It was announced in the NZ Herald on Monday (19/03/14) that The Problem Gambling Foundation [“PGF”], will take the Ministry of Health to court to try to overturn a decision the ministry recently made, under which PGF will lose most of its funding (apart from its Asian Family Services), in favour of the Salvation Army. PGF claim, with support from Labour Party and Green Party spokespersons (see below), that there are big questions yet to be answered over the alleged flawed process behind that decision, one which could leave many of its 63 employed staff out of a job. The foundation has been the key provider of addiction and treatment services for gambling problems for about 20 years and has dealt with 25,000 people in that time.
The Society for Promotion of Community Standards Inc points out that what the media needs to investigate more fully are the implications of the fact that (1) The Problem Gambling Foundation of New Zealand [“PGF”] is a registered charity (registered on 1 May 2008 – Reg. No. CC23709) – and as such cannot be involved in political advocacy – which it has been, and (2) it received $4.7 million in tax-payer fund income in 2013 ($4.6 m in 2012) , via the Ministry of Health budget, the very Ministry it intends to take Court action against via an expensive High Court judicial review. Furthermore, the media has not highlighted the fact that PGF does not have anything in its constitution authorising its trustees/officers to allow the foundation to be involved in litigation involving tax-payer sourced money (via Ministry of Health funding) and/or from donors who can claim tax rebates (because PGF is a registered charity).
PGF is an incorporated charitable trust (registered on 11 June 2001 Reg. No. 1145653) and there appears to be nothing in its trust deed authorising its trustees/officers to commit its funds to litigation, especially that directed at ‘the hand that feedeth it’ (a government department/tax-payers). How can such an action be viewed as fulfilling an exclusively charitable purpose or objective of a registered charity?
In addition to the $4.7m Ministry of Health funding, PGF received $444,706 in fees, grants and other income and $102,123 in rental income in the financial year ended 30 June 2013.
It is unclear how the actions of PGF involving court action, fit within the exclusively charitable purposes for which the charitable trust gained tax exemptions by the IRD as a non-profit charitable entity.
The NZ Herald has reported”
The Problem Gambling Foundation’s chief executive Graeme Ramsey said he hoped to go to court before the contracts ended on June 30, at which point the foundation could lose about 52 of its 63 staff as the Salvation Army picked up the work. Mr Ramsey said he could not discuss what the grounds of the legal action would be, but expected papers to be filed soon.
“If the changes are implemented then they are irreversible and we will have lost our capacity. We are still at a loss. We’ve been told it’s not about price, we’ve been told it’s not about performance and if the result of a process is odd or not understandable, that surely raises questions about that process.”
Ministry of Health spokesman Rod Bartling said the ministry was constrained in what it could say by pending legal action.
“However the Ministry is satisfied it followed an appropriate and robust procurement process to manage the tender for the contract currently held by the Problem Gambling Foundation.” He said that was confirmed by an independent Pricewaterhouse Coopers review.
Is there an explanation for why the Ministry of Health dropped its contract with PGF in favour of another registered charity – the Salvation Army’s Oasis service which already provided gambling harm counselling and other addiction and social services across the country?
Labour leader David Cunliffe said papers released under the Official Information Act showed there were questions to ask. They showed the ministry raised objections to some of the Foundation’s advocacy work including a campaign to promote ‘pokie-free pubs’ which the Ministry said was against Government policy. “I would have thought reducing the number of pokies in pubs was germane to its mission. At the best you’d call that micro-management. At worst, you’d call it a Government department running political interference. That would be a very unwelcome development.” [Emphasis added]
The question of what constitutes the kind of “advocacy” that can be legitimately engaged in by a registered charity is clearly defined by Charities – now a part of the Department of Internal Affairs (On 31 May, Parliament passed the Charities Amendment Act (No 2) 2012, which means that the Charities Commission core functions moved to the Department of Internal Affairs as at 1 July 2012). As the Charities Act 2005 is currently interpreted, registered charities can engage in advocacy only if it is ancillary to a non-advocacy charitable purpose.
PGF, which lists its street address is 128 Khyber Pass Road, Grafton, Auckland 1023, has a mission statement on its website which includes (1) “building healthy communities together, free from gambling harm” and commitment “to health promotion that contributes to safer practices through community education and the development of regulations and standards.” Its political advocacy work is best understood by considering the statement under the heading “Changing Environments”.
“PGF supports the development of an effective and caring public health policy for the maintenance and regulation of gambling in New Zealand through advocacy and social justice. [Emphasis added].”
As noted by Mr Cunliffe, the advocacy work PDF has engaged in over recent years has included lobbying for ‘pokie-free pubs’ which the Ministry said was against Government policy. There is nothing in the trust deed of PGF (available on the Charities website) that relates to, supports or addresses such political advocacy [see s. 4.2 (a) to (d)].
However, advocating for reduced numbers of pokie machines in the light of evidence of their harmful influence upon vulnerable and lower socio-economic communities would as David Cunliffe argues, appear to be an example of “micro-management” of existing law (i.e. advocacy of “best practice”) rather than a wholesale change of law. Advocacy of the latter variety may arguably be illustrated by the lobbying by the New Zealand Drug Foundation, another registered charity, to have “legal – high drugs” declared lawful following the government’s recent so-called “u-turn” on its policy and efforts by the Foundation to effectively decriminalise marijuana smoking and possession of the drug for first-time and second-time offenders apprehended by the police.
The Green Party website records that the select committee report in 2004 on the Charities Bill noted that submitters were concerned that the definition of charitable purpose in the bill was “too narrow”. It also noted that charitable organisations should be able to “engage in appropriate advocacy as a secondary purpose to achieve its main purpose”. However, there appears to be a lack of clarity around the appropriate interpretation of the Act as regards to advocacy.
Green Party MP Denise Walsh has said that the Government needed to “urgently reconsider” it’s funding.
“The Government cut to funding for the Problem Gambling Foundation must be seen as payback for its opposition to the SkyCity deal,” Roche said.
She currently has a private member’s bill in her name entitled Charities (Charities as Advocates) Amendment Bill. It seeks to address those submitters’ concerns (noted above) by changing the Act to make it clear that organisations for which advocacy for the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community is a primary part of their work, may be registered as charitable organisations.
It appears that the Labour Party leader has signalled his support for such a change in law and many within the National Party would probably support it.
Foundation takes Ministry of Health to Court. Published Monday 19 May 2014
By Claire Trevett, NZ Herald’s deputy political editor
The PGF began as the Compulsive Gambling Society (CGS) in 1988 with funding from the New Zealand Lottery Grants Board.
Problem-Gambling-Foundation-loses-Govt-funding. By Stacey Kirk.
Published 21 March 2014.