want to stress this because there was a lot of comment on the subject last year: "Charitable purpose" will be decided by the purposes set out in the entity's rules and its activities.

Charities can be sophisticated multi-national organisations backed by brands, capital and mangement resources...or tiny community groups with little resource other than energy and good intentions.

But if their primary activities are about the benefit of society, they will be charitable, and when actitivies move to other fields other models are better.

Some of you here today contributed to the work developing the Commission and register from the beginning and I would like to thank you for your efforts.

I was involved with the earliest work and I know the dedication of those involved.

It's ironic that many people had to take time away from more direct charitable activities to participate.

They did so in the confidence that a better system would benefit charities overall.

The establishment of the Charities Commission and the launch of the Charities Register repay your confidence and mark the beginning of a new era for charities.

New Zealanders are generous supporters of charities, and we receive a return for our contributions, too.

For every dollar provided to a voluntary agency, between three and five dollars worth of services are delivered to the community.

When we think of making a contribution in future we will know with greater confidence that those seeking our support meet proper standards and can be trusted.

This new beginning is not the end of our work in the charities sector. This is an exciting time for the sector and there is a lot going on.

One example I should mention is the discussion document launched last year by my colleague the Minister of Revenue, Peter Dunne, as part of his party's confidence and supply agreement with the government.

It outlines a number of options.

Ideas include raising the cap on charitable donations, increasing the rate of rebate, tax rebates for volunteers and other non-tax initiatives.

Submissions on these were received in November last year.

The government hasn't yet digested them, so I can't yet give you a steer on the likely outcomes.

I can tell you any changes will be included in this year's tax bill in May and would take effect from April next year.

Whatever lies ahead, advances across the sector will be easier once this new register is operating.

Registration will improve public confidence.

Potential supporters will be able to go to the register to find detailed information about registered charities and the way they use their resources.

The data available will help to develop better policy affecting the sector.

And the pubic can be assured that the Charities Commission will operate independently from the government as an Autonomous Crown Entity.

Charities appearing on the register will be genuine charities.

This initiative recognises the unique and vital work of the sector and its contribution to sports, arts, culture, faith communities, social services, health, human rights, conservation and the environment.

Initiatives like this come about through a lot of hard work by many dedicated people.

Today we celebrate and acknowledge this milestone.

I congratulate the Charities Commission on getting the Register developed and operational.

And I have much pleasure in formally declaring the Charities Register open.

ENDS

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