The failing RSA that used poppy money to stay afloat - and the untapped $200m veteran ‘gold mine’

Clark, a veteran with 21 years military service, then returned to leadership at Papanui RSA to oversee the sale of its clubrooms and relocation to Papanui Club, with which it has built a relationship.

“It was a sad day in April last year that I was the one to close the place.”

The case of Papanui RSA sits against a backdrop of other struggling clubs across the country - many with asset-rich balance sheets under the strain of dwindling memberships and bar-takings.

The Herald surveyed its accounts with those of the Mount Maunganui RSA and Avondale RSA in Auckland. The three clubs are in a state of flux, seeking or secured in new bases after years of struggling with income from the traditional RSA routes - hospitality and gaming.

And it comes with an assault from veterans’ support group No Duff on the RSA network, claiming RSA clubs hold around $200m in assets intended for the benefit of veterans but now trapped in clubrooms frequented by few service people.

The RSA was formed during World War I in 1916 by returning Anzacs seeking support, fellowship and a national voice for soldiers coming home from Gallipoli and other theatres of war.

For decades it sat near the centre of New Zealand life. In 1947, one in every 13 people held membership.

But in today’s larger, less military-connected society, that has reduced to about one in every 81 New Zealanders.

Of the current 66,000 members of RSAs across the country, it is estimated about 14% have served, or are currently serving, in the military.

Clark told the Herald he was “not aware” of the borrowing of poppy funds but confirmed that - as the accounts showed - it had taken place.

He said the “biggest concern was that we paid all our bills” and “we owe no one any money”. The club’s building and other assets - such as tables - had been sold to settle accounts and secure funds for the RSA’s future.

Clark said the Papanui RSA accounts showed that poppy fund money had been used to meet veterans’ needs. The Herald identified about $330,000 in welfare payments over 10 years from 2016 to the latest accounts. Poppy sales and donations over the same period totalled about $480,000.

He said that poppy funds - as the national RNZRSA guidelines say - “need to be completely separate”.

“A poor decision was made. Whoever agreed to that at the time, that should have raised alarm bells.

“I can assure you every dollar that has been borrowed from the poppy fund will be repaid.

“RSAs were started by Joe Average. They did their best to run the RSAs. I think a lot did their best but didn’t have the support or business acumen to make the right decisions.”

Clark contacted the Herald again after our initial discussion to say that the final $100,000 owed to the poppy fund had been repaid out of the money that came from the sale of the RSA clubrooms.

The Herald contacted a range of people in executive roles at the Papanui RSA over more than a decade to understand how poppy funds came to be spent.

Those contacted could not recall the executive ever discussing borrowing poppy money or that there was a debt.

At Mount Maunganui and Avondale RSAs, discussions are underway about closing their clubrooms.

Mount Maunganui’s RSA is looking at reaching an accommodation with nearby Club Mount Maunganui while Avondale RSA is exploring a closer relationship with the nearby New Lynn RSA.

The Mount Maunganui RSA operates through several linked entities with different functions that have collective net assets of around $42m, almost all in property.

The RSA runs the club itself while its related Mount Maunganui RSA Welfare (Charitable) Trust holds welfare and property-related assets. Separate again is the Mount Maunganui RSA Village Trust, which operates a 45-unit residential village providing affordable accommodation for returned servicemen and women.

The network also included Red Poppy Catering Ltd, the RSA-linked catering and hospitality business that operated from the club premises.

President Dave Corin said: “The club is not insolvent. It’s not meeting its daily costs of running.”

The Mount Maunganui RSA accounts show a two-decade shift from a club supported by strong gaming income and growing property wealth into one increasingly reliant on gaming proceeds, property revaluations and loans within its related entities.

Its latest accounts show membership fell from 3541 to 3476 but also revealed a higher-than-usual percentage (24%) of returned and service personnel among club members.

As the value of its buildings and land soared, the club’s underlying trading position weakened with hospitality operations becoming volatile.

Financial statements and annual reports repeatedly point to pressure in restaurant and club trading despite continued strength in gaming income.

By 2026, the club’s leadership publicly acknowledged it had long struggled to make a profit and was losing money month after month while burdened with debt and maintenance obligations.

Property revaluations helped bolster the balance sheet. A recent review sent the value of its clubrooms from about $9 million to more than $20 million.

But despite soaring property values, the RSA still required a related-party loan facility of up to $250,000 in 2025 to help fund renovations, maintenance and other obligations.

That money came from the associated Mount Maunganui RSA Welfare Trust and carried a 5% interest rate at a time the Reserve Bank’s business lending benchmark was about 6.2%.

Corin said the money was needed to pay holiday and redundancy owed to staff - and to cover the cost of a $50,000 air conditioning unit organised before his time as president.

Corin, who served in the 1960s, said the club was unable to charge market rents for the residential village units. If it could, the income would deliver a cash stream that would allow it to continue.

The money from the sale of the clubrooms would be invested “for decades to come”.

“It’s an investment and it needs to be kept for the welfare of service people.”

It also needs a new generation of service people to connect with the club. Corin said the “youngest” members were largely veterans of the Vietnam War.

“In my opinion, the RSA has been too slow to change. We’ve got to bring in younger members or we’re dead in the water.”

At Avondale RSA, president Gaye Mantell confirmed that members of the club had recently voted to approve the executive committee investigating “the possibility of joining with New Lynn RSA”.

Mantell did not respond to requests for an interview or to a series of emailed questions.

A Herald review of Avondale RSA’s accounts shows a club that looked wealthy on paper while struggling to make money - and as membership fell.

Over the past three years, member numbers have dropped from 415 people to 381 people. While it is unclear how many of those had served, it has been previously found veterans make up about 14% of RSA club members.

Over two decades, hospitality and club trading repeatedly came under pressure as membership fell and operating costs rose. Gaming revenue and property kept the balance sheet stable until the sale of its old clubrooms lifted net assets from about $2.9m by 2015 to about $7.3m in 2019.

Accounts show that peak was eroded to about $6.1m after continuing losses, including a deficit of about $476,000 in 2025.

Across the 20-year period studied, the club appears to have eaten between $1.8m to $2m through operating losses and erosion of reserves.

Pokie machines buoyed the balance sheet with the club pulling in $3.85m between 2016 and 2025. Of that, about $1.6m was spent on club expenses such as wages, power, repairs, security, administration and entertainment costs.

But by 2025, gross gaming revenue of $375,000 produced a surplus of just $551 after costs.

Hospitality also struggled. The bar lost $32,000 in 2021 then $40,000 in 2022 before a small surplus in 2023 and 2024 then a loss in 2025 of $67,000.

Amid fluctuating finances, the associated welfare trust showed modest holdings, growth and payments. It grew from about $181,000 in net assets in 2012 to about $252,000 in 2025 while welfare payments over the same period totalled about $80,000.

Many years showed payments of only a few thousand dollars despite the trust maintaining substantial reserves.

RNZRSA chief executive Evan Williams said the national office would discuss how clubs could protect equity built up over decades if threatened by “failing business models”.

But he said each RSA was independent unto itself and the national office could not directly intervene when issues arose.

Each RSA is an independent body that makes payments to the Royal NZ Returned and Services Association to provide a national voice and provide specific services. The national body does not have direct control over individual clubs.

In relation to Papanui RSA, Williams said the national office was aware of money borrowed from welfare funds among the issues afflicting the club, including the erosion of equity built up over decades.

“We have a firm belief the national office has to protect the social contract the RSA has with New Zealand, which is to ensure that money is going to the right cause for which it was intended. There was a concern that poppy funds weren’t being used for their intended purpose.”

Williams said “strong advice” had been offered but the structure of the RSA movement meant “they are an independent association”.

The “gold mine” of RSA assets was met with less equilibrium by Aaron Wood, co-founder of the No Duff charitable trust that provides welfare support for veterans, including emergency responses considered to have saved lives.

Told the value of Mount Maunganui RSA’s property holdings, Wood’s response was unprintable. He said it was frustrating that funding wasn’t able to be spent by the RSAs themselves or touched by anyone else.

Such funds - if liberated - would be enough to run No Duff for 159 years at $289,000 annually, he said. “There’s all the money in the world to fix stuff but it’s not being used. It’s sitting in places no one can take it from.”

Wood told the Herald that No Duff had carried out an exercise around 2017 assessing about three-quarters of RSAs and estimated the wider movement had around $200m in clubrooms and land.

“That’s a conservative estimate.”

He said it would be expected that the value was now much higher and hadn’t taken into account the $100m that former NZRSA president Martyn Dunne estimated had been lost to the movement by collapsing clubs.

Wood said it was money that should be used to help and support veterans now, of which there were estimated to be around 50,000 in New Zealand. He said estimates that 14% of RSA membership had served or were serving meant there were around 10,000 veterans in the movement - a fraction of those who existed.

However, he said many RSA clubs were focused on remembrance with a particular focus on Anzac Day and did not provide effective, rapid welfare responses to veterans in need.

He said contemporary veterans were “staying away in droves” from many RSAs because “you’re not doing what you should be doing”.

“If you’re going to be part of that organisation then you’ve got to do what it says on the tin. They’re not walking the talk when it comes to frontline veteran support.

“There needs to be a complete reorganisation of the RSA from the top down. There needs to be a reckoning.”

Wood said RSA clubs across the country were custodians of assets bought with money intended to provide support to veterans.

“That’s the sole reason for its existence.”

He said it was particularly critical given there was no official record of how many veterans existed, no data collected on veteran suicide and no measure across government systems of need.

“The RSA needs to be taken apart and put together into a functioning organisation that is focused on support as a primary output and then remembrance. Keeping veterans out of an early grave is much better than polishing a grave.”

In relation to the RSA asset base, Wood had a message for club members: “It was never there for you. If you don’t recognise this, you’re the problem.”

David Fisher is based in Northland and has worked as a journalist for more than 30 years, winning multiple journalism awards including being twice named Reporter of the Year and being selected as one of a small number of Wolfson Press Fellows to Wolfson College, Cambridge. He joined the Herald in 2004.

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