6 April 2005 Media Statement

Charities Commission arrangements agreed

Associate Commerce Minister Judith Tizard and Community and Voluntary Sector Minister Rick Barker today detailed plans for future responsibility for the proposed Charities Commission and its legislation.

From July 1 2005, responsibility for the Charities Commission will transfer from the Ministry of Economic Development to the Department of Internal Affairs (DIA), which reports to Rick Barker as Minister for the Community and Voluntary Sector.

The Charities Bill establishes an independent Commission that will support and assist the charitable sector in building capacity and developing capabilities. It also provides for a registration, reporting and monitoring system for charities. Registration with the Commission will be voluntary but charities wishing to benefit from retaining or gaining income tax exemption will need to register.

Judith Tizard says the Cabinet decision to move the responsibility for the legislation to Internal Affairs is sensible as charities have a strong link to social services.

"I am confident this shift to DIA will meet the balance between regulatory and development functions that are crucial for charities' growth and success," she said.

Rick Barker says that DIA is well placed to take over responsibility for the Commission, because it already has many functions relating to education and support.

"As the Charities Commission's emphasis on education and support for governance and management issues increases, DIA can more naturally bring this into their core business as an extension of their current functions," said Mr Barker.

"I am pleased to be the designate Minister who will have responsibility for the for the Charities Commission from 1 July 2005 - this area of community work, along with the voluntary sector, is evolving and growing and it will have my utmost support," said Rick Barker.

The Ministry of Economic Development (MED) developed the legislation following the report of a working group set up by the Inland Revenue Department (IRD) and the Treasury. The Ministry of Social Development has also had ongoing input into the legislation.

"We've combined the efforts of four major government departments to make sure the new legislation works in the best interests of charities and the people they serve," said the Ministers.

The Charities Bill is currently awaiting its second reading.

Further information

www.charities.govt.nz

Cabinet paper

www.charities.govt.nz/resources/cab-dep-res-adm-char-act.html

Background information

The Charities Commission will be an autonomous Crown entity, allowing it greater independence from the Government than its initially proposed status as a Crown agent. All Crown entities are monitored by a government department and have a Minister with oversight responsibility for the entity. It was initially proposed responsibility for the Charities Commission be held by the Ministry of Economic Development.

In response to submissions to the Social Services Select Committee the focus of the Charities Commission as set out in the Charities Bill has shifted to give more prominence to the Commission's education and support functions, while still retaining the key registration, reporting and monitoring functions.

Following this change in focus, the issue of the most appropriate department to have monitoring responsibility for the Commission was reconsidered. This was also the subject of several submissions to the Select Committee considering the Bill.

The government department responsible for monitoring the Commission will be the Department of Internal Affairs (DIA). In undertaking this role, DIA will work closely with the Ministry of Social Development (MSD), and the Office for the Community and Voluntary Sector, which is a part of MSD (particularly in relation to the Commission's strategic direction and performance).

The formal transfer of responsibility will occur on 1 July 2005. Until that date, Hon Judith Tizard will continue to support the Charities Bill through its final stages. MED will continue working on the Bill, the appointment of Commissioners and the establishment of the Commission, in close consultation with DIA. MED will continue to manage the development of the register until it is operational.

The Department of Internal Affairs has a long history of supporting the charitable sector through its administration of grant schemes, such as Lottery, COGS and funding for Volunteering New Zealand. It provides community development advice services through its 16 regional offices, and provides information and support to charitable groups through regular newsletters and the Communitynet website.

The Department is also experienced in the role of monitoring and supporting Crown Entities. It currently monitors the Office of Film and Literature Classification, and the New Zealand Fire Service Commission.

ENDS

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