John Key MP
National Party Leader

16 May 2007

National announces more policies to benefit community groups

National Party Leader John Key today announced further policies to benefit the community and voluntary sector, including a commitment to support PlunketLine.

In February, he announced changes to tax rules on charities, and at Plunket’s annual conference in Dunedin today he outlined policies on the taxation of volunteers and government funding of community and voluntary organisations.

He also committed National to supporting a 24-hour PlunketLine.

“In my Burnside speech, I said I wanted to turbo-charge the efforts of the sector – which Labour dismissed at the time as ‘Tory Charity’,” says Mr Key.

“Taken together with the policies I have already announced on charitable donations, I believe these measures will have a significant positive impact on the sector.”

The new policies are:

- All payments which reimburse volunteers for actual and reasonable expenses will be tax free, regardless of the amount of the payment. Currently, if a group reimburses a volunteer for expenses then it has to be declared as income, and income tax paid.

- Honoraria payments will be tax free up to an amount of $500 per year per person, to express appreciation for those who give generously of their time and expertise. Again, this is currently treated as taxable income.

- Where the government asks a community group to provide a service we will expect to pay the full cost of delivering that service, including relevant overhead costs.

- A reduction in the burden of bureaucracy on community groups.

- A commitment to investigate a venture capital fund for the community and voluntary sector.

“Government departments must recognise it is completely legitimate for community groups to recover all overheads associated with providing a particular service. Otherwise, what happens is that groups can only deliver by committing some of their own resources,” says Mr Key.

“Likewise, reducing bureaucracy and compliance costs that community groups have to deal with is very important. We want government funding to go to the front line, not to the back office to fill in forms that government departments often don't read anyway.

“National is also interested in developing a venture capital fund, similar to what happens in the economic development sphere. The idea would be to give a boost to organisations that have the capacity to do more, or do things differently, or in fact are new to the sector altogether.

“Such funds have been set up recently in Australia and Britain, and National is keen on fleshing this idea out further.”

ENDS

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