Sanitarium safe from charity crackdown

General Manager Pierre van Heerden of Sanitarium at the offices in Royal Oak. Photo / Dean Purcell

Food giant safe from crackdown that recently stripped Swimming New Zealand of its charitable status.

Food giant Sanitarium appears to be safe from an ongoing Government crackdown on charities that has some sporting bodies worried they may lose their charitable status.

The maker of Weet-Bix and Marmite has a controversial exemption from paying tax on its business earnings as a result of its ownership by the Seventh-day Adventist Church in New Zealand, a registered charity.

The church's "group one" businesses in this country, which include Royal Oak-based Sanitarium, enjoyed a 2.3 per cent increase in revenue to $191.6 million in the past financial year, according to the annual accounts filed with the Charities Register this month.

Swimming New Zealand was recently deregistered as a charity after the Charities Registration Board ruled it was mostly carrying out activities targeted at elite sport.

"This was found not to be consistent with the Charities Act 2005, which provides that amateur sport charities must benefit a wide section of society," a Department of Internal Affairs spokesman said.

Swimming New Zealand chief executive Christian Renford said this month that deregistration could force cuts in water safety and learn-to-swim programmes.

Other sports groups, including Rowing New Zealand and the Cambridge Bowling Club, are concerned they may face deregistration, which would end benefits such as tax rebates for donors and donations from philanthropic trusts that give only to registered charities.

The Internal Affairs spokesman said no sector, sporting or otherwise, was being specifically targeted, but organisations that "no longer meet a charitable purpose" or fail to comply with their obligations will be deregistered.

There were no issues with Sanitarium's registration, the spokesman said, as "advancement of religion" was considered a charitable purpose under the Charities Act.

That rationale harks back to archaic British law, which some critics argue is no longer relevant in a secular, 21st century democracy.

The relief of poverty, widespread community benefit and advancement of education are also considered charitable purposes under the Charities Act.

Sanitarium has said it operates exclusively for charitable purposes and tax exemptions are available to all businesses that limit themselves to such activities. The firm also points out that it pays all other forms of tax other than business income taxes and employs more than 400 staff. The Seventh-day Adventist Church's charitable activities in this country include the Adventist Development & Relief Agency, schools and aged care facilities.

Distributions in the past financial year included $5.7 million to the agency, $4 million in aged care expenses and $182.5 million for "nutrition, wellbeing and health food activities expenses", according to the accounts, which reported a net surplus of $3 million.

The church's group one accounts booked total income of $204.8 million last year, which included $4.3 million in government grants and $5.9 million in donations.