Watching the Government defend the indefensible is often more comedy than drama. Revenue Minister Michael Woodhouse tells Newshub that New Zealand has ‘a sound tax system on par with the rest of the world’; Health Minister Jonathan Coleman tastes woeful hospital fare at Dunedin hospital after a blizzard of complaints about its quality but only after barring media…. So for all we know, the good doctor might well have dined on caviar.
This dish of a story crashed and smashed when Dunedin food writer Charmian Smith sampled the reheated frozen meals and concluded:
“I hope I don’t ever have to rely on that sort of food when I get really old.”
But back to the Panama Papers, the massive leak which revealed how the rich and powerful stash their money offshore in tax havens like – well, a little bit like Godzone really.
“It is ridiculous to suggest that New Zealand is a tax haven, as tax havens thrive on secrecy” Woodhouse told Newshub. And the response to that is, well? Isn’t this the same Government which insisted on secrecy over the TPPA for years?
If you check out Google to see who’s saying NZ is a tax haven, the numbers tell the story – they quite simply overwhelm the Government’s quaint protestations.
As far back as 2012, Stuff revealed how foreign trusts worked, so the Panama Papers which put New Zealand in this Tax haven scandal should hardly be news to the Government. Stuff wrote at the time:
There are several key features of a foreign trust, one of them being that it pays no tax on overseas income. On its own that’s a useful attribute, but when combined with another it becomes turbocharged, because foreign trusts don’t have to tell anyone what they own, how much money they make, or who benefits from anything they pay out.
However, it may already be apparent that if, say, you had a lot of money and if, say, you wanted to hide it from certain tax authorities, a New Zealand foreign trust could be just the ticket.
Local tax consultants are naturally alive to the opportunities and actively market foreign trusts to the wealthy global elite.
A sample of offerings yields the following phrases:
“New Zealand is not seen as a ‘tax haven’ country so the use of a New Zealand [foreign] trust is generally not perceived as a means to avoid tax.” http://www.stuff.co.nz/business/opinion-
But the Government stuck to its muzzle loaders to hold the party line – if only for a moment. Then this week the PM shambled through an RNZ interview, refusing to disclose his tax file (as UK Prime Minister David Cameron has done), but announcing there would be a review into foreign trusts here.
Now we have the Panama Papers, all we need is a banana for the banana republic we’ve become…