Hard News by Russell Brown

Read Post

Hard News: Media Take: The Panama Papers

84 Responses

First ←Older Page 1 2 3 4 Newer→ Last

  • Marc C,

    Multi layered investments are the business of the Panamanian and other experts, this involves shell companies, trusts, holdings and so forth, it is extremely difficult to keep track, so some investments will not be identifiable against individuals, they will be held by whatever legal entity and investment vehicle, and John Key may be able to quite honestly say, he has NO foreign trust investment, but who knows, an entity he may have legally founded and listed years ago may well do so.

    That is not Mr Key's investment then, he is an insider and expert, Kiwis are idiots to believe his naive play and antics, he grew up in this business environment, he knows all about it, and is NOT innocent, he will have some stuff that is not yet disclosed, that will harm him.

    Auckland • Since Oct 2012 • 437 posts Report Reply

  • simon g,

    I think this whole story illustrates the core problem for the opposition - the difference between what they should do, and what they too often do. Call it the Smart Social Democrats versus Silly Labour.

    The Panama Papers should be all about the fundamental principles involved, not the Prime Minister. The Smart Social Democrat line is "Look at inherently unjust financial arrangements, let's clean them up." The wider public has no love for tax-dodgers, and will be receptive to the argument that fat cats should not be fed, but captured. The media coverage has been critical of the government's response, and not just in the usual circles. In short, "tax haven" is a phrase that hurts, and works.

    But if it's made personal (by Silly Labour), and the issue is presented instead as "What have we got on Key?", then they'll probably lose. The public don't like that, especially when nothing is found (and odds are it won't be). Let's hope the opposition and media keep focused on the real issue - the one that resonates with voters.

    Auckland • Since Nov 2006 • 1333 posts Report Reply

  • Ross Mason,

    So this money comes into the country. Sits in a trust. No income is made in NZ therefore no tax is paid. So....other than somewhere to put the money away from home....but pardon my ignorance, remind me where the fudge is the benefit to NZ? Oh...wait a minute....are we subsidising lawyers and money-go-rounders again?

    Or are we just somewhere "safe" to move the money from here to another bolt hole, do some wheeling dealing, send it back to NZ and voila! Next time I bring it all back home...I haven't made any money in NZ, I haven't made any money back home... and I spend the excess and start again. Shit...why didn't I think of that?

    Upper Hutt • Since Jun 2007 • 1590 posts Report Reply

  • Rob Stowell,

    Call it the Smart Social Democrats versus Silly Labour.

    Mirroring my thoughts exactly. This hits a nerve and it should be in the news for months. It's a natural for social democrats. But it's not about NZ's reputation or JK (if he's damaged thats jus a bonus).
    It's the bleeping basic principle! Those with more should contribute more.

    Whakaraupo • Since Nov 2006 • 2120 posts Report Reply

  • Russell Brown, in reply to Ross Mason,

    So this money comes into the country. Sits in a trust. No income is made in NZ therefore no tax is paid. So….other than somewhere to put the money away from home….but pardon my ignorance, remind me where the fudge is the benefit to NZ? Oh…wait a minute….are we subsidising lawyers and money-go-rounders again?

    About $20m income annually is made here from fees. So for all the reputational damage, we get $8m tops in tax revenue.

    Auckland • Since Nov 2006 • 22850 posts Report Reply

  • Deborah,

    So this money comes into the country. Sits in a trust. No income is made in NZ therefore no tax is paid.

    Actually, the money doesn't even need to come into the country. It can all be held overseas, and the only connection here is the NZ trustee.

    New Lynn • Since Nov 2006 • 1447 posts Report Reply

  • Brent Jackson, in reply to Russell Brown,

    But the people running these schemes are experts at avoiding tax, so it is quite possible that almost no tax is paid on this $20m income.

    Auckland • Since Nov 2006 • 620 posts Report Reply

  • Paul Campbell,

    Attachment

    Today's Tremain

    Dunedin • Since Nov 2006 • 2623 posts Report Reply

  • Paul Campbell,

    As I understand ity there are essentially three ways you can tax a trust, essentially you can tax the people who put money in, or you can tax the people who take it out, or you tax the trust's income itself directly

    Part of why we are a tax haven is that we don't tax the person who puts the money in, nor do we tax any non-resident's beneficiary income the trust has that occurs outside NZ.

    Other countries tax trusts and the people who access them differently, by moving your money around carefully you can avoid paying tax anywhere. If we taxed our trusts the same way other western countries do this sort of wriggle room would not be available to those who can afford it

    Dunedin • Since Nov 2006 • 2623 posts Report Reply

  • Ian Dalziel, in reply to Paul Campbell,

    Today’s Tremain

    Vigilent?
    ptui!
    He needs a proofreader,
    (as does Al Nisbet in The Press occasionally).

    Christchurch • Since Dec 2006 • 7953 posts Report Reply

  • Alfie,

    In 2014 the OIO approved the purchase of some sensitive New Zealand land which was funded via one of Mossack Fonseca’s operations. The government is able to overturn such arrangements under the “good character” requirements of OIO applications.

    While the OIO is checking to see how many other applications were linked to Mossack Fonseca, keep in mind that they’re only the world’s fourth largest tax evasion company and the scale of the problem is likely to be bigger. Much bigger.

    Quoting figures for the last four years, Grant Robertson accused the government of complacency.

    He said foreign investment from the Cayman Islands and the British Virgin Islands together, both known as tax havens, was more than $4 billion. That was almost seven times more than China, Germany, and France combined.

    John Key “did not know which country the bid came from” and Bill English says he’s “not particularly concerned” about the Cayman Island numbers.

    Of course he’s not. Dodgy John the money trader hasn’t given up his dream of making New Zealand the Jersey of the South Pacific. Key and English cannot be unaware of the scale of NZ’s involvement in international tax evasion and/or money laundering… after all, they’ve been encouraging it for years.

    It’s not surprising then that they’d rather the public be kept in the dark over such matters.

    The National Party – providing support services to international criminals. But only the wealthiest ones.

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Ian Dalziel, in reply to Alfie,

    the OIO

    Press release from CAFCA (today 15/04/16)

    CAFCA forces Overseas Investment Office to lift cloak of secrecy on its approvals
    The Campaign Against Foreign Control of Aotearoa (CAFCA) has had a relationship with the Overseas Investment Office (and the Overseas Investment Commission before that) dating back to the 1980s, when we waged a five year long campaign just to get any access to its data at all.
    With almost no exceptions the OIO always withholds some Decisions from its monthly batch (in some cases it is the whole Decision; in the great majority it is just the “consideration” i.e. how much was paid). CAFCA routinely appeals all such deletions to the OIO; once again, with very few exceptions, it upholds the deletions. We then appeal those to the Ombudsman, usually three months worth at a time. Those had been piling up and we had received no verdicts from the Ombudsman on any of our appeals for several years. In 2015 the Office of the Ombudsman decided that it wanted to meet with CAFCA (which had put in 100 appeals) and which was tying up its valuable time and resources.
    We duly met with Ombudsman Professor Ron Paterson in Christchurch, a year ago. He agreed to urge the OIO to release the “considerations” of a large backlog of deleted Decisions which we had appealed. The OIO has subsequently released to us a great wodge of previously withheld Decisions, complete with the considerations, spanning the period 2012-14 inclusive.
    To be precise, the OIO has released to us 88 Decisions which had previously had material withheld; it has decided to withhold four Decisions indefinitely, and will review another 16 after a specified period of time (it has told us when that will happen, in every case).
    More significantly, the OIO has now decided to institute a whole new regime relating to the cloak of secrecy thrown over foreign investment applications to it (the new regime actually started as from May 2015 but we have only just been informed of it by Professor Paterson).
    To quote his letter to us: “If the OIO determines that there are good grounds under the Official Information Act for withholding the information, the applicant is advised that the information will be withheld for a period of one year or until such time as the information becomes public (whichever is earlier). If the applicant considers that the information should remain confidential beyond the specified expiry date, the onus is on the applicant to write to the OIO explaining why that is the case. The OIO will then reconsider the grounds for withholding”.
    “With these actions, the OIO has effectively changed its starting position with respect to information that is deemed confidential when a Decision summary is released – that is, confidentiality is maintained for a specified period rather than indefinitely. The onus is on applicants to contact the OIO if they consider that there are good grounds under the Official Information Act to withhold the information after the expiry of the specified period”.
    This is a definite improvement on the OIO’s position up until now (i.e. throwing an indefinite cloak of secrecy over all or part of its monthly Decisions).
    CAFCA thanks Professor Paterson for his work on this. And we pat ourselves on the back for continuing to hold to account this very publicity-shy, rubber stamping part of the State’s foreign investment “oversight” regime.
    CAFCA is fundamentally opposed to the whole “come on in and help yourselves” message to foreign investors from Governments led by both major parties.
    That being the case, the Overseas Investment Office has not seen the last of us just yet. We will continue to appeal most Decisions that are fully or partly withheld.
    But, at least, its rubber stamping won’t be hidden behind closed doors quite so often.
    Murray Horton
    Secretary/Organiser

    for further detail on foreign control in NZ go to:
    http://canterbury.cyberplace.co.nz/community/CAFCA/key-facts.html

    Christchurch • Since Dec 2006 • 7953 posts Report Reply

  • Alfie,

    The Standard has broken an interesting angle on Key’s involvement with offshore trusts. Key claimed that “his private lawyer” Ken Whitney took his investments with him when he moved to the Antipodes Trust Group, a business which facilitates tax avoidance.

    Key said Whitney was “highly ethical” and that was why he chose him as his lawyer.

    However there’s a problem with that statement. Key’s “lawyer” is not actually a lawyer after all. When the Standard contacted Whitney to ask him if he was Key’s lawyer, he said: “Yes.” He later amended that comment to confirm he was no longer registered to practice law.

    Whitney letting his registration lapse is not a simple matter of oversight. He surrendered his law practicing registration when he set up Antipodes, which clearly was done with the intention of cashing in on New Zealand’s tax haven status, that John Key has been instrumental in maintaining.

    Whitney openly told TS he specialises in setting up trusts for foreigners.

    So the PM’s “blind” Aldgate Trust may actually turn out to be a wilfully blind trust, being administered by a non-lawyer who specialises in offshore tax evasion.

    On its website, Antipodes describes itself as “a specialist provider of trustee services for foreign trusts using New Zealand as their jurisdiction of choice.” Such trusts offer “a well-established vehicle for carefully managing the inter-generational transfer of wealth”.

    It points to the tax-free benefits, as well as the lack of inheritance taxes and laws that protect client confidentiality and “limited” reporting requirements which mean the identities of settler and beneficiaries do not need to be disclosed.

    This is not a good look for a PM who, since the Panama Papers broke, has been carefully choosing his words while denying any tax sheltering. Hopefully the MSM will see through the spin, pick up this story and shine some light on Key’s offshore tax adventures.

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Alfie,

    When the IRD began to look into foreign trusts in 2013, John Key's lawyer lobbied the Revenue Minister at the time, Todd McClay, invoking the PM's support and effectively killing the investigation.

    "We are concerned that there appears to be a sudden change of view by the IRD in respect of their previous support for the industry. I have spoken to the Prime Minister about this and he advised that the Government has no plans to change the status of the foreign trust regime," Mr Whitney wrote in an email.

    "The PM asked me to contact you to arrange a meeting at your convenience with a small group of industry leaders who are keen to engage to explain how the regime works and the benefits to NZ of an industry which has been painstakingly built up over the last 25 years or so."

    The industry which tends to shun sunlight was worried that any review of foreign trust rules could "severely damage" their income.

    The day after Mr Whitney's email to Mr McClay, the minister's office contacted Inland Revenue to say the minister had "expressed some concern that one of the options that will be presented in the report to him before the end of the year would be a removal of the foreign trust regime".

    Inland Revenue senior official Carmel Peters responded saying they would "bear this in mind in how we write the report".

    Then in May last year Inland Revenue confirmed to staff that there would be no review of foreign trusts due to "wider government priorities". Think about that. The possibility of collecting hundreds of millions of dollars in tax from wealthy offshore "investors" was no longer a goverment priority.

    Naturally, while talking to reporters after a pre-budget speech, Key was his usual illusive self and failed to mention that the person who had approached him was none other than his own long-time lawyer, offshore tax (haven) specialist, Ken Whitney.

    One of the members of the tax, that group, the foreign trusts, asked me about it. I said I haven't got a clue what you're talking about, I don't think that's right that there are changes, but go and take it up with the minister.

    That's right. Tax havens... money laundering... it was apparently all too complicated for former currency-trader Key's little brain to take onboard. Nothing to see here folks, moving right along. Let's go bash some beneficiaries instead.

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Joe Wylie, in reply to Alfie,

    Nothing to see here folks, moving right along. Let's go bash some beneficiaries instead.

    Here's Transparency International NZ Chair Suzanne Snively's open letter to John Key after the 2014 election. High-minded and positive stuff, though perhaps somewhat tainted by Snively having been outed only four months earlier for apparently exploiting her position for her personal benefit.

    Transparency International NZ's media release from April 6 is pretty much an admission that the lofty principles promoted in their post-election open letter have been treated as window dressing by the Government. From touting for the role of John Key's Jiminy Cricket consciense in the golden years ahead, Snively seems to have moved on to hand-wringing over having been ignored.

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Ian Dalziel, in reply to Joe Wylie,

    Don't Troy this at home...

    Snively seems to have moved on to hand-wringing over having been ignored.

    The Cassandra Syndrome?

    Christchurch • Since Dec 2006 • 7953 posts Report Reply

  • Alfie,

    Bomber Bradbury is pissed off at Key’s personal use of offshore trust/s and his protection of the tax avoidance industry.

    Key has built a tax haven, was instrumental in personally intervening in 2010 to create it, had his lawyer lobby the Minister to stop any crackdown and then gets caught out benefiting from the very trusts he’s helped build.

    If you are not incandescent with rage now, you are the problem!

    Gordon Campbell tackles the OIO for approving two wealthy Argentinian “investors” named Grozoksky as being of “good character” when they have an appalling track record of releasing toxic chemicals into rivers. He sums up the situation.

    This is really shabby, banana republic kind of stuff.

    He’s right of course. At this stage we have no idea how many New Zealanders operate offshore trusts, neatly avoiding paying their fair share of NZ tax. But you can guarantee there are hundreds, perhaps thousands in this situation.

    One story that caught my eye this morning concerns a couple of Te Kuiti sheep farmers, Gerald and Jocelyn Chamber. While this is a sad story about a US conman who just happens to be a rabbi, (straight out of Central Casting, no doubt) we learn that the Chambers invested $9m in non-existent Facebook stocks. They’re seeking the return of their capital plus a further $24m in damages. This isn’t small change.

    The Chambers were described in court as "unsophisticated, naive farmers from the outskirts of New Zealand”. While they may well be nothing more than a couple of country hicks, this line stood out for me.

    Their Cayman Islands company Saskatoon Financial is also listed as a plaintiff.

    WTF? Even some self-confessed clueless kiwis are operating offshore tax shelters? I’d like to know just how widespread this practice is, and how much tax New Zealand is losing each year as a result.

    Unfortunately Key and his mates are running the show and I’ll bet that most of them have a vested interest in making this issue go away. And quickly.

    Gordon Campbell’s banana republic comment is right on the mark.

    On Tuesday 10th May the International Consortium of Investigative Journalists (ICIJ) will publish a searchable online database of the Mossack Fonseca papers. I imagine quite a few prominent New Zealanders may be embarrassed by the contents.

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Alfie,

    Poor John Key is sadly misunderstood. He's now claiming that his personal lawyer, offshore tax facilitator Ken Whitney, "misrepresented a conversation they had" when he lobbied Todd McClay in 2014.

    Well, sadly people do drop my name in things all the time...people who barely know me and don't often talk to me and often drop my name in things.

    Accusing his personal lawyer of many years of "name-dropping" and "misrepresentation" is merely Key's latest desperate tactic to try and distance himself from the Panama Papers fallout.

    I heard a radio interview recently (sorry, no link) in which Key said he'd checked and could confirm that he had no offshore investments in Panama. Fair enough. After all, Panama is only one of at least 80 international tax havens. I wonder why Key didn't make a more general comment about not having any money in any tax havens, anywhere in the world? The answer must be obvious.

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Joe Wylie, in reply to Alfie,

    Accusing his personal lawyer of many years of "name-dropping" and "misrepresentation" is merely Key's latest desperate tactic to try and distance himself from the Panama Papers fallout.

    '"He Who Cannot Be Named" redirects here.'

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Rich of Observationz, in reply to Alfie,

    New Zealand *is* a tax haven – Key doesn’t need to use foreign ones.

    I think I posted this elsewhere, but if the PM's wealth, as reported, is NZD50mln, then if we assume he keeps 80% in tax-free capital items (beach houses in Omaha, vineyards, etc) that that’s all tax free. If he then makes 5% on the remaining $5mln, that’s $250k, the tax on which would be about $80k – way less than his salary, and a cheap price to get to play golf with Obama.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Ian Dalziel, in reply to Alfie,

    oh you are lawful!

    Accusing his personal lawyer of many years of “name-dropping” and “misrepresentation” is merely Key’s latest desperate tactic to try and distance himself from the Panama Papers fallout.

    Bearing in mind that this is the same lawyer he is on the public record as saying has the highest integrity, and that he (Key) only deals with such people – that’s a slippery slope you’re climbing there John Boy…
    Telling the truth means ya don’t have to remember what you said previously…

    Christchurch • Since Dec 2006 • 7953 posts Report Reply

  • Alfie,

    Today's version... Key's highly experienced lawyer's email was 'sloppily written'. Oddly, the meaning of the line in question looks pretty unambiguous to me.

    "I have spoken to the Prime Minister about this and he advised that the Government has no plans to change the status of the foreign trust regime."

    Sloppy? What other meaning, if any, could Whitney have possibly intended? This whole business reeks of slippery John.

    I didn't do it.
    Nobody saw me do it.
    You can't prove a thing.

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Alfie,

    Now Todd McClay has made a complete dick of himself.

    After a circuitous route around the question of whether McClay did or didn't know Whitney was Key's lawyer, the minister eventually offered up that he probably didn't know but couldn't remember for sure. For more than 16 minutes McClay veered between being almost certain he didn't know to being somewhat unsure because it was a long time ago.

    So it was slippery John to the rescue. Even though Key states that he hadn't actually spoken to Whitney, and therefore would know nothing about the subsequent meeting with McClay, the PM suddenly had a supernatural insight into the whole sorry mess.

    It was only half an hour later that Key fronted up to media and categorically and unequivocally confirmed that he was quite explicit in his conversation with McClay that Whitney was his lawyer.

    Planet Key -- a place where memories are made (up).

    Dunedin • Since May 2014 • 1440 posts Report Reply

  • Greville Whittle, in reply to Alfie,

    This whole business reeks of slippery John.

    Does this mean our PM is The Stainless Steel Prat?

    It seems that the PM and his mates are very good and providing solid sounding, fluffy, rehearsed answers to patsy questions. but when they are caught on the hop it's another story.

    Hamiltron • Since Oct 2008 • 50 posts Report Reply

  • izogi, in reply to Greville Whittle,

    It seems that the PM and his mates are very good and providing solid sounding, fluffy, rehearsed answers to patsy questions. but when they are caught on the hop it's another story.

    Thing is, it works. Sadly.

    I'm as annoyed about this as I've been about any number of previous incidents with this government and this PM. But everyone's not me.

    These types of things are significant when people are looking for excuses to vote out a government, but I don't get the feeling that people are looking for an excuse to do that right now. If anything, more people who vote are looking for excuses to keep the government than to remove it, and excuses to keep the government are exactly what they're being provided with by the PM and apologists.

    Wellington • Since Jan 2007 • 1142 posts Report Reply

First ←Older Page 1 2 3 4 Newer→ Last

Post your response…

Please sign in using your Public Address credentials…

Login

You may also create an account or retrieve your password.