THE PANAMA PAPERS have elicited a remarkably low key response from the Prime Minister. The Labour Leader, Andrew Little, has described how John Key, when asked which secret trusts were being used for tax dodging, hiding stolen assets and/or laundering money, responded with a nonchalant shrug of his shoulders. The day before, when challenged about the potential damage to New Zealand’s reputation – now that we’ve been fingered as a simply dandy spot for masking the millions of Mossack Fonseca’s clients – John Key told journalists that there were many, perfectly legitimate, reasons why a foreign investor might park his money in New Zealand, adding that it was quite wrong to call his country a “tax haven”.
Key’s “ … what? …” reaction to the colossal data leak which has already claimed the scalp of one prime minister and put the careers of many other world leaders at risk is rather perplexing. Is he not able to predict the impact the Panama Papers are bound to have on the privileged privacy of the global elites? How the 11 million-plus documents are going to be used to prise open the lid of one of the biggest cans of plutocratic worms the world has ever seen. Why doesn’t he get it?
There are 55 million answers to that question. For a long time now John Key’s fortune has dulled his otherwise acute political judgement. Six years ago, in May 2010, Key’s government came under heavy criticism for tax cuts conferring huge windfalls of cash upon the wealthiest New Zealanders. Not yet two years into the job, he struggled to grasp the motivation for his critics’ outrage.
“We can be envious about these things”, purred the Prime Minister, “but without those people in our economy all the rest of us will either have less people paying tax or fundamentally less services that they provide.”
Seldom has so much of the mythology of the very rich been packed into a single sentence.
First comes the notion that his fellow citizens’ reaction to his government’s massive transfer of wealth from the poorest to the wealthiest members of their society is motivated not by their keen sense of its manifest injustice, but by simple, old-fashioned envy.
Then comes the argument that without such regular transfusions of cold hard cash, the very rich will simply up-stakes and leave for a more congenial jurisdiction. Somewhere that makes them feel welcome – not like lepers.
Finally, Key goes for the clincher. The notion that it is the energy and drive, the wisdom and skill, and the hard-earned cash of wealthy entrepreneurs that provides the rest of us “parasites” with the goods and services that we are simply too stupid and/or lazy to provide for ourselves.
Ayn Rand couldn’t have put it better.
In the light of this earlier demonstration of Key’s deep belief in the superiority of the very rich; and in the very different measures that must be taken of their needs and deeds; should we really be surprised when he struggles to understand exactly what the persons exposed by the Panama Papers have done wrong?
If you believed as strongly as John Key does that the very rich are better than you and me; and subject to a very different set of rules; then you would probably shrug-off the Panama Papers too.
Key shrugs off anything he finds uncomfortable,but we will not be fooled by that
its his way of deflecting blame or culbability.
Key thinks he controlls all of NZ and will use his power to refuse information .
Nicky Hagar as an international investigative journalist has access to Panama papers,and will use his knowledge to overcome Keys shrugs.
Another Dirty Politics book coming up after the ‘”Inquests “?
Max Key gone to live in America,Stephie Key in Paris,Mrs Key we dont hear much of ,maybe John will be packing on his own, lets hope he has his American passport handy.Lets hope he needs it soon.
Well said Elle.
It is just too bad for America and Hawaii when he does decide to escape the damage he has done here. He thinks he has us all fooled. What an idiot.
He does not represent us but he surely does represent his beloved criminal and greedy corporations and banksters who should all be put charged with their offenses.
It is shocking to see the recent Greenpeace map showing where all the deep sea oil drill permits are. He has sold us and our country out and then wants us to believe that it is all in our best interest. He wants us to believe all his lies.
Impressive Photo Ops reign supreme for him and he is a massive disappointment and will be known as our worst PM ever.
Check out the short video in the middle of the below link –
http://sitsshow.blogspot.co.nz/2016/04/The-Panama-Papers-Largest-Leak-in-History-Propaganda-Preparation-for-Mass-Arrests-or-Evidence-of-Silent-Cold-War.html
A very short and extremely ! ! important link about the victims of the Panama Papers. Please pass this on as much as possible to as many as you can.
Just the tip of a huge iceberg.
https://www.youtube.com/watch?v=F6XnH_OnpO0
Hear hear Elle. Summed up well.
Results of a recent survey:
‘WHO DO NEW ZEALANDERS TRUST?
9. Local government – 12 per cent (down 37 per cent)
11. Government ministers – 10 per cent (down 49 per cent)
13. Members of parliament – 8 per cent (down 54 per cent)’
The only shock is why it took so long for the true nature of politicians and local government to be recognised. And the best explanation for the slowness in the public’s awakening is the complicity of the mainstream media in keeping the lid on official criminality.
The problem is in your core proposition, After-the-Truth. Politicians may be seen as venal and self-serving, if not downright nefarious, but because of this broad-brush approach to the judging of Politicians, the moral equivalency argument kicks in. “They’re all at it! They’re all as bad as each other.” The disenchanted electorate is encouraged by defenders of the current administration to believe this, and consequentially Key’s government is given a pass based on the notion that whoever is in power will be just as bad.
However, I consider the current Government to be the most morally bankrupt in living memory.
This is not coincidence, or just bad luck, in my view. I believe the tenor of this administration is seriously harmed by two fundamental beliefs held by John Key, and presumably other members of the inner circle.
The first is that money is the only worthy goal of life, the only purpose of existence and the only driver of decision, motivation and measure of success. This fascination with dosh is a common theme among people who have some. The more they have, they more obsessed they are likely to be. John Key’s problem is that his entire life has been about money: getting it, multiplying it, hiding it, taking it from slower-witted players and, finally, spending it in as ostentatious a way as possible to enhance his and his family’s standing among his peers. Who would have thunk that other people might be motivated by other things. But when you don’t have money, you tend to focus on things like a roof over your head and enough food to feed your kids, or a nice, clean environment to walk through if you are lucky enough to make it to the country areas.
The second belief is that there are virtually no constraints on behaviour to achieve your ends. If money, having it, that is, is the only good and the only measurement of a man, then why should there be limits on getting it. And by extension, to have won is the only meaningful goal, no matter how. You do what you have to do to win. Winners write History.
I wonder who will write his history.
How right you are Nick ‘This government is the most morally bankrupt in living memory”
Key has led NZ like quail following a trail of breadcrumbs.
Key has put a real shark in charge of social welfare till it no longer serves the people,her actions have created anger enough for innocent workers in WINZ to be killed ,and she smiles and claims shes proud of her work.
Key has sold off our assets to his cronies,ie power companies as one example. Do you think its the power companies making Smart Meters compulsary, its the government, who are looking after their cronies,the ones who bought the big shares in these power outfits. i ask my power provider if they intend to put in smart meters ,”not unless the government makes us “was the reply.Smart meters are just another trick to controll and siphon money out of us NZs.
The Kiwibank ”part sell off is just that, part, until they can come up with an excuse to sell all of it.A $100,000 for the government coffers,why! it was the peoples bank,not Keys.
NZ water given free to sell at huge profits overseas ,probably china,water is so precious but obviously a cut in it for “someone”!!!
So many cheap tricks to sell NZ off .Land ,houses.
Farms with huge deposits of minerals for the cronies to mine for, no growing food by those people only wealth.
Now we find Key is more than likely allowing these greedy people to hide the money in trusts in NZ ,we are a goldmine to Key and his ilk .probably there is money laundering going on as well.
So we quail led by breadcrumbs on a trail that leads to a ditch, a trap where there is no getting out of,are led to poverty and enslavement. Any money we might have will be electronic,so the banks and government can controll our money ,the only way we can excist is just to buy products provided by the big business,like the company stores of big business of old ,if you worked for them you had to buy from them at very high prices.
Getting the picture of where we are being led by this unscrupulous snake. ?
This applies to the blind followers of Key, any money you have will be his and his cronies.
If the contract for government entities banking were to be given to Kiwibank to operate they would be a big provider of profits that at present go offshore by Westpac,which is known as the goverments bank. A National party man Simon Power was put presumably into Westpac to make sure Nicky Hagars details were handed over.
Now its shown as not legal , but when has laws been applicable to Key.? The Hagars papers were to find out what they contained, the same as Slaters stolen info,was Slaters home raided ,no way ,no need ,Key knew exactly what Slater was up to.
So many crimes committed by this government and Key just shrugs!!!!!!!!!!!!!!!because he has the law in his pocket maybe!!!
It will be interesting to see what happens to “businessman” on trial,
So far hes been looked after, wonder what he knows????
My typing finger gone numb, Bye.
Check out who owns Westpac , not Australia as you imagine, google it ,our super handling profits go to , you guessed it foreign shareholders with an American in charge of Australian end.
Keeping the lid on official criminality, our community is seething at the criminal activities here in this little town, we feel out numbered 30 to 1 here, the police are way out numbered every time there are regular unlawful assemblies when hell breaks loose at night, we take our dog inside to protect her from being killed. Flick all gang associates from the media or patched gang members from the media as they are what are stopping the real news being published, effectively they aid and abet criminal activities, and use their positions to direct thuggery even to the point of refusing to pay their debts as another form of gang forced suppression, their tactics are cunning, those gang businesses deal in drugs and all can smell it when they walk or drive past the commercial business’s they operate. Its corruptness that stops small towns moving forward, we dislike criminal corrupt 100%.
You overlooked Key’s insinuation that he is one of the “rest” of society, not one of the wealthy.
“…but without those people in our economy all the rest of us will either …”
The dishonest creep.
Exactly, and that’s the type of weaselling that keeps him popular. He is NOT one of us, no matter how poor his enunciation or vulgar his behaviour.
Just to begin discussion. The Panama papers illustrate the bloodsucking parasitism of the Finance which includes criminal tax dodging ,the Insurance and Real Estate sections the latter making fortunes from rentier activity and capital gains. Key made his 50mill pile working for wall street and the city of London money manipulators.
Killing the Host by Michael Hudson
The riveting writer, Michael Hudson, has read our collective minds and the simmering anger in our hearts. Millions of American have long suspected that their inability to get financially ahead is an intentional construct of Wall Street’s central planners. Now Hudson, in an elegant but lethal indictment of the system, confirms that your ongoing struggle to make ends meet is not a reflection of your lack of talent or drive but the only possible outcome of having a blood-sucking financial leech affixed to your body, your retirement plan, and your economic future.
In his new book, “Killing the Host,” Hudson hones an exquisitely gripping journey from Wall Street’s original role as capital allocator to its present-day parasitism that has replaced U.S. capitalism as an entrenched, politically-enforced economic model across America.
This book is a must-read for anyone hoping to escape the most corrupt era in American history with a shirt still on his parasite-riddled back.
Hudson writes from his most powerful perch in chapters describing how these financial parasites have tricked our society into accepting them as a normal, productive part of our economy.
….
How else to explain, other than kleptocracy, the fact that Wall Street’s richest mega banks collect the life insurance proceeds and tax benefits on the untimely deaths of their workers – all codified into law by the U.S. Congress – making death a profit center on Wall Street. Or, as Frontline revealed, that two-thirds of your 401(k) plan over a working lifetime is likely to be lost to financial fees.
Hudson writes: “A parasite’s toolkit includes behavior-modifying enzymes to make the host protect and nurture it. Financial intruders into a host economy use Junk Economics to rationalize rentier parasitism as if it makes a productive contribution, as if the tumor they create is part of the host’s own body, not an overgrowth living off the economy. A harmony of interests is depicted between finance and industry, Wall Street and Main Street, and even between creditors and debtors, monopolists and their customers.”
What has evolved, says Hudson, is that Wall Street banks have “become the economy’s central planners, and their plan is for industry and labor to serve finance, not the other way around.”
To gloss over the collapse of this depraved economic model in 2008, Hudson says these Wall Street central planners simply depict “any adverse ‘disturbance’ as being self-correcting, not a structural defect leading economies to fall further out of balance. Any given development crisis is said to be a natural product of market forces, so that there is no need to regulate and tax the rentiers.”
http://michael-hudson.com/2015/09/book-review-killing-the-host/
When you look at Key you’re looking at one of these parasites in action lulling the infected host,us, that all is well! Nothing here, move on sleepy Hobbits!
Absolutely correct. Key’s aggressive defense of N.Z being a tax haven only leads to one conclusion, he is in it up to his eyeballs. After he stealthily shifts his own funds, we will see Key make policy to shore up said tax haven and once again paint himself as the savior. We just know Key will be sweating over this until his own money managers hastily sort out how to re- distribute Key’s fortune around the globe.
I read recently Key’s 50 mil was the outcome of a choice of what NZers would be comfortable with: 50mil, 100 mil, 150 mil, or 200 mil
Lies about that too
While I don’t shrug off the Panama Papers, it is interesting that the Soros affiliated ICIJ was given the leak, and most of the people it fingers happens to be from regimes he has a bone to pick with. Of course there’s some token collateral damage like a token Icelander, a couple of Saudis, Petro Poroshenko, a bit of embarrassment for David Cameron via the exposure of his tax dodging father which ultimately won’t stick to ol’ Dave himself. The damage is entirely coming down on Soros targets – Russia, China, the Assad government. It’s not that I don’t believe in coincidences, it’s just that I’ve never heard of one when it involves the targets of George Soros’ plans for regime change.
Excellent thinking @ Cemetery Jones.
We should all remember; jonky has somewhere between $50 and $200 million shrugs to give. If I had that kind of shrug power I wouldn’t be caring too much about anything either really.
And did jonky actually say ;
” “We can be envious about these things”, purred the Prime Minister, “but without those people in our economy all the rest of us will either have less people paying tax or fundamentally less services that they provide.”
A minor issue I have with that statement is the it’s fundamentally wrong. It’s incorrect. It’s in fact a logical fallacy. The rich, be definition , keep their money. The rich get rich, by definition, by taking more than they need from either their own society or they find a society they can pillage. If a society is rich, as was ours, the rich simply use their influence to parasitise the politics of that society then feed off its tax created ‘ wealth’ until it dies in the dirt. As has ours. We get the shit, they walk off fatter than ever.
Now, the rich, by definition, are not going to go around espousing values or empathy for their victims are they? No, they are not. They will go around telling everybody that it’s their fault they’re not as rich as them and all they have to do is work harder. That’s another logical fallacy. The rich elite will never allow us normals to ever rise to their level of riche because the riche would lose their resource, namely us, to , you guessed it, make them, the rich elite , ever more rich.
( One might ask; Well, how did the rich get rich in the first place then? They must have worked very hard surly ? ) No. Not at all. Jonky’s wealth at between $50 and $200 mil at his age? He must charge quite the hourly rate that’s all I can say. No, the rich do it another way. They con people. Yep, that’s right folks. NZ’s rich are not much more than con artists. Think about that over a nice glass of chilled water Dears. Let that sink in… ? Take a disprin and use your thinky-thinky thing… It won’t hurt a bit.
So, it’s absolutely no surprise that jonky would say his rich, elite, mates make our money, even though they don’t. They only take. They never give. And he’d be nuts to say otherwise.
That’s why I think we need to purge foreign banks from our lands, write off mortgage debt, chip neighbourhood money lenders like the dogs they are and re nationalise our assets and services. Oh, and how about a public inquiry into our wealthy, con-artist elite ? NZ ? Panama of the South ! Woo Hoo !
Ideally, a mirror government needs to be created. A sound, select few who can see the bigger picture. Not one of those governments who’re head down in a bucket of money breathing in their own gasses while we become imprisoned, indebted, suicidal, addicted and war on each other in the streets in terrible fits of ferocious rage born of fear.
Always a pleasure to read, CB!
I read an analysis of this leak indicating that this company has also helped African warlords, South American drug king pins, North Korea, and transnational terrorist organizations. Top kek.
But why are we surprised at all? Britain’s HSBC only got a slap on the wrist for helping launder money for Iran, Mexican drug cartels, and Saudi banks with ties to transnational terror groups. There are no real consequences for things like this.
HSBC Helped Terrorists, Iran, Mexican Drug Cartels Launder Money, Senate Report Says: http://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-says/
The only way you’re going to have an effect on this nonsense if if the senior company execs are personally held to account and what I mean by that is lengthy prison sentences in conjunction with crippling, punitive fines. That might just calm the hordes of angry crowds wanting blood. We’ve already had a big flair up in Iceland. France is protesting for other reasons. My prediction is England will be next to protest.
I’m actually hoping the poms resurrect the Tower of London and do what they use to do with dodgy bankers. You know. Hang them over the side by the neck.
Principals and managers are now being held responsible for work-safe issues – probably trying to make ACC turn a profit before tax cuts are announced for after the next election
So why shouldn’t Bank CEO’s and Banker Politicians be held personally accountable if slimy, illegal behaviour happens under their watch? It’s the same set of accountability – kids go hungry their stomachs contract, blind trusts get fatter and their greed gets more rapacious. NZ borrows 100 billion dollars to fund tax cuts for the rich and our Kiwibank is sold off to the Super Fund and ACC.
Jail the politicians for their negligence and their complicity in state asset sell-offs and Panamanian-style trusts to launder proceeds of their crimes against the state.
As far as I was aware Key wanted to set up a tax haven in NZ just like he was part of that which created one in Ireland.
Besides reducing the tax rate on the rich in 2010 he also reduced the tax rate for corporates.
I wonder how much of his own money Key is sheltering in a similar way.
Likely TONS – that slimy sleezy lying greedy piece of work that most are laughing at when he speaks. He is beyond a joke, a sad and wealthy little man.
I think you are on the “mark” there, Mark!
My view is that J Key may well be feeling very uncomfortable about the release of more of the files from the Panama Papers in the weeks ahead.
Bring it on I say.
I know the Gaurdian and the Huffington post has all the documents and the ICIJ. But I don’t think they have the capabilities to release all one and a half terra bytes of the information or even make them useful to any one wanting to gleam infomation from the leaks, at least not find anything us full in one year. The ICIJ has had hordes of people poring all over the docs for a couple years. They did a thorough job but they’ve only been able to target twelve heads of states, and, no one from America, at least not directly.
The only orginisation that I know that has the capability to make each document searchable on the net is Wikileaks. And I don’t think there going to get them.
I think the Gaurdian and Huffington post will drip feed the treasures over the next ten years. So it will take a long time before the complete there full investigations on American tax dodgers before we can get a look in to the docs, I suspect.
I don’t blame the news papers for taking the cautious approach on America. Americans get away with this stuff anyway.
I don’t know how true this is, but I heard it suggested that the reason why there are no Americans is because they have states that are like tax havens in their own country.
Basic tax shelters are a global phenomenon because they are cheap, but the really scummy stuff is expensive enough only millionaires would be bothered creating umpteen shell companies to hid there I’ll gotten gains. And not for the reasons most people think. These tax shelters are mostly used to hide wealth from wives and partners.
America is full of tax shelters and getting more popular by the day:
http://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states
Obama calls for international tax reform – what will Key do now?
Written By: Anthony R0bins
Date published: 6:31 am, April 7th, 2016 – 14 comments
Categories: accountability, Ethics, International, john key, law, tax
Tags: barack obama, panama papers, tax haven
Key has made it clear that he doesn’t care that NZ is operating as an international tax haven. When The Greens called for action he called them “barking mad”. But last night President Obama called for international action on tax reform. What will Key do now?
http://thestandard.org.nz/obama-calls-for-international-tax-reform-what-will-key-do-now/
Colonial Viper 14
7 April 2016 at 9:35 am
LOL what a joke; Obama is utterly owned by the big investment banks, and the USA is effectively one of the biggest and longest standing tax havens in the whole world.
They even managed to get Obama to sideline Elizabeth Warren from the White House economic team, while all the former Goldman Sachs and JP Morgan cronies stayed on whispering in Obama’s ear.
I can’t believe that people can even take Obama preaching about international tax havens seriously.
This is the man looking to make mega-corps even less accountable through mechanisms like the TPPA.
This shit is just the 0.001% trying to placate the public through PR. Don’t be so easily bedazzled.
Panama tax rort stirs world leaders but not Key
Written By: Simon Louisson – Date published: 8:00 am, April 7th, 2016 – 3 comments
Categories: business, capitalism, Economy, Globalisation, International, john key, Minister for International Embarrassment, national, national/act government, Politics, same old national, tax – Tags: panama papers
Contrast John Key’s response to revelations in the “Panama Papers” tax evasion scandal to that of most leaders and you understand where the prime minister and National stand on tax and a fair society.
Key’s response was to state that New Zealand has a “robust, legitimate tax regime that requires foreigners to fully disclose”. Nothing needs to change.
As was soon revealed, full disclosure was not only a very economical version of the truth (disclosure did not extend to financial disclosure for example), but exposed Key and National as content to do nothing to prevent multinationals and foreign entities ripping off the New Zealand tax base, to say nothing of swindlers, crooks, money launderers and the mafia using our deregulated, lax laws for nefarious purposes.
US President Barack Obama ordered Treasury and Congress to investigate ways and means to prevent companies setting up offshore shelf companies to avoid tax.
He noted that “a lot of it is legal, but that’s exactly the problem.”
It’s not that they are breaking the laws, it’s that the laws are so poorly designed that they allow people, if they have enough lawyers and caveats, to wriggle out of responsibilities that ordinary citizens are having to abide by.”
People had to know that the wealthy weren’t playing by a different set of rules and not gaming the system, he said.
Tax avoidance is a big global problem. Lost revenue has to be made up somewhere.”
Whether or not Treasury or Congress actions are effective, at least Obama recognises the issues.
Leaders of France, Spain, Austria and the Netherlands also pledged their governments would investigate the shady offshore trust business revealed in the leaks of Panama-based law firm Mossack Fonseca.
Meanwhile, Key denied the “Panama Papers” had embarrassed his Government or created a reputational risk for New Zealand.
New Zealand was a signatory to international tax treaties which allowed information exchanged between jurisdictions and a review of New Zealand’s foreign trust rules by the OECD in 2013 gave New Zealand a “clear bill of health”, he said.
The $24 million of fees generated annually made our lax tax regime worthwhile.
He also denied New Zealand was a tax haven.
Despite this, Inland Revenue warned in 2013 that New Zealand’s foreign trusts posed a reputational risk, adding that “our foreign trust rules continue to attract criticism including claims that New Zealand is now a tax haven in respect of trusts.”
It specifically warmed that New Zealand tax rules were a mismatch with other countries, even where there were doubled tax agreements, which, “may result in income not being taxed either in New Zealand or offshore.”
Use of NZ Trusts
The Panama Papers, the leak of over 11 million Mossack Fonseca documents, reveal New Zealand-based trusts have been used by clients of that firm, many of whom have used the murky route for money laundering, tax dodging and other illegal purposes.
Owning an offshore company or trust, is not illegal, but the Panama Papers reveal that concealing the identities of the true company owners was the primary aim in the vast majority of cases of the 214,000 entities leaked. Criminals, mafia groups, drug barons, human traffickers, oligarchs, highly ranked officials of some governments, have all been shown to be involved.
One New Zealand trust used by Maltese government minister Konrad Mizzi was one of nearly 12,000 foreign trusts in New Zealand, most of which do not pay tax on foreign income.
The “full disclosure” John Key claims for New Zealand trusts, amounts to registering the name of the trust and providing the name of the New Zealand trustee, usually a professional nominee who is adept at being economical with the truth if you can ever contact them.
IRD powers very limited
Further information, such as settlements and distributions, can legally be requested by IRD and passed on to one of 40 nations where New Zealand has double tax agreements (plus 11 others which have information sharing agreements), but IRD has to have reason to suspect before requesting such information. In practice, that just doesn’t happen. And if the trustees come from some murky jurisdiction outside the 51 above, then IRD is whistling in the wind.
University of Auckland Law Professor, Michael Littlewood, said IRD’s ability to collect information is very limited. With the exception of Australian residents, the trustee of New Zealand foreign trusts did not have to disclose the identities of the people putting assets into the trusts, where they come from, what the assets were, or their value, or who benefitted from them.
“As currently provided for, they (the disclosure requirements) are woefully inadequate.”
The do nothing option
Initially, Revenue Minister Michael Woodhouse ruled out any changes, saying New Zealand had “world-class” tax rules but as the revelations of the Panama Papers gained traction, amended his position to stating, “the Government wouldn’t rule out changes”.
However, instead of taking the initiative, he said the government would await OECD-led reform.
Woodhouse’s predecessor, Todd McClay, sought advice following the IRD’s 2013 warning of reputational damage, but was put off because “it would require a lot of hard work” and “the argument was, ‘was it worth it in terms of all the other issues on the IRD work programme?’.”
Multinationals’ tax avoidance even more damaging
A similar, and more financially damaging, fiddling-while-Rome-burns attitude has been taken in respect to multinationals like Facebook, Apple, McDonalds, and Coke rorting different tax rates around the world so they play virtually no tax here or anywhere else.
Law Professor Craig Elliffe, author of the book International and Cross Border Taxation in New Zealand, said 20 top multinationals paid just $1.8 million of tax on over $10 billion in turnover. Even John Key didn’t think that was totally fair, he said.
Former Google chief executive Eric Schmidt infamously defended such accounting tricks that had allowed it to funnel billions of dollars of profits to Bermuda each year, saying it was “called capitalism”.
When the OECD surprised the world by rapidly coming up with a set recommendations on its Beps (Base Erosion Profit Sharing) project to prevent avoidance of an estimated US$100 billion to $240b of corporation tax by the likes of Google, McClay promised that New Zealand would implement these before the end of this year.
Answering questions about how the legislation was progressing, current Revenue Minister Woodhouse pointed to the legislation introduced in November covering GST on online purchases.
This was an important first step in the government’s efforts to deal with increasing volumes of online services and other intangibles purchased from overseas suppliers, he told The Standard.
“Consultation had also been undertaken to seek feedback on proposals to strengthen our non-resident withholding tax rules which currently could provide the ability for non-residents to shift profits out of New Zealand with no or minimal New Zealand tax paid.
“Feedback from the public has been analysed and considered and I expect to introduce legislation on this matter in the near future,” he said.
“I would note that the most effective way to ensure that multinationals cannot exploit differences in tax rules lies in ensuring that there is consistency between jurisdictions. If there is little difference between tax rules, then profit shifting becomes pointless. And that is why we have committed to an OECD led, global response to this global problem.” Woodhouse said.
He told The Standard that a strong network of double tax agreements, tax information exchange agreements and such agreements were crucial in getting multinationals to pay their fair whack of tax.
Double tax agreements actually a threat
Prof Elliffe said such treaties were actually “the most significant threat because they are being used in a way that significantly reduces the ability of New Zealand to tax New Zealand-sourced business profits.”
New Zealand only had the right to tax these profits when a foreign multinational operates through what is known as a “permanent establishment” in New Zealand.
“At the heart of the problem is that some multinationals can operate without triggering a tax liability due to the way in which they can step around the taxation of business profits using (legitimately) these permanent establishment provisions of double tax agreements,” Elliffe says.
This is because they can sell or deliver their goods online and have them delivered without breaching the permanent establishment threshold.
Elliffe says that many multinational have structured their affairs so that double tax treaties are “creating a situation of double non-taxation”.
He suggested New Zealand should follow the example of Australia and the UK which had enacted measures of “unilateral legislation treaty override” which means that where a multinational abuses the intent of tax laws or treaties, they will have to pay up anyway.
However Woodhouse dresses the measures the government is considering, they appear to fall far short of dealing with the issues of full disclosure of foreign trusts, or of multinationals having billions of dollars of sales with commensurate profits in New Zealand and paying next to next to no tax.
The lack of intent to act comes down to ideology – that tax is anathema to the Right. The less tax the better and therefore the idea of closing tax loopholes at the bottom of National’s agenda.
John Key’s background was with the now defunct bank Merrill Lynch, which like other US investment banks, was instrumental in designing aggressive tax avoidance plans. Many in National’s constituency will be using offshore trusts and aggressive tax planning to minimize their tax. Why would he act to stop such behaviour?
(Simon Louisson formerly worked for The Wall Street Journal, NZPA, Reuters and was most recently a political and media adviser to the Green Party)
http://thestandard.org.nz/panama-tax-rort-stirs-world-leaders-but-not-key/
vto 1
7 April 2016 at 8:14 am
contrast Key’s approach to the world’s uber-rich…
with his approach to NZ’s beneficiaries….
it is easier to set up your illegal tax-dodging business in New Zealand than it is get a measly benefit to pay for a roof over your head. Check the difference between the paperwork, hoops and loops, and time taken for each …
Key is the Prime Wanker of New Zealand
The Aussies are pissed, and this could be the one time I agree with them without reservation.
Now Key was a laughing stock in many of Nations around the world before this, we Kiwis forget that the hair pulling was seen as quite disturbing by the rest of the world.
Now he adds to his creepy factor, by this stunt.
John key the enabler of the uber-wealthy and criminals.
It’s a race to the gutter with this lot.
In the interests of fairness could someone with knowledge of finance and international investment please answer this question – honestly (that effectively excludes Gosman, Andrew and the rest of the troll brigade).
Do New Zealanders (other than lawyers) actually get anything out of allowing rich foreigners to set up trust accounts here?
If so, what?
If not, then why the f..k do we allow them to do it then?
Key is not struggling to understand.
He just doesn’t give a flying f**k.
I was with a psychologist and we watched his press conference on mute.
The conclusion she came to is he is lying through his teeth and has plenty to hide.
The over casual body language and the nose wrinkle were immediate give aways, but there were plenty of other clues for those with an expert eye.
Key does not have acute political sense.
What he has is a massive amount of support from the type people who hold these trusts.
The politician who publicly calls bullshit on these sense of entitlement ‘elites’ is the politician who will win the next election!!
Key will have mates involved in that kind of trust set up, I bet. He is covering for his mates from all over the world, and who knows, he may have sheltered some extra investments and funds in such trusts himself, which we know nothing about yet.
He has homes in Hawaii, UK and possibly somewhere else, so perhaps he has some “tax home” status in those places, that is for companies he set up there, which may also have shifted certain so far unknown wealth through Monsecka into NZ and other trusts all over the place.
Key was involved in the very financial business that knows all about these “investment options”, so he will BS us when saying he knows nothing more and thinks it is all “legal”.
Mossack Monseca that was meant to read, which I wrongfully combined into “Monsecka”.
David Cunliffe!
He is the guy to do this, he was shafted by dirty politics. He is talking the talk of Sanders and Corbyn.
No wonder they shafted David it is all so obvious now we see what the real agenda for the Kiwi land tax haven was/is. FFS why aren’t we like ICELAND and getting rid of FJK and the rest of the Nat snouts? Stand together!
Spot on there Kate.
David Cunliffe was no 12 (final) on the list for questions for oral answer yesterday, re the tax haven/tax avoidance foreign trusts. He was firing some very hard questions at Louise Upston in her capacity of minister for ??????
She was looking a tad uncomfortable at Cunliffe’s direct challenge, so I’d say a nerve was being pinged there. Good.
I hope he’s allowed to question FJK sometime, because if anyone can, Cunliffe is the Labour politician to make FJK squirm. But will the Labour hierarchy let him though?
As the Panama documents leak their contents, with one PM gone (Iceland) and now David “swine porker” Cameron fessing up that he and his wife had some money invested in foreign trusts, to avoid paying tax, through his late father’s investments, we wait for more heads to roll.
No doubt there will be a few NZ politicians, including some high flying corporate cronies of NatzKEY who could be exposed! We wait with interest!
Yes David Cunliffe did a great job at question time.
But did anyone else hear the taunts from the National benches ,”he’s back, he’s back”. They were all very quiet and sheepish by the end of Cunliffe’s questioning.
And what’s up with the interjecting questions from David Seymour, supporting the government on this? Did he soil himself, does he need a change of nappy?
I’m just looking at “Rentier State” on Wikipedia. It says that one way a rentier state can derive its income is by being “rich in financial instruments such as a reserve currency”.
Here’s an article on Swiss Gold. I can’t claim to understand the economics behind it, sadly, wouldn’t that be nice. However, some things do seem to have parallels here, like the property bubble mentioned about half way down.
http://dailyreckoning.com/will-the-swiss-vote-to-get-their-gold-back/
Written by Ron Paul which I only discovered after the fact. Still thought it was interesting, if different point of view.
Has any journalist actually asked him directly WHY people want to park their money in NZ trusts? There is only one answer that he can’t weasel around – money is here to avoid tax. Do they receive interest on these deposits? If so they should be paying tax here.
I cannot understand why this ex money trader is still prime minister and has such a hold on New Zealanders.
I’m waiting for a new Nicky Hager book to come out in about a year entitled “John Key and the Panama Papers”.
Just before the election should do nicely and then New Zealanders can see for themselves the trougher we have as Prime Minister.
The people of NZ should demand full and open transparency when comes to trusts (tax avoidance havens).
The government and the elites want to take away our privacy and when we question their motives they tell us “if you have nothing to hide then you have nothing to worry about”. Well it should work both ways. We need to make this an election issue.
The “Winebox Enquiry” set a precedent here in NZ, perhaps if we had locked up some bankers, politicans and judges New Zealand as a whole would be a lot better off?
It beggars belief, how casually our media and also most in the public seem to just dismiss this Panama Papers scandal, or do not even bother to take note.
So according to John Key we are supposedly having “transparency” when it comes to our trusts. But all they need to tell IRD is the name of the trust and that it exists, not much more.
They trustees are meant to keep a list of trustees and some other details, possibly who is a beneficiary of it, but that is not what they have to reveal to IRD, unless IRD may decide they need to know a little more and ask them to present the information.
As the trusts in question, by overseas trustees or investors in the trust, do not need to pay any tax here, there will be little reason for IRD seeing much sense in asking for “transparency”, as limited that is anyway.
Only if a country we may have a tax agreement with may present them with information that may mean, there is a need to look into things, will IRD feel prompted to ask some questions.
But to do that they must mention the name of a person they have concerns about and the trust he may be holding. As all such investments and arrangements are done via using shell companies and middlemen, legal and other experts, administrators, it will be damned hard for any tax authority in any of our tax agreement partner’s countries to get the name of a trust that needs to be “transparent”.
So the likelihood of the info being tied together, the name of the trust being mentioned by the overseas tax authority being known and mentioned, that is extremely low and unlikely. Perhaps if there is already criminal investigations going on overseas, may some useful info surface and be communicated.
I suggest the opposition ask IRD how many investigations or inquiries they got from overseas tax authorities, to reveal trust info. And then how much of it was being followed up. That will give us some idea of how seriously they take all this.
I bet we get damned little in info, as the trusts and middlemen will have been structured to avoid any risk, so few if any will ever be caught out.
As for John Key, he will possibly given personal, discrete advice to mates he knows overseas, about how easy it is to invest in a trust here, to protect their money, and as he may well have done this, he will be all hum and wishy washy about it all, as he has been.
From Key’s perspective this is all legal and acceptable, as it may bring some people into the country, who may decide in the end, that through their trust, or without their trust, they do some other investing in NZ, where casinos, homes, farms, endless businesses and so are always up for sale.
Go and take a walk through the Viaduct Harbour, see the many expensive luxury yachts and cruises, see the rich prick’s apartments and you will realise what is going on. It is not by coincidence that many rich Americans, Chinese and others love to come here, for a round of golf, a cruise on the harbour, for some gambling, drinking, partying and taking a bit of fresh air in driving their luxury cars around the country.
This is the NZ we have, a rich man’s land of opportunity, and the locals now being largely dumbed down, willing mercenaries and servants, who do anything for a few bobs to “get ahead”. The middle class love it as the real estate sales drive their home prices up, giving them greater equity, more credit allowance, so they can partake in the casino gamble.
This is a country that long ago sold its soul, and those that voted for Key chose to dance with the devil that loves money and privilege above all else, plus publicity, see the never ending photo shots with the big shots from all over the world.
A young boy’s dream has come true, after being a currency trader, a merchant banker, a broker and what else, he was hauled in to become PM, of a nation of sellouts and mostly idiots, I fear.
God loves NZ, once the people thought, no, that was once upon a time, most NZers sold their souls to the devil by now, so now nobody likes to be reminded of the associations that come with it: Panama Papers reveal it.
I think it would be really interesting to hear Labour tell us how NZ would be different today if they’d won the last three elections.
NZ wouldnt be a debt ridden, poverty stricken mess like it is today under John key if Labour had of won the last 3 elections. NZ also wouldnt have been sold off to key’s foreign cooperate/government mates, wouldnt have been made into a tax haven for John key’s criminal associates, and NZers wouldnt be tenants in our own country, wouldnt be made to feel so fearful of their futures, would have had a better standard of living, would have had jobs. NZers would have retained democratic rights, would have been treated with more respect, not sidelined for National’s self interests… and that’s for starters…..
Yes WORDS NZ wouldn’t be debt ridden and Labour left Government debt of just 8Billion and now that Crown Debt has climbed to over 100 Billion dollars while the media failed to check why the debt increase has not been added the economic performance figures during treasury estimate reports??
Let us not forget that Labour created the secrecy laws that helps Key’s crony friends stash away their money in secrecy in 1998. They had a chance to remove those laws under Clark … So, now that it’s revealing its very ugly head Labour needs to put its actions where its mouth is because we aren’t seeing policies from them yet on it… just criticism. The Greens have for quite a while said that they will repeal these laws and prevent such people and companies from not paying their tax (Labour’s gone part of the way in it’s promises, but needs to let go of its corporate friendliness and do much more to equal the Greens…).
ROFL Lets not forget that National changed our laws in 2011 to create a tax haven. Fact.
107 out out of the richest 193 nzérs pay no tax in nz.That is an obscenity.Hand grenades anyone
Thanks David very much,
“107 out of the richest 193 NZérs pay no tax in NZ.
That is an obscenity. Hand grenades anyone”
Can we find out who these criminals are please as we need to make up a “name & shame report to broadcast around and during the upcoming election please?
CLEANGREEN – you say
“Can we find out who these criminals are please as we need to make up a “name & shame report to broadcast around and during the upcoming election please?”
Absolutely.
And at the same time, name and shame the politicians associated with them!
And David, that includes John key too, he’s not paying his fair share of tax either.
If you would ever expect our useless shit media try to hold our shit government to account for anything, forget it. At least German media is on the tails of the Panama papers trail. They sent someone there right away, and they have confronted the leading players, believe it or not. Sadly this is only in German, but I am sure some English version will become available soon:
http://www.ardmediathek.de/tv/Reportage-Dokumentation/PanamaPapers-Im-Schattenreich-der-Offs/Das-Erste/Video?bcastId=799280&documentId=34494244
John Key is up to his head into this, believe you me, he known more than he admits, he is corrupt and should be thrown into the slammer same as many others.
I wish, to your last sentence MIKE.
Key is the most popular PM ever in NZ History – Fact
The fact is Jack, that Key’s popularity is spin.
The reality is that the very rich do live by a whole different set of rules to “ordinary” New Zealanders in fact I’m still awaiting the day someone tries to assassinate toffee nosed key but sadly this has not happened yet
Labour’s petition Demand action on tax dodging
http://www.labour.org.nz/taxdodging
All this high dudgeon against the rich and famous and trying very hard to blame the Prime Minister for the whole affair hides the fact that this information was stolen. Yes, you are all enjoying the illegal publication of privileged information which is theft, pure and simple. Just because you don’t like the people who had their information stolen does not make the act of theft legitimate.
Just think how most of you fight to keep your own information secret from the State, but enjoy the disclosure of others information.
Two wrongs do not make a right.
I am saddened that there is no ethical debate around this issue. It is all about “they are rich and they deserve it”.
I presume that you would happily receive a computer stolen from a rich person “because they can afford it”?
Right and wrong are clear ethical positions.
I wondered when the likes of Andrew and Gosman and now Frances jump to the defense of the robber baron bankers and neoliberal trickle-down bullshit promoters.
DAVID above summed it up best: 107 out out of the richest 193 nzérs pay no tax in [NZ]. That is an obscenity.
Wikileaks and Panama Papers and Dirty Politics need to keep outing these robbing thieving bastards. Time for the International Court of Justice to go after these slimy lowlives.
There are no two ways around it, some Nat supporters like yourself Frances, are so criminally minded like the National party you support, that you would make excuses for such outrageous abuses of power, no matter what.
Thank the universe for the whistle blowers!!! because without them, we, the average citizen, wouldnt have a clue to the extent of the lying, corrupt, thieving skulduggery and rorts by self serving treasonous regimes like John key’s are doing behind our backs, whilst forcing the rest of us to pay far more in tax on everything right across the board, but enacting loopholes to give themselves and their rich mates a free pass.
What was that, that Key said about everyone should pay their fair share of tax? he left out the part that said, but that doesn’t apply if you are rich and shameless.
Why aren’t you angry about that? Everyone else is justified for feeling incensed over it.
Close associates Jason Ed, Cameroon Slater and Aaron Bhatnager had no issues about hacking into Labour’s computers and stealing private information for John Key to put up on Whaleoil’s blog site to intimidate and threaten people. Are you ok with that?
All this high dudgeon against the rich and famous and trying very hard to blame the Prime Minister for the whole affair hides the fact that this information was stolen.
I was waiting for some authoritarian to run this argument. Surprised it took so long to appear on the thread.
Hang and draw whistleblowers, blah blah blah, Edward Snowden deserves the death penalty blah blah blah Nicky Hager is a criminal blah blah blah
Don’t fret Frances, Godwin prohibits me making the clear comparisons.
Indeed, Richard.
Ironic, really, that National supporters deride the Panama Papers as being “stolen” – when the greater crime is one of massive tax evasion. So much for Tories being tough on crime, I guess.
IRD considers tax avoidance/evasion as theft, and it costs this country billions of dollars every year.
the less you understand something the greater the tendency to think its not important. People who don’t understand IT have trouble wrapping there head around just why its important and how dangerous being lax can be. The fact that people involved in shady stuff are probably less likely to take their IT guy at his word when he tells them how important it is they follow his rules and keep his department well funded probably don’t help much either
What constitutes a lie, I wonder, in any case, it is now proven that David Cameron has at least been convenient with the truth.
http://www.independent.co.uk/voices/david-cameron-didnt-lie-about-his-fathers-offshore-fund-but-he-didnt-tell-the-whole-truth-either-a6973801.html
Who will be next, 11.000 pages of documents and emails must surely reveal more skeletons in the closet.
I am waiting for the first leading NZ politician to be caught out and exposed, how nice would it be, to finally get rid of John the not so Baptist Key if he maybe caught up in it also.
I should correct myself, yet again, 11 MILLION of pages are contained in the Panama Papers, quite a lot to go through.
More stuff on Panama leak. It says banks in several American states “enjoy unlimited secrecy” and that US is huge tax haven sometimes called “new Switzerland”.
So, JK the banker wants us to be the Switzerland of the South Pacific, that is, he wants banks to come here and “enjoy unlimited secrecy”? Yup, this leak must be just a trifle bothersome for him at the moment.
http://inserbia.info/today/2016/04/us-behind-panama-papers-leak/
This article isn’t very flattering about the ICIJ but interesting stuff about how the big papers are selectively searching the leak.
https://www.craigmurray.org.uk/archives/2016/04/corporate-media-gatekeepers-protect-western-1-from-panama-leak/#tc-comment-title
They are big papers so they don’t have the same limited liability and protections as Wikileaks. So the stories the papers produce from these leaks better generate enough income for all the lawyers they will need
Sueddeutsche Zeitung report the leaker of the Panama Papers is fearing for his life.
https://neurope.eu/article/panama-papers-leaker-remains-unknown-fearing-life/
http://sputniknews.com/europe/20160408/1037701157/panama-leaks-offshore-sourse.html
This is most explosive stuff, and it will reveal more over coming weeks and months, prepare for NZers to be exposed, as TV3 reported on The Nation today.
http://www.newshub.co.nz/politics/strong-nz-connection-to-panama-papers-2016040915
Prepare for Key’s downfall, at last.
Thanks for this info Mike in Auckland.
This should be in-your-face headline news day in and day out, keeping public up with the play. Even more so, considering NZ’s involvement (mentioned 60,000 times in the Panama documents), in foreign trusts, providing money laundering facilities for corrupt foreign politicians and disreputable corporate cronies of FJK and his mob!
It does not seem to matter what is on the news, as Mr Key keeps on surviving and more. The Colmar Brunton poll out tonight, on TV One, was a real shocker, he seems to survive every challenge and test, no matter how unprincipled and immoral he is.
The flag referendum has been ticked off, but not been laid at the feet of Key, there have been hard questions asked re the Panama Papers, but Key gets away with anything.
Mr Smile and Wave seems to be too popular with too many, I wonder where the moral compass of our middle class has ended up, it does no longer seem to exist.
Ego, selfishness, greed and speculation on real estate is what keeps too many going, no matter that we get inundated with mass immigration, with people buying homes with foreign cash that few ordinary Aucklanders can afford, people simply love growth, no matter where it comes from.
Home values keep going up, so more credit is available, and the spending continues, to boost the economy based on a house of cards and little else.
Those that would make a difference, the missing million, are so disillusioned and detached from what goes on in politics and so, they have not been reached by the opposition.
You do not need security and police, when the spin machine has got control of the MSM and the key decision makers, who just keep continuing the mantra of how “great” things supposedly are in little NZ, at the bottom end of the globe.
I despair, I despair.
https://www.tvnz.co.nz/one-news/new-zealand/what-rough-patch-national-and-key-riding-high-in-one-news-colmar-brunton-poll-q09860
Are they putting some drug into our drinking water, I wonder?
Sorry, I put the wrong link in a comment I just made, this is the right one:
https://www.tvnz.co.nz/one-news/new-zealand/poll-flag-flop-fails-dent-governments-popularity
Just in time, a useful “script” for Key, from Cameron, re how to handle any Panama Papers fallout:
http://www.theguardian.com/politics/2016/apr/09/david-cameron-to-launch-local-election-campaign-as-panama-papers-row-rumbles-on
So Cameron thinks he just “mishandled” the issue.
I suppose that many middle class voters that support Key will think, hmm, we pay too much in taxes anyway, just as well people take precautionary steps to protect their “hard earned money” from the fingers of the nasty IRD.
We live in nasty times, and people are nastier than they were many years ago, also thanks to the divide and rule policies of the government.
Key will get away with all this also, I fear, he is simply the charming Lucifer that too many have fallen in love with.
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