Speculation mounts ahead of full Panama Papers text release

Newstalk ZB staff ,
Publish Date
Mon, 9 May 2016, 5:08AM

Speculation mounts ahead of full Panama Papers text release

Newstalk ZB staff ,
Publish Date
Mon, 9 May 2016, 5:08AM

WATCH ABOVE: Prime Minister John Key interviewed by Mike Hosking 

UPDATED: 11.56AM The Prime Minister's promise to crack down on anyone named in the Panama Papers, is being blasted as a cynical way to avoid making real changes.

The full text will be released at 6am tomorrow, and John Key has said the IRD is ready to look through the information.

MORE: Key banning foreign trusts would be a dangerous decision

Labour leader Andrew Little said the latest revelations from the Panama papers are further evidence that we need to scrap harbouring foreign trusts altogether.

He told Mike Hosking it's embarassing for New Zealand on the international stage.

"When see incomes being generated here but being attributed to a head office that sits in a another country somewhere else, it isn't where the majority of shareholders of that particular company are. Some people say this looks like a rort.

"Considerable amount of wealth being invested here but the income that they generate comes from off shore and they're tax free. There's no real benefit to us in having these things here and I think given the damage that it's now causing we might as well just say let's just get shot of them."

He said over the past month Mr Key has been trying to minimise the problem, but now he has done an about-face, to talk tough.

"I suspect as usual with the National party and John Key they've done some polling, found that they're completely at odds with most New Zealanders' views on this, and now want to look like they're doing something."

Although there have already been some leaks, speculation is mounting about what will be revealed.

Little said what we've seen so far doesn't paint a good picture for New Zealand.

"The release a month or so ago showed us that there's 12,000 of these foreign trusts here in New Zealand. We are mentioned as a country 60,000 times, I mean that tells you that we are fairly donkey-deep in all this sort of stuff."

But Key told Mike Hosking New Zealand being at the centre of it all, is inaccurate.

"There are 215,00 entities identified, about 350 in New Zealand. The investigative journalists around the world have listed the top 10 tax havens in the world. We're not on it."

The IRD has looked at New Zealand and concludes it's not a tax haven and Key agrees.

"We have complied with every single request for information this country 's had. We proactively, by the way, give that information to Australia and we were already working on a Bill that will allow us to have even greater automatic release."

Green Party Co-Leader James Shaw said newly leaked documents reveal New Zealand's an integral part of the global tax avoidance network.

"The [ ] review needs to be broadened out into a proper ministerial or public enquiry. It needs to draw on a range of experts including those from Inland Revenue, Companies Office and anti-corruption experts as well."

Investigative journalist Nicky Hager said he and a team of investigative journalists have gone through thousands of papers in the data cache.

They relate to 21 tax havens, not all in the likes of the Cayman Islands.

Nicky Hager said lawyers from a Panama law firm are working to set up secret trusts in New Zealand.

"There's not a scattering here or there of New Zealand ones, there are tens of thousands of documents showing, not New Zealanders using the tax haven system for their own tax but New Zealand being the tax haven helping people in other countries to hide their money.

"It's not illegal for New Zealand to provide these services because there's a law here that says that they can. The point is helping in people in other parts of the world to break the law, and to hide their tax, and deprive their countries of money."

John Key has responded to Hager's claims saying: "So Nicky Hager says we're a tax haven, well with the greatest respect, Nicky Hager is a left-wing conspiracy theorist."

Shaw isn't impressed with this Key's approach to blame Hager.

"The Prime Minister's approach of attacking the messenger is a classic diversion tactic designed to deflect attention away from his own lack of action on doing anything about this industry in NZ."

Speaking to TVNZ, Hager said the centre of exploiting the loop hole is an Auckland accountancy firm Bentleys, run by former IRD worker Roger Thompson.

"An ordinary office in the middle Queen Street, where nobody would ever look, and where only inside the computer files and the filing cabinet that you would realise that that is a centre for all kinds of tax haven activity."

Massey University's Deborah Russell said how the Bentley's advertises itself is telling.

"We got a little bit more of an insight into their mindset. They advertise themselves saying that New Zealand offers a benign tax environment, that means paying zero tax, so I think they're out there advertising us as a tax haven."

She said getting rid of the secrecy around foreign trusts is the best way to deal with it.

"At the moment we collect very little information about them. I think we need to collect much more information about them, and in due course, we need to start proactively sharing that information."

Niue, the Cook Islands and Samoa have also been named as prime destinations for the rich to hide their money.

Meanwhile, the Government has said they won't be banning foreign trusts any time soon.

Labour said we shouldn't wait, and should start the process of banning foreign trusts, but Prime Minister John Key said that would be a dangerous and knee-jerk reaction.

"Because actually we have very good tax rules, they're integrated tax rules and they're respected around the world," he said.

"There may well be changes on the tax side. We would again, happily adopt those if they were the right thing to do."