Submission on PNCC's Draft 2025-26 Annual Budget

16 April 2025

Tēnā koutou katoa, 

Thank you for the opportunity to submit on PNCC’s 2025/26 Annual Budget.

Te Pū Harakeke—Community Collective Manawatū is a collective body representing community and social service organisations in Palmerston North and the wider Manawatū region. We currently have a membership of more than one hundred for-purpose organisations and individuals working within the local community and social sector. Our vision is for a strong, vibrant, and connected community sector in the Manawatū, and our mission is to empower community groups to participate in and contribute to the wellbeing of our communities.

We are generally supportive of the proposed budget and acknowledge the challenges involved in balancing service delivery with maintaining manageable rate increases for residents and businesses. We thank the Council for its efforts to keep rates lower than originally proposed in the Long-term Plan. We are also pleased to see continued progress over the past year on essential infrastructure and community facilities that meet the needs of diverse communities and benefit all residents. Furthermore, we are grateful for the Council’s ongoing support of the community sector—particularly its commitment to empowering local groups to deliver valuable projects and initiatives.

Ngā mihi nui ki a koutou,
Te Pū Harakeke—Community Collective Manawatū

Submission on IRD's Consultation Paper on Taxation and the not-for-profit sector

12 March 2025

Key Concerns

1. Taxing charity business income discourages not-for-profit organisations from being innovative and seeking sustainable income streams.

The sector is financially fragile, with increasing competition for funding. Many organisations are experiencing funding reductions due to government budget constraints, while demand for social services continues to rise. The Community Networks Aotearoa State of the Sector Survey Report (October 2024) highlighted that 77% of surveyed organisations have experienced increased demand for their services and activities. Additionally, the number of people accessing these services has risen by 64% compared to two years ago. The Salvation Army State of the Nation Report also underscored significant challenges in Aotearoa, including the highest reliance on welfare since the 1990s and growing demands for social services and food security.

These findings align with what we have observed in Palmerston North and the Manawatū region. We have received an increasing number of applications for the Emergency Grant, which we administer on behalf of the Palmerston North City Council. This grant provides essential funding to help community organisations remain operational while they develop alternative and long-term funding strategies.

Funders encourage charities to diversify their income streams and demonstrate financial sustainability. They rarely provide funding that covers the full cost of service delivery. Anecdotal feedback from one of our member organisations indicates that funding from funders covers only 40% their needs, while the remaining 60% comes from their Op shops and other fundraising activities. Many charities operate businesses, such as op shops, to generate alternative income or find innovative ways of raising funds for their organisations. Removing tax exemptions on business income for charities would significantly hinder their ability to remain financially viable. Restricting their ability to operate businesses would not only reduce financial sustainability but also stifle innovation in addressing social issues.

2. The definition of “unrelated” business income lacks clarity.

The proposal to tax "unrelated" business income raises concerns about how "unrelated" will be defined. For example, our organisation collaborates and connects community and social services in the region. We manage a community house in Palmerston North, where tenants (community organisations) receive a small share of meeting room revenue quarterly to help cover the costs of maintaining communal spaces. Would this income be considered "unrelated" simply because renting meeting rooms is not listed among their charitable purposes? We propose that taxation be based on the purpose for which the income is used rather than its source.

3. Removing the tax exemption for unrelated business income will increase compliance costs for charities.

Introducing additional tax obligations will impose higher compliance costs on charities. Many charities already face difficulties in accessing affordable accounting services, particularly smaller Tier 3 and Tier 4 organisations. Pro bono or semi-pro bono accounting and auditing services are becoming increasingly difficult to find. Any increase in compliance costs will reduce the funds available for charitable purposes.

4. Charities operate with substantial pro-bono and donated resources that are not reflected in financial statements.

Many charities currently operating businesses do not account for the true value of their input costs. They often rely on:

• Pro bono or discounted goods and services
• Volunteer labour
• Staff working for lower-than-commercial rates due to the charitable mission
• Discounted or peppercorn leases

If charities are required to pay tax on their business income, they will also be entitled to claim all available input expenses, as for-profit businesses do. This would likely reduce taxable business profits and, consequently, any potential tax revenue.

5. Reducing the financial capacity of charities will place greater pressure on government and philanthropic funding sources.

Restricting charities' ability to generate sustainable income will increase reliance on government and philanthropic funding to address societal needs. If charities are unable to provide essential services, the government will inevitably face pressure to step in—at a greater cost than the current tax exemptions.

6. Charities already meet high standards of transparency and reporting.

Charities are subject to stringent reporting requirements, including compliance with legislated financial reporting standards and, in many cases, independent audits. These regulations ensure financial transparency and accountability.

Our Position

We believe that business income generated by charities and used for charitable purposes should remain tax-exempt. The sector is already facing financial challenges, and any additional requirements on the not-for-profit sector would increase costs for charitable organisations and, ultimately, for the government.

Ngā mihi nui,

Submission on Medium Density Housing in Palmerston North

4 February 2025

1. This submission is made on behalf of Te Pū Harakeke - Community Collective Manawatū Incorporated.

2. Te Pū Harakeke was established in 1971 as the Palmerston North Community Services Council. We are a collective of 108 not-for-profits, individuals, businesses, and other agencies engaged in social and community service in Palmerston North and the Manawatū.

3. Our vision is “a strong, vibrant and connected community sector in the Manawatū” and our mission is “to empower community groups to participate in and contribute to the community and it’s wellbeing.”

4. We commend PNCC for creating Medium Density Residential Zones within our city. A lack of housing supply has been a persistent issue in Papaioea, reconfirmed by Te Pū Harakeke’s sector surveys and attendees of the 2024 Social Wellbeing Forum. This effort from PNCC directly addresses an urgent need from our community.

5. Given the impact of the housing crisis on low-income individuals and households, we encourage PNCC to prioritise housing for those groups. It would be beneficial to our city if PNCC favours developers who aim to build financially assessable housing rather than luxury apartments in these Residential Zones. This may also be a strong option for social housing.

6. We encourage PNCC to continue reviewing its housing policies, including the resource consent process. Te Pū Harakeke will continually support PNCC’s continued efforts to address wellbeing issues at the structural level.

Ngā mihi nui ki a koutou,

Te Pū Harakeke—Community Collective Manawatū Incorporated

Submission on the Treaty of Waitangi Bill

Nā mātou - 

Dr Kat Nguyen                                           Kim Penny                                  Catherine Rikihana

Kaiwhakahaere Matua/Manager               Chairperson                                Board member
Te Pū Harakeke                                          Te Pū Harakeke                           Te Pū Harakeke

1. Te Pū Harakeke - Community Collective Manawatū Incorporated
2. Manawatū Peoples Radio
3. Abuse & Rape Crisis Support (ARCS) Manawatū
4. MentorED
5. Environment Network Manawatū
6. Manawatū Tenants Union
7. Manawatū Lesbian and Gay Rights Association
8. Strive Rehabilitation Manawatū
9. Parentline Manawatū
10. Manawatū Multicultural Council Incorporated
11. Te Hā o Hine-ahu-one Palmerston North Women's Health Collective
12. Te Whare o Ngā Wāhine Palmerston North Women's Centre

The letter was also signed by the following community workers in the Manawatū

1. Rennie Williamson, Communications Lead, Environment Network Manawatu.
2. Kadam Birgit Saunders, resident teacher, Amitabha Kadampa Meditation Centre Palmerston North
3. Helen Gilmour-Jones, Chair of Hokowhitu Village Centre
4. Robyn Barnett
5. Diane Koch
6. Abi Symes, Kaiwhakahaere – Manager, The Stomach/Creative Sounds Society Inc.
7. Yun Tang
8. Terry Lloyd-West, Service Manager for Strive Rehabilitation Manawatū
9. Michelle and Peter Grey
10. Justin Ngai

PNCC's Draft Food Security & Resilience Policy - October 2024

Submission on PNCC's Draft Food Security and Resilience Policy
31st October 2024

1. This submission is made on behalf of Te Pū Harakeke—Community Collective Manawatū Incorporated.

2. Te Pū Harakeke was established in 1971 as the Palmerston North Community Services Council. We are a collective of 108 not-for-profits, individuals, businesses, and other agencies engaged in social and community service in Palmerston North and the Manawatū.

3. Our vision is “a strong, vibrant and connected community sector in the Manawatū” and our mission is “to empower community groups to participate in and contribute to the community and it’s wellbeing.”

4. We commend the Council for developing the Food Security and Resilience Policy, recognising the critical importance of food security for community well-being, particularly in the context of the current cost-of-living crisis and the increased demand for services due to the prolonged impacts of the COVID-19 pandemic.

5. We advocate for greater community funding to support initiatives aimed at creating a sustainable and inclusive food system that promotes food security, resilience, and health for local communities.

Ngā mihi nui ki a koutou,

Te Pū Harakeke—Community Collective Manawatū

Te Ahu a Turanga / Manawatū Tararua Highway Submission - October 2024

Submission on the proposed toll on Te Ahu a Turanga: Manawatū- Tararua Highway
4th October 2024

1. This submission is made on behalf of Te Pū Harakeke—Community Collective Manawatū Incorporated.

2. Te Pū Harakeke was established in 1971 as the Palmerston North Community Services Council. We are a collective of 108 not-for-profits, individuals, businesses, and other agencies engaged in social and community service in Palmerston North and the Manawatū.

3. Our vision is “a strong, vibrant and connected community sector in the Manawatū” and our mission is “to empower community groups to participate in and contribute to the community and it’s wellbeing.”

4. We unequivocally oppose the proposed road toll on Te Ahu a Turanga: Manawatū Tararua Highway.

5. The proposal will significantly impact people in the Tararua District, particularly in Woodville, Dannevirke, and surrounding areas, who need to travel to Palmerston North for employment, education, medical, and other social services.

6. It will also affect our member organisations that provide services across the region. For instance, staff from Abuse & Rape Crisis Support Manawatu, Whatunga Tūao Volunteer Central, and Manawatu Tenants Union frequently travel to and from Tararua to support their clients. Their clients, especially children and young people supported by Abuse & Rape Crisis Support Manawatu and Parentline, also need to travel from Tararua to Palmerston North, as not all services are available locally.

7. The client groups supported by our member organisations often have low to moderate incomes and depend on affordable transportation options to access essential services in Palmerston North. Imposing a toll on the highway would impose an additional financial burden on these individuals, who are already struggling with rising costs of living, rent, and daily expenses.

8. While we do not oppose tolls in principle, we are against tolling this route due to the negative consequences for already disadvantaged communities. Additionally, people who use alternative roads to avoid the toll will increase wear and tear on those roads, which local councils will need to repair, leading to higher local rates that will further disadvantage these communities.

9. It is concerning that the toll option was not discussed during the consultation on this road. Furthermore, Te Ahu a Turanga: Manawatū Tararua Highway is not a new road requiring cost recovery; it is a replacement for the damaged State Highway 1 through the Manawatu Gorge, a repair responsibility that falls to Waka Kotahi.

10. We strongly urge NZTA to explore alternative funding mechanisms that do not place undue pressure on those least able to afford it.

Ngā mihi,

Dr Kat Nguyen - Executive Officer & Kaiwhakahaere Matua / Manager

Te Pū Harakeke—Community Collective Manawatū Incorporated