With over 70 incorporated community sport organisations dissolved by the Registrar since 1 January and time running out for societies registered under the Incorporated Societies Act 1908 to re-register to avoid involuntary dissolution in 348 days’ time, Parliament must urgently act to ensure that the nation’s community sport clubs continue to deliver key social services to all New Zealanders.
The 22 recommended amendments contained in our submission to the Committee (and reflected in the “Incorporated Societies (Small Societies) Amendment Bill”) are based on three fundamental premises: (1) the Incorporated Societies Act 2022 is not fit-for-purpose for small, volunteer-led community organisations, a significant number of which are sport clubs; (2) there is compelling evidence to illustrate that the compliance obligations of the Act will accentuate the risk of an extinction event affecting these organisations; and (3) the potential loss of these organisations arising from regulatory dissolution will have a profound effect on the physical, social, and mental well-being of all New Zealanders.
For the three-year period from 1 January 2022 to 31 March 2025, over 1,100 incorporated community sport organisations were dissolved by the Registrar of Incorporated Societies, directly affecting over 230,000 Kiwi sportspeople, (based on the average club membership reported by the 2024 National Sport Club Survey). Dissolution removes a club’s statutory identity, exposing members to personal risk and limiting a club’s ability to raise funds and enter into contracts. Involuntary dissolution principally arises from the inability of a club’s committee to meet its compliance obligations.
Reflecting this troubling statistic, over the past five years, as reported by the 2024 National Sport Club Survey, the average number of sport club volunteers has nearly halved, down 45%. Moreover, the proportion of clubs reporting they are now losing money today, compared to 2019, has nearly doubled. With around 7,500 community sport clubs in New Zealand, representing over eighty different sporting codes, we note that the total unpaid value of sport delivery by volunteers through clubs to local communities is estimated to be nearly $1 billion per annum. This social investment is at grave risk.
Fewer clubs and fewer volunteers, means fewer people positively engaged in their local communities in the pursuit of activities which define the Kiwi way of life.
What effect will this have on our society?
Without alleviating the compliance obligations for small societies: (1) the voluntary and involuntary dissolution of incorporated sport entities will accelerate; (2) the recruitment of volunteers to govern and administer sport clubs will be impaired; (3) the ability of sport clubs to deliver the physical and social benefits of organised amateur sport to local communities will reduce; and as a result (4) the overall level of participation in sport clubs nationally will decrease.
In summary, our national sport infrastructure, relies on the delivery of sport through not-for-profit incorporated community clubs which cannot survive without volunteers, who are coaches, managers, and administrators. We are alarmed that officials have continuously denied that there is a problem, despite all of the evidence to the contrary.
We believe that Parliament has a collective responsibility to act, with the Association’s proposals offering a remedy to right a wrong inflicted by well-intended, but poorly executed legislative reform.