The government appears to have let slip planned changes to the Charities Act as part of budget documentation.
A summary of new initiatives included funding for implementing changes to the act, which is being reviewed for the first time since it came into effect in 2005.
“This initiative provides funding for an expansion of the taxation review authority’s remit to hear appeals under the Charities Act,” the budget document said.
“The expansion will improve access to justice through a less expensive appeals mechanism for charities.”
The budget also included funding for two extra members to sit on the charities registration board, Te Rātā Atawhai, an independent three-person body that makes decisions on registering and deregistering charities (in practice, Charities Services makes the bulk of these decisions under the delegation of the board).
More than $1.7 million was allocated for the initiatives for the three years from 2023/24.
The budget line appears to preempt an expected announcement from the government on its planned changes to the law.
Modernise the Charities Act
The community and voluntary sector minister, Priyanca Radhakrishnan, previously said she intended to introduce a bill as part of work to modernise the act this year.
Allowing appeals to the taxation review authority would be a significant change.
As it stands, organisations applying to become registered charities – a status that comes with tax benefits – have to appeal to the high court if the registration board denies their application.
Giving charities the option to appeal to the taxation review authority was one of the dozens of recommendations in a recent publication by charities law expert Sue Barker, a Wellington lawyer.
In her research, which was funded by a Law Foundation fellowship and describes what a world-leading charities law framework would look like, Barker pointed out that access to appeals was one of the key issues that needed to be dealt with in any reform process.
A number of submitters to the recent review of the Charities Act pointed out that the cost of appealing to the high court was prohibitive, making appeals inaccessible for most charities.
Prior to the introduction of the Charities Act, charities had the option of appealing to either the high court or the taxation review authority, Barker said in her work.
She recommended that this option be reinstated.