Posts by Alfie
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Polity: Is being a tax haven worth it?, in reply to Amanda Wreckonwith,
Link to Slater – result!
There are interesting links appearing all over the place.
Today’s Stuff editorial points out the potential damage to New Zealand’s good reputation and calls for decisive action.
On 3 News last night Key tried to rebrand Nicky Hager as a conspiracy theorist, which is pretty low in the circumstances. While a rather large conspiracy is certainly emerging, it’s Key whose hands are looking dirty.
I'm impressed with Peter Dunne’s stand. He’s pissed off that during his eight years as Revenue Minister, nobody from the IRD flagged the “explosion” of foreign trusts in New Zealand. It’s great to see Dunne taking a strong line on the ultra-wealthy exploiting our lax tax laws, and NZ being openly promoted as a tax haven by a small cabal of lawyers and psuedo-lawyers. He said…
The bottom line is that being labelled a tax haven has in transparency and reputation terms, the same impact that an outbreak of foot and mouth disease would have on our reputation as viable primary producer.
Morning Report noted that when Key was asked why foreigners with no business or connection with NZ should operate trusts in this country, he had no answer.
He knows.
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There are strong suggestions that Fairfax and APN may merge. The resulting company would own a huge share of the NZ media landscape, reducing competition considerably.
An announcement is expected tomorrow.
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RNZ reveals that four of the five law firms who summoned former Revenue Minister Todd McClay to the "My mate John suggests..." meeting have ties to Mossack Fonseca. Auckland-based firm Cone Marshall features most prominently.
And despite assuring the PM that he had no connection to Mossack Fonseca, it seems that Key's personal non-lawyer, Ken Whitney, was not being entirely truthful.
The Panama Papers also show the man who has long handled Prime Minister John Key's personal legal matters, Ken Whitney, had links to Mossack Fonseca through two companies - registered in the British Virgin Islands, with Mossack Fonseca as their agent. Mr Whitney also acted as a referee for Karen Marshall of Cone Marshall in 2009.
Q: How many lawyers does it take to change a junior Minister's mind?
A: Only four. The fifth one wasn't a lawyer.
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A few interesting links on the Panama Papers.
The ICIJ has a huge amount of information online already including a long read showing some of the individuals involved in tax evasion and this little game which shows how easily money can be laundered and tax evaded.
On the local front we have Nicky Hager on selling secrecy, this from the RNZ team placing NZ at the heart of the scandal, and a piece from Andrea Vance at TVNZ showing that NZ ticks all the boxes to qualify as a tax haven.
No Right Turn looks at David Cameron’s anti-corruption summit and asks just how cynical is the choice of NZ’s representative, Judith Collins. Although to be fair, Judith has proved that she knows more about corruption than the rest of the cabinet put together.
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New Zealand's international reputation taking a hit is one thing. But the average Joe Blow in the street will probably go meh and forget all about it because it has no affect on his life.
But let's assume that this squirming from Key and his associates has a much darker side. The important question which should resonate with kiwis is, how much tax revenue is NZ losing because wealthy kiwis are stashing their wealth in offshore trusts?
While John Key (RNZ, sorry - can't find a link) told us last week that he'd checked with his lawyer Whitney (who we now know is not really a lawyer) and he'd confirmed that the PM has "no investments in Panama". Was that always the case? And where exactly are Key's assets stashed nowadays? How many of his friends and colleagues operate offshore trusts?
Some serious follow-up questions are required.
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Polity: Is being a tax haven worth it?, in reply to Paul Brislen,
There has to be more to it than that and that, frankly, worries me
Exactly. Keep in mind that Mossack Fonseca is only a small part of the conceal-your-money offshore puzzle. While Key and his mates have undoubtably sold NZ to the world's super-wealthy as a tax haven, I suspect that it also works exactly the same, the other way around.
In other words, while this won't be revealed in the Panama Papers, many wealthy New Zealanders will be using other offshore companies to hide their assets and avoid paying their fair share of local tax. That's why there's a bit of a scramble going to make this issue go away.
Following Key's refusal to keep his RNZ appointment today, Katherine Ryan commented that Key is making himself look increasing guilty as this drama unfolds.
"All perfectly legal", "nothing to see here", "the IRD has other priorities"...
Of course there's more to this and some rather important people would rather we didn't find out about it.
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While John Key maintains that offshore trusts are used for “many legitimate purposes”, I’ve yet to hear of one. Apart from tax avoidance/evasion of course. Labour is calling for foreign trusts to be banned altogether, which seems like a fair call in the circumstances.
The SST is carrying an odd little story about another offshore Trust based in NZ. This one is called In Fiduciary and it’s based in Dunedin.
In Fiduciary’s website espouses the benefits of keeping money in trusts in New Zealand: “Advantages of using this jurisdiction are that New Zealand does not look like a ‘tax haven’ such as BVI (British Virgin Islands), Samoa, Cyprus, Jersey, etc, and that it is generally regarded as a high tax-paying country,” the In Fiduciary Services Ltd website says.
They state that NZ does not “look” like a tax haven which gives you a fair idea of the “services” being offered by the In Fiduciary Trust top offshore investors.
The NZ page of their website explains that they use “a dedicated company as trustee for each trust” and that in this country the trustee “does not have to disclose the name of the settlor and/or beneficiaries.” In other words, we help you hide your stuff.
The story gets interesting when you learn that the Republic of Macedonia is seeking to liquidate the Trust over a $1.6m unpaid debt incurred following a US investigation into money-laundering. The Trust has denied this, but the current local director of the Trust didn’t sound 100% certain.
Francken said he did not think Guardian had been involved in money laundering…
Hardly a confident response, is it. And just a thought… if fiduciary means "a legal or ethical relationship of trust", does In Fiduciary translate as a lack of trust?
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If you'll indulge me, one other small story from Darby St.
The graphic artist who shared our offices was called Colin (McLaren, I think) and he was a top bloke. Art NZ was one of his regular clients. It was Colin who introduced me to the concept of the eternal kettle element.
Back in those days when the world was still in B&W, electric jugs didn't have automatic cutoffs. Because we were all busy, someone would inevitably leave the kettle switched on and burn out the element. Luckily, there was a Woolworths directly across the road on Queen St.
We always kept the box and guarantee for our elements, so whenever one died you'd just pop it in the box and bowl over to Woolies where they'd exchange it for a new one. No questions asked.
Because he was into typography, Colin delighted in pointing out that the third O in Woolworths had been hung sideways. Nobody else would have noticed that. The last I heard he'd planted several acres of olive groves on a small island in the gulf. Hopefully that venture paid off grandly for the lad.
With the Len Lye Foundation also being run out of the premises, it was a magical and inspiring place to work.
