CHARITIES (AMENDMENT) BILL

CHARITIES (AMENDMENT) BILL: Order for Second Reading read.

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The Minister for Community Development, Youth and Sports (Dr Vivian Balakrishnan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

There has been greater awareness of the importance of governance of charities in recent years. The Council on Governance of Institutions of a Public Character (CGI) was set up in January 2004 to set the minimum standards of governance and to play an advisory role in promoting good governance for Institutions of Public Character (IPCs). The CGI submitted a set of 19 recommendations which cover fund-raising practices, financial controls and accountability of IPCs, amongst other items. The Government accepted 15 of these recommendations in full, another three with modifications, and the remaining recommendation for adoption as a best practice. The mandatory CGI recommendations came into effect from 1st July 2006.

Following the National Kidney Foundation (NKF) episode, the Government formed the Inter-Ministry Committee on the Regulation of Charities and IPCs (IMC) - I apologise for the acronyms. We set this up in October 2005 to review the regulatory framework for charities and IPCs. In arriving at its recommendations, the IMC studied the recommendations of the preceding CGI and the specific governance-related issues that were raised in the KPMG report on the NKF. After extensive public consultation, the IMC presented its recommendations in March 2006, and the Government accepted all its recommendations.

Guiding principles

As enunciated in the IMC report, the key guiding principles for our regulatory approach are as follows:

First, the regulatory approach should nurture a charitable sector that remains driven by the community.

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Second, the boards of charities and IPCs are ultimately responsible for and accountable to all their stakeholders. The boards, therefore, need to take ownership in order to improve the governance of their respective organisations.

Third, the regulatory approach should encourage self-regulation within the charity sector.

Last but not least, the regulatory approach should not be a "one-size-fits-all" but instead will be stratified, with larger charities subjected to more stringent rules compared to smaller ones.

Mr Speaker, Sir, the Bill before this House therefore seeks to amend the Charities Act to incorporate the IMC recommendations. I am also taking this opportunity to make some other amendments to the Charities Act in order to strengthen the regulatory role of the Commissioner to complement the implementation of these recommendations.

Sir, I would like now to draw the attention of the House to the main clauses of the Bill. I shall begin with those that relate to the IMC recommendations.

Expanded powers of the Commissioner

The IMC recommended granting the Commissioner additional powers in order to be more effective for the protection of charities and the public interest.

Clause 10 inserts a new section 25A which empowers the Commissioner to suspend or remove any trustee, charity trustee, officer, agent or employee of a charity from being a member of that charity. This section, however, shall not apply to an exempt charity.

Clause 11 inserts new sections 26A and 26B to empower the Commissioner to

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make orders on the application of the property of a charity under certain circumstances.

Clause 15 inserts a new section 39B, within Part VIII of the Charities Act, to empower the Commissioner to prohibit, stop or restrict public fund-raising by a charity or person, including a commercial third party fund-raiser, where such a course of action is necessary in the public interest.

Consolidation of regulatory powers under Commissioner and Sector Administrators

Clause 17 inserts a new Part VIIIA, comprising new sections 40A, 40B and 40C, to provide for the making of regulations pertaining to IPCs and also to define the statutory role, functions and powers of the Sector Administrators. These are sectoral regulators appointed to assist the Commissioner in regulating the overall charity sector. The Sector Administrators cover six sectors, namely, the social service, education, arts and heritage, community and youth, health and sports sectors.

Establishment of the Charity Council

Clause 6 inserts a new Part IIA, comprising new sections 4A and 4B, to provide for the establishment and functions of the Charity Council. This is one of the key recommendations by the IMC. The purpose is to introduce people sector involvement in the regulation of charities and IPCs, especially in the promotion of good governance and best practices.

Sir, I shall now move on to the amendments arising from recommendations that were not covered by the IMC. I would like to assure the House, first of all, that we are very mindful of the need to refrain from over-regulation so as not

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to stifle the charity sector while proposing additional amendments to the Charities Act. The additional clauses would not impose regulatory burdens on charities and IPCs but only seek to penalise those who commit offences under the Charities Act.

Sir, I will begin with the amendment to provide the Commissioner a discretionary power to refuse registration of, or to de-register, any charity.

Additional legislative amendments

Registration and de-registration of charities

Under the existing Charities Act, the Commissioner cannot refuse registration of organisations with purposes that are or that purport to be exclusively charitable. This may inadvertently lead to the registration of suspect organisations. The Commissioner is also unable to de-register any charity unless it ceases to exist, is no longer in operation, or its purposes have been changed such that they are no longer exclusively charitable.

To protect the public interest and to ensure that in future only bona fide organisations are registered as charities, clause 7 amends section 5 of the Act to provide for the grounds on which the Commissioner shall refuse to register an institution as a charity, or shall remove a registered institution from the register of charities, such as where it appears to the Commissioner that the registration of such an institution will be contrary to the public interest.

Sir, I would like to assure the House that the office of the Commissioner had sought public feedback on all its proposals to tighten the charity registration process during the last two months. The public and the charities in general have welcomed this move and supported the proposals on having conditions for

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registering and de-registering. The conditions for registration and de-registration of charities will be provided for in the regulations which will be brought into effect after this amendment Bill is passed.

Objectives and functions of the Commissioner

In order to better define the objectives and functions of the Commissioner, clause 5 repeals and re-enacts section 4 for this purpose. In addition, clause 4 amends section 3 of the Act in relation to the powers, duties and functions of the Deputy Commissioner. Clause 4 also explicitly empowers the Commissioner to delegate specific powers, duties and functions to Assistant Commissioners.

Power to prosecute

Clause 20 inserts a new section 47A to provide for the prosecution of offences under the Charities Act by public officers authorised by the Commissioner with the consent of the Attorney-General. This is necessary because the powers of prosecution of charities are currently derived from the IRAS Act as the Comptroller of Income Tax is currently also double-hatting as the Commissioner of Charities. With the transfer of the Office of the Commissioner from IRAS to MCYS, it is necessary to amend the Charities Act so as to empower the Commissioner to authorise other officers to prosecute charities for regulatory non-compliance.

Power to compound

Under the current Charities Act, the provision for the composition of offences under section 47 provides an offender a chance to avoid prosecution and conviction in court for less serious offences. To minimise the number of offences that require prosecution, clause 19 amends section 47(1) to increase the maximum composition sum to 50% of the amount

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of the maximum fine prescribed for the offence. This means that the maximum composition sum would be increased from the current sum of $500 to a sum ranging from $2,500 to $5,000 depending, of course, on the offence. The composition sum will be tiered according to the seriousness of the offence, with the maximum quantum being meted out only for the more serious offences.

Continuing offences

To ensure that the underlying obligations are met even though the offender has paid the fine, I propose to make provisions for penalties for continuing offences. Clauses 8, 9, 10, 11, 12, 13, 14, 15 and 21 amend the Act to provide for the punishment of a continuing offence of a further fine not exceeding $50 or $100, depending on the offence, for every day or part thereof during which the offence continues after the conviction.

Protection from liability

Finally, clause 18 inserts a new section 46A to protect the Commissioner and other officers, and the Sector Administrators, from liability for anything done by them in good faith in the course of exercising their power, discharging their duty or performing any function under the law.

Sir, the charity sector is an integral part of the Government's "Many Helping Hands" approach as the charity sector plays a very important role in serving the community. The Government is, therefore, committed to facilitate the growth of the charity sector whilst not over-regulating the charities. Whilst the Government can put in place basic regulations for the sector, ultimately the best form of regulation is still self-regulation. Charities should ensure that they are well-governed in order to win the trust of the public, especially their donors and volunteers,

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because, ultimately, the charity sector can grow only with strong public support.

Sir, I beg to move.

Question proposed.

3.13 pm

Mr Sin Boon Ann: Sir, before I begin, I would like to declare that I initiated the incorporation of an entity that is in the process of being registered as a charity.

The Charities (Amendment) Bill could not have come at a more appropriate time. The on-going law suit by the present board of the newly-constituted NKF against some former board members is yet again another reminder that organisations that raise money from the public in the name of charity should not be left entirely on their own to run their affairs with limited or no supervision. The NKF saga should no doubt serve as a salutary lesson for us and for which this Bill before us is an attempted response to fix a weakness in the system.

This Bill seeks to amend the parent Act by providing, inter alia , additional functions, duties and powers for the Commissioner. Besides, the proposed amendments also seek to improve the administration of institutions of public character.

I support the passing of the Bill mainly because I believe it tries to strengthen the foundations of our charities here in Singapore. The loss of faith by the public in the old NKF made it necessary for us to take steps to restore the trust and confidence in the process of raising funds from the man-in-the-street for charitable purposes, and to put in place safeguards to ensure that funds are properly spent. That said, I have some observations to make as a matter of principle when

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looking at our policies in regulating charities.

First, one of the biggest challenges in formulating charity-related policies lies with striking the right balance. The principle that underpins our welfare approach is the many-helping-hands approach. Indeed over the years, many VWOs have emerged to work alongside the community and Government agencies, as part of the many-helping-hands, to help needy Singaporeans. These VWOs were able to undertake their work more easily because they could rely on the generous donations from the public. Yet, as we have seen with the NKF episode, it is unwise to expect that these charities will be able to regulate themselves effectively and meet the standards of governance expected of them by the public. There is therefore an expectation from the public that charities must now be more tightly regulated. The issue really is: how far should the state regulate these charities in the public interest without at the same time imposing too much fetter on these bodies to a point where it becomes counter-productive? The people who run these charities must be able to get on with the business of running these charities without at the same time having to worry too much about the regulator knocking at their door at midnight.

It would indeed be sad if these well-meaning volunteers decide to throw in the towel simply because the red tape is just too much.

Secondly, the other challenge, of course, is to provide these charities with sufficient clarity in rules to enable them to comply with what is required of them. I will expand on this later. But suffice to say, for now, that we do not want our charities to pore through voluminous amount of rules and bye-laws. Again, one would say that that would be an over-kill. What we should be concentrating on is to have a code with well-illustrated principles that would guide the conduct of these

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bodies, rather than an elaborate list of chapters and verses. We want a culture of governance to evolve, rather than one that is dictated by rules and bye-laws.

Thirdly, and related to the point made earlier, is the issue of the increasing burden of operating cost arising from the new standards and regulations that these rules are expected to impose. To comply with these new provisions, charities will now have to seriously consider relying on more outside help. Any well-meaning charity that seeks to comply with these rules will think hard about getting professional help; whether it be in audit or otherwise. This would unnecessarily add to the operating cost of the charity as professionals, and I can vouch for that, are expensive to hire. Sir, the point is, well-meaning and dedicated charities are not necessarily your most well-endowed ones, financially. The challenge would, therefore, be how to strike a right balance without throwing the baby out with the bathwater.

Fourthly, our regulations that govern charities should work towards targeting, not only those who run charities, but also providing an adequate framework that allows supporters of these charities with enough information, both with respect to the work and the performance of these charities on a regular basis, in order that they may better understand and make better informed choices of what they do. We want our donors to make informed choices. In principle, charities that do not have properly defined programmes, or clearly established performance milestones and governance standards, will have a harder time explaining to their patrons why the next dollar should go to them. Donors, as much as consumers at the marketplace, must be given the ability to make informed choices about where they want to put their hard-earned money, even if it is meant to benefit the less fortunate. In other words, we should, as a matter of principle, emphasise more on

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disclosure in the charity sector. By disclosing, the public will have a better sense of how their money is spent.

Against the broad canvas set by some governing principles that I would like to see governing our charities framework, I would now like to turn specifically to the provisions of the Bill.

Clause 5 of the Bill seeks to amend section 4 of the Act by seeking to provide greater focus on maintaining public confidence in charities and in promoting growth of the charity sector, promoting good governance and regulating for compliance. Towards this end, the functions of the Commissioner would include, inter alia , the determination of whether institutions are charities, and to investigate and take the necessary remedial action where there is misconduct on the part of the charity concerned. Additionally, to enable the Commissioner to discharge his functions, there are now more teeth being given to his office to, for instance, suspend the relevant person as a member of the charity and, as a final move, to register the charity concerned to the extent that it has been remiss or fraudulent in the conduct of its business.

Sir, I welcome the tightening of the existing Act. However, I feel that more could be done to take it some steps further. I can cite several examples where clearer legislative guidance would be of help. For instance, the amendment Bill gives the Commissioner wide ranging powers to determine if a particular organisation is indeed a charity. However, this begs the essential question of what is a charity in the eyes of a Commissioner and who should qualify. Previously, the Commissioner of Charities is unable to refuse registration of organisations as charities if they are set up exclusively for charitable purposes. Also, the Commissioner is unable to de-register any charity unless it ceases to exist or is no longer in operation or its objectives have

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changed. Under the present amendment, the Commissioner is given discretionary powers not to register and to de-register an existing charity that does not meet the public interest requirements. The question really is: what is in the public interest? Is it to be determined, as they say, in the court of equity, by the length of the Chancellor’s foot? The extensive powers given to the Commissioner comes with the expectation that close guidance should be issued from his office in order to guide and help the public to better understand what the Government’s definition of a charity is. For instance, one would accept that any charity that expects to be registered must conform with the social mores of the time. One would not expect, for example, the Commissioner to register a society as a charity that is committed to the promotion of the benefits of voodoo magic in our society; or for that matter, a charity that is dedicated to the promotion of sexual freedom. While these examples may not obviously be supported, there are others, I am sure, that are less clear. I am thinking of, for instance, charities that are dedicated to the promotion of same gender unions or charities that strongly support the abolition of abortion. How and on what basis should the Commissioner decide whether such charities should be allowed to register and, if registered, guide the conduct of the activities of these societies or organisations with respect to their dealings with the public?

This leads me to a separate but related point. Presently, there is nothing in the amendment Bill that allows for appeal from the decision of the Commissioner. Following the amendment, it would appear that there is little recourse by way of an administrative appeal to the Minister if the Commissioner decides either not to register a charity or if he decides to de-register the charity. Ordinarily, it would not be unusual in an act for an appeal to

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be made to the Minister against the decision of the department concerned. Unfortunately, such a statutory right of appeal is missing under the present amendment Bill. Is this omission intended by the Government? If it is, I should be grateful if the Minster could give an explanation as to the reason why it is missing.

Presumably, much of the work of the Commissioner will be guided by the Charity Council, the formation of which is contemplated by the present Bill. This brings me to the next point. Clauses 4A and 4B relate to the formation and functions of the Charity Council. Clause 4B, in particular, provides that it shall be within the remit of the council, inter alia , to advise the Commissioner on any question that he may refer it, to make such recommendations to the Commissioner and to promote self-regulation and good governance. These are indeed very heavy and onerous responsibilities for the council to discharge, and I welcome it. However, if it is the job of the Commissioner to promote public trust and confidence in the charities, much of that must surely begin with the necessity of appointing good men and women to the council. The composition of the council would be crucial as it would appear to be expected to play a part in helping the Commissioner to decide which charity operates in the public interest and the one that does not, and also to help set the standards of governance for these charities. Unfortunately, the Bill does not give much guidance as to how the Government should go about appointing people to the council. Should the council be expected to have a fair mix of established operators, Government representatives, donors and recipients so that there will be a fair balance in the views represented; should there be a code that governs the conduct of the council in the deliberations, in as much as charities are now expected to abide by a certain standard of conduct that will be

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established by the Commissioner? I should be grateful if the Minister could throw some light on this.

Next, clause 39A provides that no person shall conduct or participate in any fund-raising appeal unless he has a permit or is exempted from having to comply with the provisions of the Act. "Fund raising appeal", under clause 39, has been defined as, and I quote:

"(a) an appeal, whether made expressly or impliedly, to any member of the public to give money or other property (whether for consideration or otherwise) which is made in association with a representation that the whole or any part of its proceeds is to be applied for charitable benevolent or philanthropic purposes; or

(b) a receipt from any member of the public of any money or other property (whether for consideration or otherwise which is given in whole or in part for any charitable benevolent or philanthropic purposes)."

Looking at the prohibition in clause 39A and the definition of fund-raising appeal in clause 39, it would seem the net may be inadvertently cast more widely than it is intended. For instance, if a newspaper article were to highlight the plight of a family in financial difficulty, with a view to soliciting public sympathy and perhaps donation, would the journalist or the newspaper be impliedly appealing to the public to give money for a benevolent cause, something that is proscribed by clause 39A of the Bill? Additionally, if you were to give someone money out of sympathy, would the money that you give to the member of public for a benevolent reason be caught under sub-clause (b) which seems to prohibit such an activity?

Quite clearly, the situations I just described are not the sort of mischief that the Bill seeks to correct. Nonetheless, if you look at the way fund-raising appeal is

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defined, it does give rise to a certain level of uncertainty which is unsatisfactory from a drafting point of view. I hope the Minister can shed some light on this.

Finally, the Bill seeks to define what an institution of public character ("IPC") means and to set out an administrative framework that allows the Sector Administrator to regulate charities, including approving institutions as IPCs, within their respective sectors. I support the streamlining of the administration of the charities and IPCs along the lines suggested by the Bill. However, if the administration of charities and IPCs are to be divided among the Sector Administrators, one question that arises is whether there will be any assurance that the quality of administration will be uniform across all sectors. In other words, would the bar to qualify as an IPC be the same across the sectors? What assurance will the public have that the standards, especially with regard to defining an IPC, be the same?

Sir, this amendment Bill is certainly a welcome and timely change to our Charities Act. We need to strengthen public confidence and trust in our charity sector. This is absolutely crucial to our approach of relying on many helping hands to support the needs of the poor and needy in our society. However, our strategy of leaning on voluntary groups to provide the needs does require, on our part, a certain delicate balancing between the need for tight scrutiny and transparency, and the need to provide some flexibility to the charities. How that balance should be calibrated would very much depend on the Commissioner and the Council that would seek to assist him in this task. For now, the Charities Act and its amendment seek to provide a robust framework within which the Commissioner is to undertake his work. The devil as, they say, is in the details. I do hope that over the months, the Commissioner will come up with clear

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guidelines and codes of conduct and governance to let the public know what the expectations are, and not just leave them to second guess.

With that, Sir, I support the Bill.

3.27 pm

Dr Vivian Balakrishnan: Sir, I propose to respond to the Member's speech in inverse order. I will deal with his specific points first and then return to the more general points.

The Member referred to clause 5, which sets out the duties, functions and powers of the Commissioner. Amongst the list of questions he submitted was the definition of a charity, how would the Commissioner decide what is in the public interest and why there is no formal route of appeal against his decisions.

The definition of a charity is actually a rather difficult one. I have discovered that it has actually taken almost 400 years of English case law, modified by local experience, in order to generate the list which is contained in the Bill. But just for the record, I would read out the list of what charitable objects are. First, the relief of poverty. Second, the advancement of education. Third, the advancement of religion. And fourth is a multi-limb clause - other purposes beneficial to the community, such as the advancement of health; the advancement of citizenship or community development; the advancement of arts, heritage or science; the advancement of environment protection or improvement; the relief of those in need by reason of youth, age, ill-health or disability, financial hardship or other disadvantages; and the advancement of animal welfare. So it is a very wide spectrum.

What we are trying to do here is not to redefine a charity, but rather to give

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the Commissioner more flexibility, to see whether someone who puts up his hand and says, "I am pursuing one of these objectives", is really doing so in a bona fide organisation and in a way which is acceptable to the public. So it is really for the Commissioner to exercise judgment on behalf of the public interest.

How will the Commissioner decide then what is in the public interest? The key here is to consult the public widely that this is, at the end of the day, a community effort and, therefore, no one man, one council, one board or one Minister can or should unilaterally decide what is in the public interest. I give you that assurance that in the exercise of these powers, the Commissioner will consult widely. That is also why we set up a Charity Council to provide a ready avenue of people to provide opinions and guidance to the Commissioner in making these difficult decisions.

Thirdly, we have also set out, in our amendments, that the grounds on which he decides, to either de-register or refuse to register, would be set out. In other words, we would do this transparently and a decision would be out there for the public to see and to make their own judgments on.

Consequently, I decided that there was no need to set up a formal route of appeal to the Minister because the process would be done through wide consultation; the process would be published and everyone would be in the loop. But having said that, if anyone subsequently does feel aggrieved, he can still write to me. I promise Members that I will still take it up, look at it, discuss it with the Commissioner, discuss it with the Charity Council, and, of course, with the relevant stakeholders. Of course, in extremis , there is still the right of judicial review. I give Members that assurance that the Commissioner of Charities will

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exercise this power flexibly, but carefully, and in the public interest.

His next point was on clause 4. I agree with him that in the establishment of a Charity Council, we must get people with standing in the community; people with experience in the voluntary sector; people with financial, legal, entrepreneurial experience; people who will bring diverse perspectives to bear on this very difficult and heterogeneous sector. I would tell Members honestly that it is difficult to assemble that Charity Council. And I am very grateful to the pioneer batch who has agreed to serve on this.

I agree with him that as they get into the saddle, they will also have to devise the work processes, the norms and the means of consultation because the key reason we chose to have a Charity Council, as opposed to just empowering the Commissioner with more teeth, is to send the message that we want this charity sector to be self-regulated and we want people from the community to come up and to help the sector stay viable and safe.

On the Member's specific question on fund-raising appeal - has the definition of this been too wide? He cited two examples - in a newspaper article and personal private donation. If a newspaper article is written to convey news, it is certainly not a fund-raising exercise. But I am aware that sometimes the way it is written sails very close to that definition. So far, no article has crossed that line. But, nevertheless, I think journalists will exercise the power of the pen responsibly, that they are meant to convey news, maybe to convey comments on an event, but they should not be embarked on a fund-raising exercise. If they wish to do so, then apply for a permit. Similarly, out of the goodness of your heart, if you make a personal donation to someone whom you happen to know and is in need, we are not going to deem this as a

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public fund-raising exercise. So, again, I give him the assurance that commonsense will prevail.

On his point about sector administrators, I agree with him absolutely that there is a need to maintain uniformity of standards across all the sectors, and that is why, again, we need to make sure that when we start this system, there is a lot of consultation, collaboration and calibration across all the sectors. We are thinking of establishing an Accounting Standards Board under the aegis of ACRA which will help devise accounting standards which can be applied to these other non-corporate sectors as well. That will give everyone a common term of reference in order to generate their reports and in order to comply with the standards.

Let me come back to the more general points. I agree with the Member absolutely that we have to strike a balance. This is not one of those sectors where the Government can solve it by throwing lots and lots of red tape, and lots and lots of fines or penalties. This is a sector which depends on human compassion, generosity of spirit and the ability to self organise in order to keep it going. So what we are really after is to give people, ordinary members of the public, trust and confidence in the charity sector, and we believe this can best be done by having total transparency. In fact, the bulk of all the rules and so-called impositions that we are placing on the charity sector is really to provide more information. That was his fourth point.

If I could summarise, it is about trust and transparency, and provide all the information that the public needs, all the information that the donors and volunteers need, so that they have an assurance that their money and the time that they donate are put to good use and, if I may add, to also show the value of the services that have been delivered; in other

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words, what is the output, ie, do not just show the input equation but show the results of your intervention and services to the community.

I agree with his second general point that there is a need for clarity in rules. The speech that I have just made, and I mentioned sections here and clauses there, that is not the way in which we will govern the sector, but good examples, work examples or problems from the past will be written up, discussed and presented, so that people know what to do and what not to do in the future. And the Member is quite right, it is really about generating culture, rather than creating new codes. That is what we hope to achieve in this collaborative approach between Government, the voluntary welfare sector and the Charity Council.

On the third point, will more charities need professional help, specifically more on auditing and accounting services, and, therefore, will that raise cost? My answer to that is, that is why we are choosing a tiered and not a one-size-fits-all approach because you will then end up with a very rigorous and onerous system, which the small fledgling charities would not be able to afford.

So I would give him the assurance that it will be a light touch for the small start-ups but, certainly, as an IPC or a charity grows bigger and behaves, to all intents and purposes, like corporations, it must then be subject to the more onerous standards which we expect of a company or a corporation.

I agree with his fourth point which is that all the supporters of a charity or an IPC deserve more information. The currency is money and time from supporters and, in return, the charities must provide information to the supporters - information on how your money is spent,

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information on the output and the effects of the programmes which you have funded.

Mr Speaker, Sir, this Bill, unfortunately, has come at a time when perhaps we are reacting to events which have caused public consternation. But even if you put that aside, I think the direction in which we are amending this is still correct and is appropriate for the future that we are trying to steer the charity sector towards. So, remember the fundamental points - that it is about self-regulation, it is about trust, it is about transparency and confidence.

Mr Sin Boon Ann: I want to thank the Minister for his comprehensive response to my comments on the proposed Bill. I just have a point of clarification to make. The Minister said earlier that the Commissioner would decide on what a charity is after he has extensively consulted the public, to get a better sense. So we have, through a process of public consultation, come to an understanding of what exactly is a charity that meets the public interest. Perhaps the Minister can clarify how the Commissioner - or perhaps it is early days - may want to go about undertaking this work.

Dr Vivian Balakrishnan: As I said, the specific objects of charity are already fairly well defined. What I am more concerned about is someone who looks through this and says, "Ah! I can set up a charity for the welfare of children because it seems to fit." What I am more concerned about is whether that organisation is really out to do the service that it purports to be. Having said that you are going to do that service, are you really organised - do you have the people, the volunteers, the expertise, and the funding in place? So, it is more a check on bona fides rather than a question of whether a certain objective is charitable or not because that, I believe, is fairly well

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established by convention over the last 400 years.

Mr Sin Boon Ann: Sir, in my speech, I also alluded to the slightly more difficult categories which change with the social mores of the time. One accepts that education is one of the categories of charity which is well recognised by common law. But what if you turn the education or the benefits of promotion of same gender union in a marriage as a charitable cause? Then, who defines whether that is a charity which is in keeping with the changing values of our time?

Dr Vivian Balakrishnan: Is that a hypothetical question or is there an application pending? If there is an application pending, I do not want to pre-judge it at this point. The Member is right that ultimately there is a judgement call. Like all judgement calls, you cannot make everybody happy. The Commissioner will have to ensure that his decisions are consistent with his assessment of where the public, in general, stands on a particular issue. I cannot be more specific than that. But you have to ensure that it fits with the public policy, as stated by the Government and the mores, the values and the views of the general public. And because we live in a diverse society, it is impossible to cater to every single view, some of which may be on the margin or even extreme.

Mr Zaqy Mohamad (Hong Kah): Sir, in the industry today, I think there is a perception of risk in dealing with the charity sector. If you look at a lot of IPCs, they are facing difficulties in getting auditors to audit their books at a reasonable rate. Many have already increased prices or even backed out of this market, sad to say. So, what plans does the Ministry have to work with the industry to address this?

Dr Vivian Balakrishnan: That is a valid observation. I think, after the recent

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events, auditors have realised that this is no longer just a small act of charity. Auditing an organisation is a serious job and comes with all the accountability and responsibility of auditing any other company or commercial entity. With this realisation, auditing firms which in the past would devote very little bandwidth and, therefore, could agree easily, now have to be more cautious in their commitments. But having said that, I think a new equilibrium will arise. Yes, in some cases, auditing fees have gone up. But in so far as I see it, the fee is a reasonable one that recognises the serious responsibility and accountability that come with the job. I think that is something which we should not begrudge them because it is a job, and their professional standing is on the line. How can we help? There have been some suggestions, for instance, to make sure that the financial year for charities perhaps not be in sync with the commercial sector because when everybody is jam-packed the last minute and you are short of staff. So, we will look at creative ways in which we can reduce the load on both the charity sector as well as the auditors who are performing this service. But, at the end of the day, I am saying it is a professional service and one that we should pay a fair rate for. Expectations are then set and the key thing is you assure them that when someone signs off on the annual report, you know it is a fair and accurate representation of the state of affairs in that organisation.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill.- [Dr Vivian Balakrishnan].

Bill considered in Committee.

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Dr Vivian Balakrishnan:

The Chairman: The citation year "2006" will be changed to "2007", as indicated in the Order Paper Supplement.

Clauses 1 to 23 inclusive ordered to stand part of the Bill.

The Schedule ordered to stand part of the Bill.

Bill reported without amendment, read a Third time and passed.