Proposed abolition of the Charities Commission

The Charities Commission was established pursuant to the Charities Act 2005.  Since establishment the Charities Commission has been responsible for the registration of charities together with a responsibility to promote public confidence in the charitable sector.

To date the Commission’s views have been upheld in 10 of the 11 challenges against the Commission’s registration decisions to the High Court.   Any charity whose registration application is denied will be understandably disenchanted with the Charities Commission, especially those who enjoyed the tax advantages of charitable status prior to the enactment of the Charities Act and the establishment of the Charities Commission.  However, through the decided cases an increasingly New Zealand centric charities jurisprudence is developing.  Further, the robustness of the approach taken ensures that the public can donate to charities with greater confidence, while from a reveneue perspective, charitable tax advantages are better controlled.

These developments are now at risk with the proposed dis-establishment of the Charities Commission, which will occur if the Crown Entities Reform Bill is passed in current form. 

It is unfair to presuppose that the Department of Internal Affairs, which will take over the function of the Charities Commission, cannot continue the work of the Commission.  That said, disbanding the Commission so early in its tenure appears to demonstrate considerable lack of foresight.  It is accepted that Internal Affairs might manage the Commission’s functions more cost effectively at face value.  How though are the revenue savings that have resulted from the almost 10% of charities denied registration (or removed from the regisiter) to be calculated?

Any interested parties can still make submissions on the Crown Entities Reform Bill.  Submissions should be sent to Ruth Dyson, Chairperson, Government Administration Select Committee, Parliament Buildings, Wellington.