The Dim-Post

May 9, 2016

Certain circumstances

Filed under: Uncategorized — danylmc @ 6:22 am

RNZ has an overview of the NZ based Panama Papers documents here. The gist is that Mossack Fonseca has a New Zealand office run by a former IRD staffer called Roger Thompson, and markets itself mainly to wealthy Central and South Americans. This made me smile.

Roger Thompson rebutted any notion that the trusts and companies his company set up were used to dodge taxes, and said claims they were had been exaggerated.

“I don’t see NZ is a tax haven. I would describe it as a high quality jurisdiction for trusts with a benign tax system in certain circumstances.

Revenue Minister Michael Woodhouse is using much the same line, his quote on the RNZ audio went something like, ‘New Zealand is definitely not an offshore tax haven because we demand disclosure and charge tax on trusts, except for foreign trusts which are none of our business.’

No explanation yet of why Key was singled out by ‘John Doe’, or if any New Zealanders avoiding tax are implicated in the overall document release. Although, obviously, if they were it probably wouldn’t be via New Zealand.

75 Comments »

  1. And the tax rate is zero. But still a tax rate is applied. Benign! Perfect.

    Comment by Stephanie — May 9, 2016 @ 8:33 am

  2. John Jey wasn’t singled out, Obama amongst others were mentioned.

    But yes, Doe gave no explanation of why Key was mentioned.

    Comment by NeilM — May 9, 2016 @ 8:52 am

  3. Between the lines, Guyon Espiner sounded quite irritated, this morning, that the Prime Minister had pulled out of his regular Monday interview on Morning Report, due to the Panama Papers’ topic… despite going ahead with Breakfast TV interviews with both TVNZ and TV3 on the same topic. (The statement is at the start of the linked segment.)

    Did anyone bother to watch either channel, and was he questioned very deeply?

    Comment by izogi — May 9, 2016 @ 9:38 am

  4. Izogi: “Did anyone bother to watch either channel, and was he questioned very deeply?”

    The only conclusion we the listeners can reach is that he pulled out because he expected to be subjected to searching questions (or what he thinks of as searching questions) on “Morning Report”, while the same would not be true on TV. That certainly seems to be what has prevailed to date, with all the other dodgy issues which have come up during his time in office.

    Comment by D'Esterre — May 9, 2016 @ 10:04 am

  5. Does claiming as Hager does that NZ is a tax haven just like the Cayman Is serve much purpose?

    Have govts over the past few decades deliberately set out to structure our economy and tax laws to facilitate tax avoidance?

    Maybe I’m just being picky but I think some sort of care with words might be useful.

    Framing whatever problems there in are in our trust laws interms of being the same as the Cayman Is might not proved a good starting point for making changes.

    Comment by NeilM — May 9, 2016 @ 10:15 am

  6. Well, it at least seems poorly founded to claim it’s due to something like higher audience figures… unless the point is that he’d rather be speaking to fewer people, or specifically to people of a particular demographic who watch Breakfast TV.

    That’s if these Breakfast TV ratings (cumulative audiences for TV1: ~125,000, TV3: ~60,000) can be compared cleanly with RNZ’s claims that Morning Report gets a cumulative audience of 365,000 listeners. Someone with a clearer understanding of how to compare ratings would really need to comment, though.

    This has been an ongoing issue between Radio New Zealand and the Prime Minister over several years though, right? It’s as if the topics suddenly became uncomfortable again.

    Comment by izogi — May 9, 2016 @ 10:15 am

  7. Framing whatever problems there in are in our trust laws interms of being the same as the Cayman Is might not proved a good starting point for making changes.

    Why not? We have overseas individuals/companies seeking to use our legal/financial system for the same purposes as the Cayman Is systems are used. How do we feel about that, as a nation?

    If we feel badly about it, then we may require different/lesser changes to deter such behaviour than the Cayman Is would … but it doesn’t change the essential point of comparison.

    Comment by Andrew Geddis — May 9, 2016 @ 10:51 am

  8. then we may require different/lesser changes to deter such behaviour than the Cayman Is

    Any changes in NZ would be different which makes the Cayman Is comparison a little irreverent.

    It’s worth I think making a distinction between countries that have actively set themselves up as tax havens and countries whose laws have some loopholes.

    Already there’s quite a lot of misinformation going around about LTCs. Some sort of accuracy of language I think would be beneficial.

    Comment by NeilM — May 9, 2016 @ 10:59 am

  9. Any changes in NZ would be different which makes the Cayman Is comparison a little irreverent.

    But the relevant point of comparison is what are overseas interests using our legal/financial processes for? Given that this is what we are interested in (and not, at this point, the precise mechanisms that they use to do so), how are NZ and the Cayman Is “different”?

    It’s worth I think making a distinction between countries that have actively set themselves up as tax havens and countries whose laws have some loopholes.

    Why? How is that a useful distinction, given the nature of present discussions?

    Comment by Andrew Geddis — May 9, 2016 @ 11:23 am

  10. Why? How is that a useful distinction, given the nature of present discussions?

    As far as I can tell the NZ laws being taken advantage of are the Income Tax Act 2007 and the LTC structure.

    The trust and LTC tax provisions were specifically designed to prevent tax avoidance here in NZ. Any changes needed to be made would be different if they were specifically set up to facilitate off shore tax evasion.

    Changes to the 2007 act and to LTCs would need to take into account what they were first intended to do.

    Comment by NeilM — May 9, 2016 @ 11:36 am

  11. What is being taken advantage of is:

    (1) The fact that overseas money put into a NZ trust/LTC doesn’t get taxed here; and,
    (2) It is quite difficult for overseas jurisdictions to know that this money is sitting in a NZ trust (because to find out they have to specifically ask about a specific trust/LTC, and you can’t ask about what you don’t know).

    So, in essence, we are playing the same role/providing the same service as the Cayman Is does. Hence the extent of the comparison – doesn’t matter whether we meant to get into this position or not … fact is, we are in it.

    Then, in terms of “fixing” this “problem” we find ourselves in, we in theory could go after (1) or (2). But it’s pretty certain we won’t go after (1) … I think? So what we need to do is go after (2) – force such trusts/LTC’s to disclose their beneficial owners and then make that information available to overseas jurisdictions as a matter of course (so they can check to see that those folk are complying with their domestic tax demands).

    Comment by Andrew Geddis — May 9, 2016 @ 11:48 am

  12. “I don’t see NZ is a tax haven. I would describe it as a high quality jurisdiction for trusts with a benign tax system in certain circumstances”

    I saw that too and thought my god what a euphemism, what times we live in when people think a line like this can be run in the cold light of day given the backdrop. And yet from Neil M’s perspective as permanent apologist for anything and everything, this is probably a precision statement from an expert, nothing more to see here, other than Labour something, Hager something or other. Language is being used to obfuscate. We need more plain speaking, not more sophistry.

    Comment by Joe-90 — May 9, 2016 @ 11:49 am

  13. ‘New Zealand is definitely not an offshore tax haven because we demand disclosure and charge tax on trusts, except for foreign trusts which are none of our business.’

    Which is pretty funny, given that the whole point of an offshore tax haven is that it’s used by people who are, er, foreigners. You have to wonder why the government’s trying to pretend there isn’t a problem with the fact that we’ve been effectively operating as a tax haven – it doesn’t matter whose legislation had the loopholes in it, shouldn’t the focus be on closing them?

    Comment by Psycho Milt — May 9, 2016 @ 12:40 pm

  14. So what we need to do is go after (2) – force such trusts/LTC’s to disclose…

    I agree with that. It’s an oddity – but a very well intentioned oddity – of our particular trust tax laws.

    Comment by NeilM — May 9, 2016 @ 12:57 pm

  15. @NeilM “It’s an oddity – but a very well intentioned oddity – of our particular trust tax laws.”

    How do you know the intention of the legislators here?

    Comment by RJL — May 9, 2016 @ 1:17 pm

  16. I agree with that. It’s an oddity – but a very well intentioned oddity – of our particular trust tax laws.

    As per RJL, we shouldn’t presume to fathom the delphic reasoning of our legislators.
    As an aside, it would be terribly interesting to know which sections of the relevant acts were crafted by ‘interested parties’ for submission as opposed to the IRD.

    Comment by Gregor W — May 9, 2016 @ 1:53 pm

  17. How do you know the intention of the legislators here?

    I’m not a tax expert but my understanding is that our current trust tax laws were specifically designed to prevent NZers hiding from the IRD.

    Likewise, LTCs replaced LAQCs to try and prevent avoidance.

    Comment by NeilM — May 9, 2016 @ 1:58 pm

  18. @ NeilM,

    Neither of which intentions go to the rules governing foreign trusts. Rather, NZ policy in this area seems to have been “we’ll make sure whatever investment/ownership vehicles exist don’t hurt the NZ revenue base … but we don’t really care how overseas people use them and we’ll do the very least amount we can get away with to satisfy OECD, etc demands for openness around them”.

    Also remember, back in the late 2000’s John Key was explicitly touting the idea of NZ becoming a financial services hub (the “Switzerland of the South Seas”). So when it turns out that NZ law was operating in a way that looks a lot like, well, Switzerland’s, we can perhaps cock an eyebrow and wonder just how much an “oddity” it is.

    Comment by Andrew Geddis — May 9, 2016 @ 2:05 pm

  19. I’m not sure Key was responsible for the 2007 tax act.

    Comment by NeilM — May 9, 2016 @ 2:10 pm

  20. What do the ordinary Caymen Islanders think of their country being a tax haven?

    Comment by Gareth Wilson — May 9, 2016 @ 2:28 pm

  21. I’m not sure Key was responsible for the 2007 tax act.

    Nope. But certainly responsible for the Government that oversaw how that legislative framework came to be used in practice (as opposed to any intent behind it). And given that only minimal steps were taken to respond to the growth in the foreign trusts industry (mirrored by increased concerns expressed by overseas organisations about how it was operating) – including, don’t forget, the express decision last year to shelve an IRD inquiry into the issue – it’s for him to explain why that was.

    Comment by Andrew Geddis — May 9, 2016 @ 2:40 pm

  22. “Nope. But certainly responsible for the Government that oversaw how that legislative framework came to be used in practice ”
    Eh? Once again, you liberals fail to give the private sector any recognition for its work. It was lawyers and accountants who saw the potential. For the government, it was simply another one of those “unintended consequences”.

    Comment by Clunking Fist — May 9, 2016 @ 3:07 pm

  23. From Danyl’s link: “The trusts set up have anonymous names such as The Eden Trust” I’ve wondered why that is acceptable. I’ve always understood that (for e.g.) companies’ share registrars will only accept full legal names. So for a person or company, you can’t use your twitter handle or registered trademark, and likewise, a trust had to identify the names of trustees (or partners) as joint owners of a parcel of shares. Yet I’ve worked on returns where the IRD seemed to be happy to accept “Fist Family Trust” as the name of the trust, rather than “Ken Whitney, Clunking Fist and Ham Fist” (the trustee’s names).

    Comment by Clunking Fist — May 9, 2016 @ 3:17 pm

  24. comments disabled on “keep it simple”?

    Comment by Clunking Fist — May 9, 2016 @ 3:20 pm

  25. “It’s not a spade, it’s a manual excavation and entrenching tool.”

    Yeah, keep digging mate.

    Comment by James Green — May 9, 2016 @ 3:30 pm

  26. “comments disabled on “keep it simple”?”

    I reckon Danyl’s blog works better with comments disabled. Certainly after about the first 2 to 3 days of comments.

    Comment by izogi — May 9, 2016 @ 3:36 pm

  27. it’s for him to explain why that was.

    True. There were though foreign trusts during the Clark govt using their laws. I find it unlikely Labour and National set out to set up NZ as a secretive tax haven.

    Comment by Neilm — May 9, 2016 @ 3:46 pm

  28. @NeilM: “I’m not sure Key was responsible for the 2007 tax act.”

    No, but he was responsible for “Look Through Companies” which were an addition dating from 2010.

    Which were purportedly introduced to allow investors in the domestic property market to claim some of the same tax write-offs that they did with LAQCs, but not as much — which purportedly would solve the Auckland Property Crisis circa 2009/2010. But also just happened to explicitly allow for trusts to own LTCs. And as Andrew Geddis says, that just happens to provide a mechanism for New Zealand to “act as the Switzerland of the South Pacific”.

    Comment by RJL — May 9, 2016 @ 4:18 pm

  29. @RJL

    A trustee could be a shareholder of an LAQC.

    But I thought the trust and LAQCs were quite seperate vehickes. One didn’t set up a foreign trust to then have shares in an LAQC.

    I thought the advantages of a trust was the assets were overseas.

    I might be wrong.

    Comment by NeilM — May 9, 2016 @ 6:22 pm

  30. Sorry, I ment trusts and LTCs being seperate vehicles.

    Comment by NeilM — May 9, 2016 @ 6:59 pm

  31. Possibly we need to create a metric of moral significance for these mass document leaks.

    NZ mentioned in 60,000 documents. Bad.

    NZ not mentioned in 11 million. Good?

    It’s one of the things that worries me about these events – it’s easy to start giving significance to numbers that hides a few assumptions.

    I mean, how could my opionion be wrong with 60,000 documents?

    Comment by NeilM — May 9, 2016 @ 7:22 pm

  32. NZ mentioned in 60,000 documents about systematic and comprehensive tax dodging. Bad. Some sort of accuracy of language I think would be beneficial so let’s just call it as it is. Bad.

    Comment by McNulty — May 9, 2016 @ 8:34 pm

  33. “I don’t see NZ is a tax haven. I would describe it as a high quality jurisdiction for trusts with a benign tax system in certain circumstances”.

    What a load of ****.

    It’s statements like this that make me want Trump to win. His incompetence will probably the entire global economic system down, including the entire offshore tax system. Yes, we’d all be screwed, but at least smarmy gits like this would feel the pain even more.

    /masochism

    Comment by Seb Rattansen — May 9, 2016 @ 9:34 pm

  34. Clunking Fist: “Once again, you liberals fail to give the private sector any recognition for its work. It was lawyers and accountants who saw the potential.”
    Actually, this is just another way of saying “…the Government that oversaw how that legislative framework came to be used in practice…”
    In other words, the government knew, or ought to have known, how the private sector was using the existing rules. The PM’s reaction to date bespeaks a government that really didn’t see anything wrong with this stuff, and probably still doesn’t, except that it is sensitive about the term “tax haven”, with all its dubious connotations, being splashed across the news every day. The rest of us, who think that this sort of thing is at the very least unethical, and potentially damaging to NZ’s international reputation, are dismissed as naive and too ready to believe Hager’s conspiracy theories.

    Comment by D'Esterre — May 10, 2016 @ 12:56 am

  35. True, E’D: “oversaw” is one of those vague words that implies “managed”, “directed”, “lead”, as used in poorly written CVs. So you use “oversee/oversaw” as “being the bod on duty when the robbers struck”?

    Comment by Clunking Fist — May 10, 2016 @ 7:31 am

  36. So you use “oversee/oversaw” as “being the bod on duty when the robbers struck”?

    If you have been warned “there (probably) are robbers using the country as a bolthole to hide their stuff” and don’t do anything (much) about it, then yeah … oversee/oversaw works just fine.

    Comment by Flashing Light — May 10, 2016 @ 9:13 am

  37. NeilM & clunking fist have written some damn fine satire …………… I love neilMs ‘whoops accidental tax haven’ lines …. He must be a fawlty towers fan …. blame manuael🙂.

    Clunking fist is quite good too…. Its only natural key knows nothing ……….. he’s spent the last 8 years coaching the all blacks and won us two world cups after all.

    For my own bit of satire I’ll refer to a rumor I read here on this blog, years and years ago when john keys vasectomy was a very important topic …………. It the emerged that Jk’s “tremendous man” & “good loyal friend” (rumored to best man at jks wedding), was killed in a wife/partner swapping swingers rendezvous that went very bad in a lethal way.

    Now the rumor I read here at the dimpost was that JK had the vasectomy because he was at a swingers ‘do’ ………….. and one of the females present at the ‘party’ became pregnant …….. it could have been jk or one of 10 other blokes …………. It wasn’t jk according to the rumor …. but after the scare was over he took prime ministerial precautions and future proofed himself against bastard children conceived on the swingers circuit……

    Or so the rumor went

    In a shocking new twist it has emerged that when rockerfeller was killed it was because he did not bring his wife (and had shagged the other guys wife ), the guy felt swindled…..In a final twis it turns out John Key was supposed to be ……”the wife”.

    He got held up and is bloody lucky to be alive ….accidentally setting up tax havens is understandable ….. anyone would be flustered after a vasectomy and then having a brush with death.

    And how do we know it was not Judith collins who accidentally made the tax haven….

    She is a ex tax lawyer with such terrible judgement she can’t tell Kauri logs from stumps ……………. accidentally making a lot of money ….. which was lucky.

    And finally who accidentally brought those Ukrainian carbon credits off criminals for 100 odd million dollars ………….

    So many strange accidents …………to many actually………… I suspect a vast nicky hager conspiracy …… http://www.stuff.co.nz/business/money/8515361/Money-trail-leads-home-to-New-Zealand

    Comment by reason — May 10, 2016 @ 9:27 am

  38. Clunking Fist: “So you use “oversee/oversaw” as “being the bod on duty when the robbers struck”?”

    That would be the most generous interpretation: which, of course, makes the government look like idiots. The more plausible interpretation is that it knew; which still makes it look like idiots, but with a side dose of shaky ethics and a wonky moral compass.

    Comment by D'Esterre — May 10, 2016 @ 10:13 am

  39. @”reason”,

    Stuff like that will make danyl switch off the comments again and then we all lose our fun.

    Comment by Flashing Light — May 10, 2016 @ 10:28 am

  40. @Flashing Light you can instead go and listen to Little calling all accountants and lawyers “grubby” on Morning Report instead. I couldn’t help thinking that RNZ staff have some sweepstake going around how many times they can make him sound like Muldoon.

    Comment by Robert Singers — May 10, 2016 @ 2:14 pm

  41. Robert Singers: ” you can instead go and listen to Little calling all accountants and lawyers “grubby” on Morning Report instead.”

    No he didn’t: I heard that interview.

    Comment by D'Esterre — May 10, 2016 @ 2:22 pm

  42. That’s true, he back-pedalled quickly, he may even have remembered he’s a lawyer🙂

    Comment by Robert Singers — May 10, 2016 @ 2:27 pm

  43. I don’t think my views are too dissimilar to thise expressed here:

    http://thespinoff.co.nz/10-05-2016/foreign-trusts-101-a-plain-english-introduction-amid-the-panama-paper-haze/

    So far we’ve had a deceased fraudster and an Elvis impersonator. We were promised by Hager and co the goods on Key and the Cook Is.

    Can’t help thinking someone oversold this.

    Comment by NeilM — May 10, 2016 @ 3:02 pm

  44. @NeilM by someone do you mean someone who rails against illegally obtained data?

    Comment by Robert Singers — May 10, 2016 @ 3:07 pm

  45. So one of those 60,000 links to NZ turns out to be a Green Party doner.

    And a great many of the other links are completely innocuous as well.

    I think it’s fair to ask just how does one determine the significance of these sorts of document numbers in these massive leaks.

    There’s been a lot of OMG 60,000 we’re the Cayman Is. A lot of innuendo.

    Comment by NeilM — May 10, 2016 @ 5:05 pm

  46. Now Greenpeace and a green party donor have been named in the leak. Thats a tad awkward I would have thought?

    Outside of a minority or people most kiwis don’t really give a shit about Nicky Hagar , he’s no more credible than Ian Wishart yet he’s viewed by some obsessives as a god. Once again his accusations are looking like they are a lot of noise but no substance, maybe its time the left wised up and ignored him?

    Comment by Cliff Clavin — May 10, 2016 @ 6:37 pm

  47. @NeilM,

    We were promised by Hager and co the goods on Key and the Cook Is.

    For someone who started out saying “I think some sort of care with words might be useful” you have a bad habit of making shit up.

    Comment by Flashing Light — May 10, 2016 @ 7:09 pm

  48. @Cliff Clavin,

    Outside of a minority or people most kiwis don’t really give a shit about Nicky Hagar , he’s no more credible than Ian Wishart yet he’s viewed by some obsessives as a god.

    I didn’t realise that Ian Wishart is a member of the International Consortium of Investigative Journalists. You’d better let them know they’ve left his name off the list: https://www.icij.org/journalists/w

    Comment by Flashing Light — May 10, 2016 @ 7:12 pm

  49. As I predicted when all this started …

    https://dimpost.wordpress.com/2016/04/12/panama-papers-thoughts/

    … the Hager diversion is now in full swing. Such a shame for the smoke-throwers that the Panama papers are actually being explored by the world’s media. If Hager fell under a bus nothing would be any different. You’ll need a better line of denial.

    Comment by sammy 3.0 — May 10, 2016 @ 7:17 pm

  50. you have a bad habit of making shit up

    Oh, I see. My mistake. The allegation that Key was engaged in nefarious activities in the Cook Is wasn’t intended to be backed up by any facts.

    But like the Chinese sounding names thing.

    Comment by NeilM — May 10, 2016 @ 7:19 pm

  51. Slaters the real journalist …….

    He’s got an expose that climate change fraud ………. and ukaranian carbon credits are 100% legit.

    and Johns john (shewan ) did not try and pull of a 2.2 billion dollar underpayment in tax on behalf of the profit gorging Aussie banks ……….. which was ruled illegal by High court Justice Wilde from memory.

    Nicky hagers book dirty politics https://en.wikipedia.org/wiki/Dirty_Politics is being read by new people all the time.

    Most New Zealanders are offended by what it details.

    And our tax haven status has been a long time coming …… http://www.stuff.co.nz/business/money/8515361/Money-trail-leads-home-to-New-Zealand

    I wonder if Winston would take Keys head as a price for coalition ……

    and stick it in a wine box🙂

    Comment by reason — May 10, 2016 @ 7:50 pm

  52. The allegation that Key was engaged in nefarious activities in the Cook Is wasn’t intended to be backed up by any facts.

    Provide a link to where “Hager and co” made an “allegation that Key was engaged in nefarious activities in the Cook Is”. Seeing as you are all into “facts”, that is.

    Comment by Flashing Light — May 10, 2016 @ 8:23 pm

  53. “Now Greenpeace and a green party donor have been named in the leak.”

    I’ve no idea about the Green Party donor. On the Greenpeace thing, the GP statement is that the claim is based on information that was discredited some time ago, supposedly due to certain investors naming random charities as beneficiaries in order to deflect scrutiny from authorities.

    Comment by izogi — May 10, 2016 @ 8:46 pm

  54. Oops. And here’s the link I’d meant to include.

    Comment by izogi — May 10, 2016 @ 8:47 pm

  55. Robert Singers: “That’s true, he back-pedalled quickly…”

    No. He didn’t backpedal, because he didn’t in the first place say what you claim he said. His comment was rebroadcast this afternoon.

    Comment by D'Esterre — May 10, 2016 @ 10:16 pm

  56. “I didn’t realise that Ian Wishart is a member of the International Consortium of Investigative Journalists. You’d better let them know they’ve left his name off the list: https://www.icij.org/journalists/w

    I didn’t realise being a member of that meant you couldn’t have a history of twisting facts to suit your narrative and a fanbase of people who are desperate to believe your fantasies.

    Comment by Cliff Clavin — May 10, 2016 @ 10:19 pm

  57. NeilM: “The allegation that Key was engaged in nefarious activities in the Cook Is wasn’t intended to be backed up by any facts.’

    Where the hell did that allegation come from? First I’ve heard of it. And who was the allegator? To quote the PM’s deahless prose…

    Comment by D'Esterre — May 10, 2016 @ 10:20 pm

  58. NeilM: ” Possibly we need to create a metric of moral significance for these mass document leaks.”

    Judging by your other comments on this thread, I think the term you’re searching for there is “moral relativism”.

    The line you’re taking on this thread is that of apologetic. And it’s not clear why you would do this. What are you scared of?

    The Panama papers reveal behaviour on the part of the world’s wealthy that is at the very least ethically questionable. Without doubt, the proceeds of crime and corruption, as well as tax-dodging, lurk in the depths.

    The argument that some people need to protect their wealth from corrupt political regimes in their home countries is a bit threadbare. And wildly implausible when said wealthy are from the US, the UK and Australia.

    New Zealanders may or may not be involved, but that fact isn’t a measure of moral significance. It isn’t all about us, you know.

    Comment by D'Esterre — May 11, 2016 @ 12:58 am

  59. @D’Esterre

    The allegation was made by John Doe in his manifesto and the fact that Key was “singled out” has been made much of and Danyl refers to this in his post:

    No explanation yet of why Key was singled out by ‘John Doe

    With a media under stress financially and mostl likely an increasing number of people wanting to become the next Snowden I think it would pay to have a closer look at how things like the number of documents can be made to imply something more than they should.

    Comment by NeilM — May 11, 2016 @ 6:51 am

  60. @Cliff Claven

    I didn’t realise being a member of that meant you couldn’t have a history of twisting facts to suit your narrative and a fanbase of people who are desperate to believe your fantasies.

    Or … is the problem that you don’t like the particular “narratives” that Hager uncovers and so, in time honoured fashion, want to shoot the messenger? Because the problem with your take is twofold:

    (1) Hager is exceptionally well regarded for his work amongst a lot of very good journalist figures around the world – I don’t, for instance, see folks like Seymour Hersh lining up to ladle praise on Ian Wishart for his efforts.

    (2) For all he gets accused of “twisting facts”, etc, his critics (like yourself) are pretty quiet about what he actually gets wrong.

    Comment by Andrew Geddis — May 11, 2016 @ 6:52 am

  61. @NeilM,

    The allegation was made by John Doe in his manifesto …

    So, just to clarify:

    (1) “Hager & Co” didn’t make the “allegation” that you are claiming, but the leaker did? Isn’t that a rather important “fact” around which some “care with words might be useful”? So, given your previous high horse, will an apology be forthcoming?

    (2) And when we look at that allegation, where did John Doe say that “Key was engaged in nefarious activities in the Cook Is”? What he/she said was that “‘Prime Minister John Key of New Zealand has been curiously quiet about his country’s role in enabling the financial fraud Mecca that is the Cook Islands”. Wouldn’t you think that some “care with words might be useful” in this situation?

    Comment by Andrew Geddis — May 11, 2016 @ 7:00 am

  62. Prime Minister John Key of New Zealand has been curiously quiet about his country’s role in enabling the financial fraud Mecca that is the Cook Islands.

    You don’t think that implies and is meant to imply anything untoward? If not why the big fuss about Key being singled out.

    Hager and co: he’s a part of the team that’s supposedly finding us the facts. Has he no obligation to provide facts?

    Comment by NeilM — May 11, 2016 @ 7:18 am

  63. @NeilM,

    Sorry – I don’t regard you as arguing in good faith here, so I’m not engaging any more.

    Comment by Andrew Geddis — May 11, 2016 @ 7:20 am

  64. I think it’s incumbent on those I using the Panama papers to be cautious about what they actually are evidence of. That goes for Hager as well as Key.

    Comment by NeilM — May 11, 2016 @ 7:49 am

  65. @NeilM

    Speaking as one who is well right of centre by the standards of these parts,

    I appreciate what you are saying, but I think it’s a losing battle. You just end up looking dodgy and coming across as defending the indefensible.

    I think we of the right should accept that the foreign trusts situation is not ideal.
    – It _may_ permit shenanigans such as money laundering or tax evasion. That is not yet clear.
    – Regardless of the substance, it certainly does look dodgy. That is probably actually worse, to the extent that it brings NZ into disrepute.

    Further we should accept that the National Government had a hand in setting up the current situation, and has failed to fix it when it had the chance, and has been slow to admit that there is a genuine problem here.

    I don’t yet know what is the road to fixing any problems in the foreign trusts regime and restoring confidence, but whatever it is, denial ain’t gonna help.

    A.

    Comment by Antoine — May 11, 2016 @ 11:01 am

  66. @Antoine

    I didn’t mean to imply I didn’t think there was need for changes to our tax laws.

    What struck me was how the extravagant claims used to promote the story have not been substantiated.

    Given the media is under considerable financial pressure and these mass dumps appear as answers to their prayers and most likely will continue, then it strikes me as worth looking at how it works our.

    But that’s just my interests, not expecting others to have the same preoccupations.

    I still identify as centre left, what’s happened to Labour and the Left in general just doesn’t inspire me to any great loyalty in that direction.

    Comment by NeilM — May 11, 2016 @ 12:27 pm

  67. > What struck me was how the extravagant claims used to promote the story have not been substantiated.

    Well, if there turns out to be no mischief at the bottom of all this, you’ll be able to say ‘I told you so’🙂

    A.

    Comment by Antoine — May 11, 2016 @ 12:36 pm

  68. NeilM: “The allegation was made by John Doe in his manifesto and the fact that Key was “singled out” has been made much of….”

    John Doe did not allege that the PM was engaged in “nefarious activities in the Cooks”, as you claimed above. You’ve put words in JD’s mouth. Here’s what he actually said:
    “Prime Minister John Key of New Zealand has been curiously quiet about his country’s role in enabling the financial fraud Mecca that is the Cook Islands.”

    Note that this has zip to do with the PM’s personal financial affairs. Note also that the PM’s first reaction to this – as reported on RNZ – was to say that he hadn’t mentioned the Cooks because nobody had asked him (Helen Clark’s infamous defence to some controversy or other on her watch). Only later – presumably after his offficials or party apparatchiks had had time to get his story straight – did he say that the Cooks’ legal and tax structure wasn’t in his or NZ’s purview.

    It’s difficult to see your dogged adherence to this narrative of yours as anything other than apologetic. Best to take Antoine’s advice above.

    Comment by D'Esterre — May 11, 2016 @ 2:47 pm

  69. LOL, do the commenters here really believe Key set up LTCs? Surely those trustworthy hardworking civil servants so beloved of the left (well, of unionists, anyway) are the technocrats responsible? And recently, when it became clear that the dirty foreigners were doing something unexpected, they put a review in their workstream. Surely the nasty bit is: why did it come off their workplan?

    Comment by Clunking Fist — May 14, 2016 @ 10:29 am

  70. Clunking Fist: ” do the commenters here really believe Key set up LTCs? Surely those trustworthy hardworking civil servants so beloved of the left (well, of unionists, anyway) are the technocrats responsible?”

    Er…have you not been paying attention to the news reports? The legislation for LTCs was passed in Parliament in 2010; the government’s intention to introduce them as a replacement for LAQCs had been foreshadowed in that year’s budget. Those of us who must prepare tax returns remember that LTCs turned up on our forms in 2011, or 2012 at the latest. Well of course the technocrats drafted the legislation and the LTC structure: the PM couldn’t do any of that.

    ” And recently, when it became clear that the dirty foreigners were doing something unexpected, they put a review in their workstream. Surely the nasty bit is: why did it come off their workplan?”

    Well now, you could ask Todd McClay and Ken Whitney about that, couldn’t you!

    Comment by D'Esterre — May 14, 2016 @ 11:44 pm

  71. More specifically, the government introduced LTCs as part of the Taxation (GST and Remedial Matters) Bill 2010. The actual concept of Look-Through Companies didn’t even exist in that Bill, though, until SOP 187 was introduced two days before the third reading.

    Labour in particular was not impressed (Hansard link) with a 77 page SOP being injected into a 57 page Bill, two days before its final reading. It had plenty to say about how major the change was of introducing Look-Through Companies.

    In short, there were probably valid reasons for introducing LTCs, and strictly speaking it was Peter Dunne who officially handled the Bill, but their introduction was part of the obsession National had with passing anything and everything under Urgency in its earlier days, avoiding proper processes and scrutiny, for which it received plenty of criticism at the time even including from DPF. There’s no guarantee that the current problems would have been detected with a longer time to analyse the LTC legislation, but it there would have been a better chance than in 2 days. At least is significant is probably the allegation that the Minister of Revenue ignored IRD’s warnings when it indicate there was a problem.

    Comment by izogi — May 15, 2016 @ 7:58 am

  72. @izogi

    There were indeed very good reasons for axing LAQCs and replacing them with LTCs – namely reducing the attraction of property investment. Key has been chipping away at that attraction for awhile – see depriciation.

    Maybe they moved too hastily but tax laws are complex and for every measure the govt introduces they’ll be bright well paid lawyers looking to take advantage.

    But there’s not a lot of evidence that LTCs were taken advantage of.

    Comment by NeilM — May 15, 2016 @ 7:37 pm

  73. “LOL, do the commenters here really believe Key set up LTCs? Surely those trustworthy hardworking civil servants so beloved of the left (well, of unionists, anyway) are the technocrats responsible?”

    Well, every law has civil service input. It’s hardly exceptional. Given that civil servants work at the instruction of ministers, it seems to me the ministers are still responsible for the laws that result. Otherwise, what -are- politicians responsible for?

    Comment by Ortvin Sarapuu — May 16, 2016 @ 7:10 am

  74. It was the 2010 Victoria Unversity Tax Working Group that raised the problem of LAQCs in the context of residential property investment.

    The govt then asked for a solution and was provided with the LTC by officials.

    It did turn out that the LTC rules were overly complex and there was a review.

    That’s hard I think to see as govt sets up LTC for overseas tax avoiders.

    Comment by NeilM — May 16, 2016 @ 8:45 am

  75. NeilM: “That’s hard I think to see as govt sets up LTC for overseas tax avoiders.”

    I’ve not seen anybody assert that the government set up the rules especially to benefit overseas tax avoiders. But if that has been a consequence of the way the regime was designed, then it’s incumbent on the government to tweak the rules such that attempts at tax avoidance on the part of overseas entities and individuals are white-anted.

    Comment by D'Esterre — May 16, 2016 @ 10:39 pm


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