Michael Cullen: Speech to the Community Trusts Conference

Speech to the Community Trusts Conference

18 February 2004 Speech Notes Combined Community Trusts Annual ConferenceWairakei Resort, Taupo

The recent debate over the treatment of Maori customary rights regarding the foreshore and seabed has reminded us of the degree to which we rely upon an underlying sense of participation and fairness to make our communities work. Social cohesion is something that is built up over generations. It enables a community to operate largely on trust, which - as many economic theorists are starting to realise - is a crucial factor in economic prosperity as well as community well-being.

It also should enable us to engage with a complex issue where conflicting rights need to be recognised and respected if we are all to live together. That is what we face with the foreshore and seabed issue: rights for all New Zealanders to access the foreshore and seabed and the longstanding customary rights of some Maori relating to specific and discrete areas of the foreshore and seabed.

The government's proposals seek to balance those rights; but, by opting for simple slogans which skim the surface and echo vague fears and uninformed prejudices, some people have used the inevitable uncertainty around the issue to drive a wedge between Maori and non-Maori. In a situation which calls for character, it is sad to find some reverting to caricature.

The risk is that trust within communities can be undermined. What takes years and decades to create can be damaged and possibly destroyed relatively quickly. The immediate political aims may be met; but our communities have to deal with the consequences, which are both social and economic.

With this backdrop to this year's conference, I would like to affirm the value and importance of Community Trusts as independent community funders. Our society comprises not just the government and the private sector, but also the dense network of organisations and relationships comprising "civil society".

We in government are keen to see a well functioning community sector. Indeed, when people lob hand-grenades into delicate areas of community relationships we see the unique value of the sector as it spontaneously acts to repair the damage and to strengthen the things that link us together despite our differences.

But we are also conscious that the independence of the decision-making of funders from government is itself fundamental. That said, government does have a general leadership role, and as Minister I have a responsibility to form views on issues of importance and to express them.

You may recall that I wrote to all Community Trusts in February 2003 drawing attention to the need for sound governance, and raising some specific issues (for example, the management of conflicts of interest). This proved to be a useful exercise. I received a number of thoughtful responses, and I am pleased to note that over the period since the letter, several trusts have raised particular issues with me.

I would like to see this open dialogue continue. It certainly does not impinge upon the independent decision-making of trusts. Indeed, I see a shared interest between myself (as the Minister who makes the appointments) and you as Trustees in ensuring that sound governance practice is not just followed but that it is seen to be followed.

We share the risks in terms of public perceptions of reputation and credibility and it makes sense that we work together to manage them.

There are distinct advantages in having diversity of decision-making in an area like community funding. But there are also advantages in having a high level of collaboration and cooperation and information sharing among funders within particular regions.

There are opportunities to add value to the effectiveness of community funding, as well as helping to deal with risks such as multiple dipping by applicants, crossed purposes between funders, and "reinvention of the wheel" as various funders each deal separately with similar issues.

I would like to spend a little time focusing on two recent initiatives that I think have much going for them.

The first has been the holding of two Funding Forums. The first in February 2003 was organised at the initiative of the Lottery Grants Board. The second in August 2003 was organised by Philanthropy New Zealand.

These provided an opportunity for useful discussions and information sharing across a wide range of funder organisations range of useful issues, and I am pleased to note the participation of representatives of a number of Community Trusts in these.

Also of note is the emerging role of Philanthropy New Zealand as a national clearing house for issues of interest to funding organisations, and as a body capable of representing the charitable sector at a national level.

The second important recent initiative is the implementation of provisions included in the Local Government Act that was enacted in late 2002. These provisions are a significant opportunity for community funders, and should in time become an important factor in shaping community development.

Under section 91 of the LGA local authorities are given responsibility for carrying out a process for identifying what are referred to as "community outcomes". This is to happen at least every 6 years.

The processes to be followed are not prescribed in great detail and are to be decided by each local authority. But there are some specific requirements.

Before deciding on the process the local authority must identify other organisations and groups capable of influencing either the identification or promotion of community outcomes.

Local authorities are then required, so far as is practicable, to secure their agreement to the process. It is expected that in general local authorities will undertake the process as regional or sub regional groupings rather than individually, although this is not a legislative requirement.

Subsequent there is an obligation on local authorities to report against the achievement of those outcomes.

While these are associated with and related to the planning processes that local authorities are required to undertake for their own purposes, they are not intended primarily to be part of the local authority's processes, nor are they intended to be owned by the local authority.

The purposes of this process are set out in the Act and it is worth summarising these. They are:

v To provide communities with an opportunity to discuss their desired outcomes across social, cultural economic and environment areas and the relative importance they attached to these.

v To provide scope for the measurement of progress towards identified outcomes;

v To provide scope for the better coordination and application of community resources; and

v To provide information to guide the decision-making of both local authorities and other organisations.

While part of the purpose is to better inform the planning and decision-making of local authorities, the broader purpose to provide an information sharing and generating mechanism across a district or region.

Community outcomes are conceived of as something that local authorities are given responsibility to make happen; but they do not belong solely to the local authority.

The majority of local authorities are working towards completing this process in advance of their own planning for the year commencing 1 July 2006. On that timetable they will be looking to undertake discussions during the 2005/06 year and will now be close to embarking on the prior step of identifying the other key stakeholders within their communities.

Local authorities in some regions may be more advanced than others. Some, such as the Hawkes Bay, where I live, and Southland, are looking to establish "interim community" outcomes earlier than this timetable suggests.

You as Community Trusts have a lot to contribute to this process and a lot to gain from helping to ensure that it is undertaken well.

>From the basis of your experience as long established community funders I am sure that each of you has a lot of information to contribute to the development of a consensus view on the wants and needs of your communities.

At the same time I believe there is a lot to be gained from participation in the process of consensus building to form a common picture of the key aspirations and issues for communities. This is an opportunity to strengthen your understanding of the roles and perspectives of other players in your regions and to educate them further about yours.

There are potential wins for all involved in community funding if a common frame of reference can be developed and common pools of information can be developed that each can draw on.

I am conscious that history and practice vary across regions. In some cases the notion of articulating jointly-determined community outcomes may involve a major mind-shift and considerable spade-work in forming new channels and communication; whereas in others it may involve merely a consolidation of existing relationships or an incremental building on relationships that are already established.

To give just one Trust as an example, I am aware of the established close relationship between The Bay of Plenty Community Trust and Sport Bay of Plenty, and that the Trust has initiated an annual regional funders forum.

I would encourage Community Trusts not just to turn up when your local authority arranges a meeting, but also to be proactive about your involvement and be prepared to play a leadership role within these processes. You have experience and capability, and others are looking to you for an input of ideas.

While local authorities have been given responsibility for ensuring that the outcome-identification process is undertaken, they cannot alone ensure it success. Indeed one of the risks is that the processes are too closely identified as an initiative by the local authority - a kind of tick-box activity to fulfil a statutory obligation - rather than a broadly-based community process.

Success will depend as much upon the roles played by established community organisations such as Community Trusts.

If any of you have not yet been approached by your local councils and have not been kept fully informed of where they are at with their preparations for the carrying out of this process, I would encourage you to get on the front foot and take the initiative.

A few words now on the Charities Bill, which will bring into being a new Crown entity to be known as the Charities Commission. This organisation's main responsibilities will be:

v To approve and register charitable organisations and approved donees; v To receive annual returns and monitor the activities of charitable organisations and approved donees; v To educate, provide advice to, and support the trustees and officers of charitable organisations and approved donees so that regulatory obligations and duties can more easily be complied with; and v To provide advice to government.

Draft legislation to establish the Commission has recently been sent out for final inter-departmental consultation, and officials hope to have the Bill ready for Introduction and referral to a select committee in March 2004.

Once introduced, the Charities Bill will be referred to a Select Committee for consideration. As part of its consideration, the Select Committee will call for submissions on the Bill from members of the public. A copy of the Bill will be made available online (details of where to find the Bill will be posted on the Ministry of Economic Development's website).

A series of nationwide workshops is being organised by the Association of Non-Governmental Organisations of Aotearoa (ANGOA) and supported by the Ministry of Economic Development to inform people about the Charities Bill and the proposed changes it will introduce. These workshops are intended to enable attendees to make informed submissions to Select Committee. The workshops will commence shortly after the Bill is introduced.

Allowing for a standard six-month Select Committee hearing on the Bill, enactment is likely to occur in September 2004 subject to the legislative process. The Commission will then likely be operational in October 2004, with the Charities Register likely to go live in 2005, and the tax exemption provisions in the Act to come into force a year after that.

Applications for appointment to the Charities Commission's inaugural Board are expected to be called for once the legislation has been introduced into the House.

A web site for the Commission is also currently being developed (www.charities.govt.nz). Once the Bill has been introduced into House, this site will go live. A copy of the Bill, information on the workshop programme and the recruitment of Commissioners, and other regular updates will be posted on this site.

I would urge all Community Trusts to keep well informed of the Bill and the issues that are raised during the Select Committee process, and, of course, to participate in that process through making a submission on the Bill.

Finally, some comments on the review of fees. I am aware that Trusts raised the issue of the appropriateness of the current fee regime during 2002/03, and I understand that representatives of the Trusts met with the Secretary for Internal Affairs last year and that it was agreed that a review would be undertaken and that Trusts would be involved and consulted.

I am conscious that there has been something of a hiatus on this, but that draft terms of reference will shortly be forwarded to Community Trust representatives with a view to this process being completed within the first half of 2004.

I am happy to see this review proceed, but Trusts need to be aware that the fees are set by regulations and that any decision on changes that might arise would need to be considered by Cabinet and could not simply be agreed by officials or even by myself as Minister. It also needs to be recognised that the fees feed into the Government appropriation process and that any changes arising from the review will need to be fed into the budget cycle in order to be given effect.

In short, the wheels will turn, but they are geared in with other wheels and may take some time to come full circle.

Nevertheless, the essence of the work of trustees is community service. That is at the heart of the matter, and I am sure you have no wish to obscure that.

In that regard you embody the values I talked about at the start: a recognition that communities do not just arise from nothing, but rather that they need to be built and strengthened. And a belief that sensitive and independent community funding is an important tool for making this happen.

Thank you once again for your service, and I wish you a productive and stimulating conference.

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