Flush Kiwi charities failing to pay out

NZ Herald 18 May 2013
New Zealand charities not required to give money back to the community are exaggerating the gap between the “haves and the have-nots”, critics say.

Under current law, private schools, fee-charging hospitals and food giants reap the rewards of tax relief with no obligation to donate some of their profits.

The Government is $600 million out of pocket each year as the charities sector swallows $400m through income tax exemption and $200m in tax credit refunds, yet Cabinet decided against reviewing charity law last year through “fiscal cost” fears.

Recent calls to urgently review the sector were once again quashed by Community and Voluntary Sector Minister Jo Goodhew yesterday.

Labour’s charity spokeswoman, Louisa Wall, and Christchurch charity expert Dr Michael Gousmett have slammed the lack of accountability in the multimillion-dollar, publicly subsidised sector.

Today’s regulations give tax relief to private schools, fee-charging hospitals, Ngai Tahu’s 38 limited liability companies (including Shotover Jet and Whale Watch Kaikoura) and food giant Sanitarium with no public benefit test holding them to account.

Under current law, charities are not obligated to give even $1 a year from their surplus to charitable causes.