Reforms to safeguard voluntary groups—Douglas

Press, 28 December 1987, Page 2

Reforms to safeguard voluntary groups —Douglas

PA Wellington The Government aimed to safeguard voluntary health and welfare organisations with its new tax proposals, not attack them, said the Minister of Finance, Mr Douglas. He was reacting to criticism from the director of the Mental Health Foundation, Mr Max Abbott, of the plan to abolish tax exemptions for charitable bodies. Mr Abbott said the tax reform proposals constituted a “vicious and shortsighted attack” on the

voluntary health and welfare sector. Mr Douglas said the present deduction on donations included many subsidies that the public would not regard as justifiable if introduced now. “At the moment, for example, private school fees and donations to private school old boys’ associations are both tax deductable,” he said. “The general taxpayer is subsidising them.” In proposing the tax changes, the Government had made it clear it ap-

preciated and supported the valuable work done by the “genuine” voluntary health and welfare sector. “We have given a commitment that the Government will provide that sector with direct funding in compensation for losses that result from the removal of the existing rebate system.” Mr Abbott’s concern that the system would be arbitrary and unreliable did not justify him making “pessimistic and destructive assumptions” that the

Government would back an unfair system, Mr Douglas said. The suggestion that the delivery of funds to the voluntary sector should match the level of support from the general public had “a lot of merit.” “It is certainly one of the options which will be considered seriously.” A consultative committee chaired by Dr Donald Brash would receive public submissions on tax changes “to help ensure they were sound and fair,” he said.