Closure of NZ Charities Commission is 'against the flow' of regulation worldwide

21 Mar 2012 News

Former director of charity services at the UK Charity Commission David Locke says the imminent closure of the New Zealand Charities Commission is "against the flow" of charity regulation throughout the world.

David Locke, former executive director of charity services, Charity Commission

Former director of charity services at the UK Charity Commission David Locke says the imminent closure of the New Zealand Charities Commission is "against the flow" of charity regulation throughout the world.

Locke is currently living in Australia and working as part of the Australian Charities and Not-for-profits Commission (ACNC) implementation taskforce, responsible for seeing in the new regulator in the country. 

"I have been following the decision in New Zealand," he said. "This decision is against the flow of a number of other common jurisdictions that have recognised the need for independent regulation of this important sector.

"Scotland, Northern Ireland and Singapore have all established independent regulators in recent years. In Hong Kong the Law Commission has recommended the establishment of a Charity Commission."

The closure of the independent New Zealand Charities Commission was announced as part of the government's cost-cutting measures on 11 August last year. Its functions are to be transferred to the Department of Internal Affairs (DIA), whilst a statutory board of three people to oversee independent registration and related functions will be established. The DIA will retain monitoring, investigating and prosecuting functions.

But Locke says the issue of independence is vital in charity regulation:

"In the UK the British government did consider the future of the Charity Commission in 2010 as part of its review of arms length bodies. The government accepted that the Charity Commission of England and Wales carried out necessary functions and there was a need for the exercise of these functions to be independent of politcal interests. The issue of impartiality is in my view an important one.

"In Australia, the government is implementing a wide raft of reforms of the charitable and not-for-profit sectos and is delivering on a number of key recommendations from the Productivity Commission report of 2010.

"The establishment of the ACNC is one of the cornerstones of this important reform agenda. Here the government has recognised the need for the regulator to be an independent body that has its own Commissioner and appropriation and reports to Parliament."

The New Zealand government believes that the transfer of charity regulation functions to the Department of Internal Affairs will save AUS$2.032m in the four years from 1 July 2012 at a transition cost of $300,000.

The transfer is currently going through New Zealand Parliament via the Crown Entities Reform Bill which was introduced to the House on 20 September and is expected to reach report stage at the end of March. Completion of transfer is expected in the middle of the year.

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