'Role model' society falls foul of taxman

Society president Nuku Rapana at the Pukapuka community's childcare centre in Mangere. Photo / Natalie Slade

A Cook Islands community that was seen as a trailblazer for "social entrepreneurship" has been forced into liquidation by the Inland Revenue Department.

Pukapuka Community of NZ Inc, established by people from a tiny Pacific island that you can walk around in two hours, employed 65 people at its peak in preschool and tertiary education, social services and at a bakery.

It was described in a book published this year by the NZ Social Entrepreneur Fellowship as "a role model for other migrant groups".

But Inland Revenue has obtained a High Court order placing the society into liquidation to recover a tax debt of $579,000.

Chattels at the Pukapuka community centre in Mangere, including children's play equipment and ovens used for the bakery, were to be removed for sale yesterday, but the liquidators at PricewaterhouseCoopers agreed to give the society more time to come up with a solution.

The society sold the community centre for $1.3 million in March, and a Mangere training centre valued at $680,000 the day before the society was placed into liquidation on May 3. Both properties were bought by Mellons Bay investors Michael and Maria Stephens.

The proceeds were used to pay off a $960,000 mortgage in Mangere and mortgages on a property in Hastings held by Wroxton Finance and Canterbury Trustees.

Those companies then withdrew from the liquidation action, leaving Inland Revenue to pursue the case alone.

Society president Nuku Rapana said the society still owned the Hastings property, valued in 2010 at $405,000, and a property in Brisbane which he said would be worth "at least $1 million". Both have been used as community centres.

He said those two properties were now debt-free and selling them would more than cover the tax bill.

"Our lawyer told the court we can pay this, just give us another month and we'll be able to sort it out," he said.

But Inland Revenue said the society's last five tax payments were dishonoured.

The society's treasurer, Tupuka Tikinau, said the tax arrears dated back to 2003-04 and the society was paying them off on an agreed timetable.

However, Companies Office records show escalating interest and penalties to Inland Revenue of $47,000 in 2007-08, $129,000 in 2008-09 and $258,000 in 2009-10.

No later accounts have been filed.