hi guys, the`Federation` made the `Business Headlines`today, well done Wal and the Feds, it`s out there for all to see how the board needs a good shake-up, cheers
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The regulator of the plumbing, gasfitting and drainlaying industry has successfully appealed a decision stripping it of its charitable status, entrenching favourable tax treatment.
The Plumbers, Gasfitters and Drainlayers Board (PGDB) administers the registration and licensing of the industry and has been a registered charity since 2008.
A complaint by industry agitator Wal Gordon of the breakaway industry body the Plumbers, Gasfitters and Drainlayers Federation saw the Charities Registration Board (CRB) rule the PGDB was not a charitable entity and move to deregister the board in October last year.
The CRB considered the PGDB had an independent purpose to regulate the industry for the benefit of the industry - not the wider public. The PGDB appealed the decision to the High Court in Wellington with a hearing held in April this year, claiming its primary function was to protect the public's health and safety.
In her August 8 ruling Justice Lowell Goddard sided with the board, setting aside the CRB's decision. The ruling means the board will not have to pay income tax.
The CRB said it would not appeal the decision.
The PGDB did not respond to repeated requests for comment but on its website said it spent $24,000 fighting to keep charitable status so it would not have to pay income tax. It said a more than $700,000 surplus booked in 2012 could have been subject to 28 per cent income tax if the CRB's decision had been upheld.
Gordon said the decision reinforces a bizarre situation whereby a registered charity has legislative powers to tax and levy an industry.
"It's just bloody ridiculous. A charity is something you want to belong to, or donate to, for the good of the community."
It's the latest legal skirmish in a long-running feud between Gordon and the federation against a statutory body that has been widely criticised for competency issues.
In August 2010 a report by the Office of the Auditor-General found problems in most of the board's functions. It raised questions about the legal basis of the board's policies and actions, cited a closed and defensive culture, examples of "inconsistent action" and distrust of the board and said it encountered a sector that was characterised by suspicion and discontent.
It said many plumbers and gasfitters were becoming increasingly disaffected, some openly refused to participate in the board's regulatory processes and many challenged the fees they are required to pay. It made 15 recommendations including ensuring it complied with legislation.
Hikes in registration fees from $89 to $500 in 2010 coupled with growth in a disciplinary levy from $50 a year to about $200 per annum galvanised opposition to the board and sparked the formation of the federation with Gordon at its helm.
The federation claims it has 1050 members.
Complaints by Gordon and the federation about the fees were largely upheld by both Parliament's Regulatory Review Committee and the Office of the Ombudsman. The federation contended the board couldn't raise funds from the industry to prosecute non-registered persons and levies had been calculated incorrectly.
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The Ombudsman found a disciplinary levy imposed was unlawful earlier this year and said about $600,000 had been extracted from the industry.
An amendment to the Plumbers, Gasfitters and Drainlayers Bill, retrospectively validating the disciplinary levy, is currently before Parliament.
The Ombudsman said validation of the unlawful levy was a "blunt" means of proceeding and recommended the board engage with Gordon and industry representatives to refund or credit excess levies paid by plumbers.
This recommendation appears to have been ignored.
Plumbers, gasfitters and drainlayers must pay an annual disciplinary levy of $170 and an "offences fee" of $89.
Registration as a plumber, gasfitter or drainlayer costs $409 for each type of registration and a licence for each trade costs $101.
Registration is a one-off fee and all tradespeople must be registered in order to apply for a licence to practice. Licences are only valid for one year.
The Auditor-General found the board had legislative capacity to licence for up to five years. Without a clear reason this policy risked being seen as a revenue-gathering exercise, it said.
The board issued more than 10,000 licences between April 2012 and April 2013. For the year ended 31 March 2012, the latest publicly available statistics, the PGDB suspended one registration and cancelled the registration of one tradesperson. The PGDB suspended or cancelled no licences in 2012.
The Office of the Auditor-General confirmed it was currently reviewing the PGDB's progress in instituting its 15 recommendations. The results of the review would be known by April 2014.
The Ministry of Business, Innovation and Employment (MBIE) said officials meet regularly with the PGDB's chief executive to review progress.
"The Board provided the Government Administration Select Committee with its self-assessment of progress of not only the 15 recommendations but also various other points raised by the Auditor-General," MBIE said in a statement. "A follow-up audit of the Board by the Auditor-General is scheduled to start later this month."
There is also a new accountability agreement in place to 31 March 2014, MBIE said.
- © Fairfax NZ News



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