Tax-free for iwi but not house trust

SHARE

The mega-bucks business empire of South Island Maori tribe Ngai Tahu gets large charitable tax breaks, surprising the chair of a Queenstown community housing trust being stripped of its tax-free status. 

Documents show the Ngai Tahu Charitable Group – which has major Queenstown tourism and property assets – was registered by the Charities Commission in December 2008. 

The Ngai Tahu Charitable Group comprises 40 companies, mostly in tourism, property and fisheries. 

Local firms include tourism icon Shotover Jet, sister jetboater Dart River Safaris and Ngai Tahu Properties – which owns the new Post Office Precinct and adjoining police station and courthouse in downtown Queenstown. Because of the charitable status, none of these firms pays company tax. 

Queenstown Lakes Community Housing Trust – which helps local families get on the resort property ladder – is on the brink of losing its charitable status. 

The trust faces a $500,000 annual tax bill if it fails to win an appeal against a Charities Commission ruling striking it off. When Mountain Scene told housing trust chair David Cole of Ngai Tahu’s tax exemption, he said: “I’m surprised. On the face of it, it appears inconsistent. 

“Maybe this is new government policy but if so, then the public should expect the commission to be even-handed in applying the same standards to all other organisations on its list.” 

Ngai Tahu Charitable Group financial accounts for the June 30, 2009 year show assets of $596 million. Revenue totalled $165m. 

Losses of $7.8m in 2009 followed a 2008 profit of $37.7m. 

The accounts say: “All entities in the combined group have charitable status and accordingly no taxation expense or liability is re-cognised in the financial statements of those entities.” 

Ngai Tahu kaiwhakahaere (chair) Mark Solomon says: “Te Runanga o Ngai Tahu adhere strictly, at all times, to the law governing charitable entities. 

“The Ngai Tahu Charitable Trust has an annual process where all our expenditure and operations are assessed to ensure they are ‘charitable’. Tax is paid on any expenditure or operations that are not charitable.” 

Charities Commission boss Trevor Garrett says Ngai Tahu isn’t the only iwi with charities – and commercial entities can qualify as tax-exempt charities. 

Some charities run raffles and op shops but Garrett also points out trading charities like the Seventh Day Adventist Church’s Sanitarium Health Foods – maker of Weet-Bix and Marmite. 

“If it’s a trading company, we look at who are the shareholders, is there any private pecuniary gain, and is the money being used exclusively for charitable purposes,” Garrett says. 

“If the answer’s yes, then it may well be registered.” 

Each Ngai Tahu firm was individually checked for eligibility, he adds. 

Last month, Mountain Scene revealed the reason for striking off the housing trust – which has a stated aim of relief of poverty – was the Charities Com-mission ruled many recipients weren’t poor enough. 

The Ngai Tahu trust objectives don’t mention relief of poverty but do include education, training, health, conservation, employment, heritage and economic development. 

Garrett says his commission has deregistered only 14 of its 25,000 charities – including the National Council of Women. 

The commission robustly defends its deregistration decisions in court. Six organisations have appealed strike-off rulings and the commission has won every time, Garrett says. 

The Queenstown trust’s appeal is next March. 

Garrett thinks the relatively new charities register is weeding out many charities who took tax breaks “but may or may not have been charitable”. 

“We’ve seen a lot of things where you’d probably be quietly horrified by people claiming tax exemptions.”