While the devastation wreaked by Cyclone Gabrielle continues to dominate our focus, behind the scenes, political parties continue to develop their manifestos in the lead-up to this year’s general election. Sue Barker, Director of Sue Barker Charities Law, joins us for a series on 10 election policies for charities for 2023. In the eighth and final part of the series, Sue shares her insight on carrying out a proper, first principles, post-implementation review of the Charities Act. She has also be presented at the Charities and Not for Profits Update this week.
The charitable sector has been waiting for a proper post-implementation review of the Charities Act since the original Charities Bill 108-1 was almost completely rewritten at Select Committee stage in 2004 and then rushed through under urgency without proper consultation. Concerns about the process were expressed by opposition members of the Select Committee at the time in the following terms:[1]
The Government managed to upset most of the voluntary sector of New Zealand with this bill, which was poorly drafted and required a substantial rewrite.
The submitters were appalled by the details of the bill, which they saw as a heavy-handed approach i.e. a hammer to crush an ant. We heard no evidence of impropriety in the charitable sector through the submission process though this belief was used as a genesis for this legislation …
The consultation process was inadequate with the original bill and we have major concerns that the redrafted sections of the bill should have been made available for a further period of sector wide consultation. We all know the devil is in the detail and if the bill gets it wrong, as the first draft definitely did the charitable sector will pay the price and we will see many charitable organisations close. There is the possibility that there are a number of structural issues in the bill remaining unaddressed and without a further period of consultation with the sector it is difficult to fully identify these.
There are indeed a number of structural issues in the Charities Act as passed and the charitable sector is indeed paying the price. However, in the 18 years since the Charities Act was passed into law, these structural issues have not been addressed; instead, the gains that were made at Select Committee stage have been slowly eroded: the Act has been subjected to a series of piecemeal amendments, generally inserted by Statutes Amendment Bill and similarly rushed through under urgency without proper consultation. The Charities Amendment Bill, currently before Parliament, is another example of piecemeal reform undertaken in the absence of any overarching vision for the sector: even the DIA’s own regulatory impact statement speaks of inadequate consultation, inadequate problem definition, and a lack of evidence to support the proposals. Some of the proposals have not been consulted on at all, while almost every issue of concern for the charitable sector has been taken off the table.
Fast law does not make good law: it is critical that the Charities Act is finally subjected to a proper, first principles, post-implementation review, carried out by an agency that is independent of DIA, such as the Law Commission or an independent review panel.[2] The fundamentals of the Act are not sound: how can we determine whether the Charities Act is “fit for purpose” when we do not have agreement as to what that purpose is? Is it about giving a business unit of a government department power to mould our country’s civil society in its own image, turning charities into pale imitations of the government bureaucracy? Or does it have a deeper purpose of protecting charities’ independence and their important role in a liberal democracy? Answering this question requires grappling with a deeper question: what type of society do we want to live in? Do we aspire to live in a liberal democracy that upholds freedoms of expression, association, and the rule of law, or are we happy to sleepwalk our way towards increasing authoritarianism?[3]
The charitable sector is often described as an “invisible subcontinent” on the social landscape, poorly understood by policymakers (and the public at large), encumbered by unnecessary legal limitations and inadequately utilised as a mechanism for addressing social problems.[4] But key to building social cohesion and upholding liberal democratic values in the face of the forces of autocracy is allowing charities to come out from under the bell-jar of over-regulation, and enacting a legal framework for charities that boldly upholds and protects their independence. Getting the legal framework right would reduce bureaucracy and all its associated costs. Government needs to invest in the charitable sector and get out of the way.
In this election year, which political parties will have the foresight to make the connection between the legal framework for charities and our country’s social cohesion, wellbeing and democracy, and then have the courage to show the leadership needed to protect them?
Sue Barker is the director of Sue Barker Charities Law, a boutique law firm based in Wellington, New Zealand, specialising in charities law and public tax law. Since its founding in 2012, the firm has won a number of awards, including Boutique Law Firm of the Year at the New Zealand Law Awards. Sue is a member of Charities Services’ Sector Group and a member of the Core Reference Group for the review of the Charities Act. Sue is also a co-author of the text The Law and Practice of Charities in New Zealand (LexisNexis, 2013) and a contributor to a number of texts, including Charity Law: Exploring the Concept of Public Benefit (Routledge, 2022) and Regulating Charities: the Inside Story (Routledge, 2017). In 2016, Sue was made an Honorary National Life Member of the National Council of Women of New Zealand Incorporated for her work assisting the Council with charities law issues. In 2019, Sue was awarded the New Zealand Law Foundation International Research Fellowship Te Karahipi Rangahau ā Taiao, New Zealand’s premier legal research award, to undertake research into the question “What does a world-leading framework of charities law look like?”. Her report Focus on purpose was released in April 2022 making 70 recommendations for charities law reform in Aotearoa New Zealand”. More information about Sue and the research can be found at www.charitieslaw.co and www.charitieslawreform.nz
Contact Sue at susan.barker@charitieslaw.co or connect via LinkedIn
[1] Charities Bill 108-2 (select committee report) at 19 – 20 (emphasis added).
[2] In Australia, see P McClure AO, G Hammond OAM, S McCluskey, Dr M Turnour Strengthening for purpose: Australian Charities and Not-for-profits Commission – Legislative Review 2018 31 May 2018. In Northern Ireland, see Dr O Breen, Rev Dr L Carroll, N Lavery Independent Review of Charity Regulation Northern Ireland January 2022. England and Wales appointed an individual. See Lord Hodgson of Astley Abbotts Trusted and Independent: Giving charity back to charities – Review of the Charities Act July 2012.
[3] Sarah Repucci and Amy Slipowitz Freedom in the World 2022 – The Global Expansion of Authoritarian Rule Freedom House February 2022 at 1.
[4] Megan Haddock Salamon Crafted Lenses to Better See Civil Society – Will we Wear Them? Nonprofit Quarterly 5 October 2021, referring to Dr Lester M Salamon.