Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Dunne: Not-for-Profit Special Interest Group

Minister of Revenue
Hon Peter Dunne

Address to the Not-for-Profit Special Interest Group
(Wellington Branch)
New Zealand Institute of Chartered Accountants
Embargoed to 12.30pm, Tuesday 22 May 2007

Budget 2007 announced a number of positive developments for the charities sector, all aimed at laying a stronger foundation for charitable giving in New Zealand.

The changes recognise the importance of charitable giving to our social, cultural, environmental and economic wellbeing in New Zealand, and the important role charitable organisations play in delivering the services we need to make a positive difference in our communities.

As you know, the changes are the result of the Confidence and Supply agreement between United Future and Labour, which called for the development of a new rebate scheme for charities. I am delighted we have this opportunity to make a significant contribution to the charitable, community and voluntary sectors in New Zealand.
To recap briefly, the main points announced in the Budget and which are included in the May tax bill now before Parliament are:

* Removal of the current caps on the dollar amount of charitable donations that are eligible for tax relief. This means that individuals, companies and Māori authorities will be able to claim rebates and a deduction for charitable donations up to the level of their annual net income.

* Individuals will no longer be restricted by the $1,890 limit for tax rebates, which will encourage those who are already donating substantial amounts to donate even more generously. For the same reason, the 5 percent limit for tax deductions for companies and Māori authorities is also being removed; and

* The company deduction is also being extended to unlisted companies with five or fewer shareholders.

Once enacted, the changes will come into effect from 1 April next year.
As a package, they represent a significant and radical departure from the previous policy approach for developing tax incentives for promoting charitable giving in New Zealand.

That approach was based on incremental changes to existing tax incentives for donations, while at the same time, maintaining limits on eligibility.

However, we recognise that charitable giving is not just about removing the rebate limits. It’s about making it easier for people to give both their time and their money – and there are several ways we can approach this.

A number of different approaches were advanced in submissions following the release last October of the government discussion document, Tax incentives for giving to charities and other non-profit organisations.

As you may recall, the discussion document was supported by a series of consultation workshops held around the country and attended by 300 participants.

* A total of 229 written submissions, from a wide range of people and organisations, were received on that discussion document.

* Those submissions, and the views expressed during the consultation workshops have been summarised in a 70-page document which will be available on Inland Revenue’s Tax Policy Division’s website from today.

* Feedback from this round of consultation strongly supported substantially increasing the current tax relief available for charitable donations and introducing other mechanisms for delivering tax relief.

One possible approach put forward is the concept of payroll giving.

* Payroll giving is well accepted in other countries – such as Australia – for its simplicity, convenience and effectiveness in promoting charitable giving; and

* It has the potential to increase donation levels and establish partnerships between government, employers and charitable organisations.

However, before introducing payroll giving in New Zealand, detailed consultation is required to ensure that this approach does not raise excessive costs for employers and is easy to administer.

For this reason, a discussion document is planned for release in November this year, which will look at the implications of introducing payroll giving, and seek the views of all those concerned.

Feedback from the discussion document released last year also indicated that while tax incentives may not be the complete answer to encouraging people to donate generously, a tax system that is generally supportive of philanthropy is viewed as beneficial.

For that reason – and in recognition of the substantial contribution that charities and other non-profit organisations make to the community – further work will be done to streamline the tax treatment of volunteers’reimbursement payments and honoraria.

Feedback from consultation highlighted this issue as a longstanding problem that should be addressed as a matter of priority.

I hope to be able to include any resulting changes in a taxation bill to be introduced in November.

Further work will also be carried out on a range of other mechanisms for delivering tax relief on charitable donations, including :

* the deductibility of non-monetary donations; and

* the possibility of a gift aid-type scheme where the tax benefit goes directly to the charitable organisation rather than to the donor.

I am aware that the issue of refunding imputation credits to charities is of particular interest to this group.

As noted in the 2006 discussion document, this issue is being examined separately as part of a wider review of imputation credits, and who should be entitled to use those credits.

With the immediate Budget work now behind us, the government will be putting together its tax policy work programme for the coming year, and it is anticipated that this issue will be up for further consideration.

Thank you.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Ardern Speech: Justice Summit Opens

If we want to talk about an effective justice system, we shouldn’t start with a discussion about prisons, but a discussion about New Zealand...

We believe in a ‘fair go’. We are fair minded and like to give people a chance. Ensuring everyone is treated fairly is part of the fabric of our culture.

And equally, we are defined by what we don’t believe ourselves to be – and we certainly don’t feel like the kind of place that would have one of the highest incarceration rates in the western world, and yet we do. More>>


Christchurch Quake: New Red Zone Payment For Uninsured

The Government will pay former residential red zone owners 100% of the 2007/08 rateable value for uninsured homes, Minister Megan Woods has announced today. More>>


Gordon Campbell: On MP Pay And The REAL P.C. Danger Zone

There has never been anything remotely credible about the way parliamentarians would paint themselves as the helpless victims of the Remuneration Authority when it came to their pay increases... More>>


Repatriation: Remains Of NZ Service People Return Home

Prime Minister Jacinda Ardern and Minister for Veterans Ron Mark say they were honoured to be with the families of service personnel as they welcomed their loved ones home. More>>


Cop Shop Top-Up: 1800 New Police Through NZ

Police Commissioner Mike Bush has today confirmed further details around the allocation of the 1800 additional officers, following a $298.8 million increase for Police in Budget 2018... “These 1800 officers, alongside 485 support staff, will really enhance our work to keep people safe, and ensure they feel safe,” says Mr Bush. More>>


Human Right Commissions: Concern On Aged Care And Consent

A new report published by the Human Rights Commission raises concerns about the legal and human rights safeguards for an estimated 5000 elderly New Zealanders in secure dementia units and psychogeriatric facilities. More>>


Greens AGM: Leadership Stands Firm On Waka Jumping Bill

The Green Party leadership have dug in their heels and will not be reversing any of the decisions they have made in government. Former MPs Jeanette Fitzsimons and Sue Bradford had hoped the caucus might be persuaded this weekend to pull its support from the waka jumping bill. More>>


TOP Still Going, Actually: New Leader For Opportunities Party

New leader Geoff Simmons' aim as the leader of TOP is to take the party into Parliament at the next election where it can advocate and implement progressive reform in areas including fair taxation, cannabis legalisation, affordable housing, and environmental protection. More>>


Gordon Campbell: On Another Reason To Loathe HR Departments (And On The Teachers Strike)

This morning’s news item about Police emergency call centre staff turning up for work while they’re sick – because they’re afraid their sick leave statistics will be used against them, and their jobs put in jeopardy – is not an isolated case... More>>




Featured InfoPages