Social enterprises being held back: report

WELLINGTON: New Zealand’s lack of a suitable framework to support social enterprises — companies that create impact as well as profit — is stymieing a burgeoning sector.

That’s the conclusion of a new report supported by the Law Foundation and commissioned by social enterprise development organisation the Akina Foundation and the Government.

The report, titled ‘‘Structuring for Impact: Evolving Legal Structures for Businesses in New Zealand’’, is intended to provide ammunition for ministers to change the 1993 Companies Act to recognise social enterprises as a legal category.

It was launched last week in Wellington, the same week the Government signed off its Wellbeing Budget 2019.

The new Budget would ‘‘broaden the Budget’s focus beyond economic and fiscal policy by using the Treasury’s Living Standards Framework to inform the Government’s investment priorities and funding decisions’’, the Government said.

The change to the traditional scope of the Budget would result in the Government ‘‘reporting against a broader set of indicators to show a more rounded measure of success’’, it said.

Akina chief executive Louise Aitken has similar ideas about reform of the Companies Act to allow it to reflect the social enterprise sector.

‘‘Our legal structures are built around very traditional ideas that you’re either a business like a limited liability company, or you’re a charity,’’ she said.

‘‘Social enterprises are telling us that they’re caught in the middle. They exist to create maximum positive social or environmental impact, but our current business structures make it challenging for them to do this.’’ — BusinessDesk