$47 Million Is “Too High A Price” For Community Volunteers To Pay

Based on the costs incurred by one small, incorporated society which sought to have its revised Constitution legally certified as compliant with the Incorporated Societies 2022 Act, and to receive professional advice on the changes relating to the application of the new financial reporting standards arising from the new Act, a society currently incorporated under the 1908 Act may very conservatively face professional costs of $1,700 plus GST (or $1.955), but maybe a lot more, before it re-registers.

The Ministry of Business, Innovation & Employment, which is responsible for the Register of Incorporated Societies, says there are around 24,000 societies registered under the 1908 Incorporated Societies Act that will need to re-register under the new 2022 Act in the next 20 months.

Based on these numbers, simple arithmetic indicates that a conservative estimate of the cost of change across the country is likely to exceed $47 million.

Who’s paying?

The reality is that most incorporated societies are volunteer-led and reliant on membership subscriptions to pay their way. While larger societies are likely to face larger invoices for the equivalent professional advice, many smaller societies without the financial means to pay may well just decide to close their doors, permanently.

In the case of incorporated community sport organisations, the Association estimates that the total cost of change is in the region of $15 million. And this is before any new recurring costs clubs may incur, (e.g., for insurance cover), should they adopt the Integrity Code under the new Integrity Sport and Recreation Act 2023.

In a cost-of-living crisis, the Association says it’s unfair for organisations which play an invaluable social role in supporting New Zealand’s diverse communities to have to front-up with cash to remain legally compliant under new legislation.

While $47 million has been appropriated for the purposes of Sport New Zealand ($36 million) and Integrity Sport and Recreation New Zealand ($11 million) by the Government for the 2024/25 financial year, it will all be for nought if the essential fabric of community sport delivery in New Zealand, our community clubs, (and our local community societies in many other essential social sectors), cease to exist.

We call on the Ministers of Sport and Recreation (Chris Bishop), Commerce and Consumer Affairs (Andrew Bayly) the Community and Voluntary Sector (Louise Upston) and Regulation (David Seymour) to work with this Association to avoid an unintended extinction event which is likely to be the fate many of New Zealand’s essential community organisations.

[1] Based on around 7,500 incorporated societies being community sport organisations

© Scoop Media