A matter of trust

The left hoped this morning’s release of the Panama papers would be a bomb that would blow up the Prime Minister.

As has happened every time they’ve tried it, all they’ve delivered is a damp squib.

Rather than being a critical blow to the Government, political commentator Chris Trotter says so far, the Panama Papers revelations have been “meh”.

The entire database of 11.5 million documents will go online on Tuesday morning, but some New Zealand journalists — led by Nicky Hager — have been given early access.

They’ve revealed 61,000 of the documents, leaked from Panamanian firm Mossack Fonseca, mention New Zealand. But there is no evidence our zero-tax foreign trust rules are being used for illegal purposes. 

That looks like a big number but 61,000 is less than one percent of the 11.5million documents in total.

“Like a good leftie I was salivating this morning at the prospect of what I was going to come across at [6am],” Mr Trotter told Paul Henry on Monday.

“I read it and I went ‘meh’. This will be the best that they’ve been able to find to date.” . . 

“If you’re going to bring down a Prime Minister… then you’ve got to have something that links the Prime Minister not only to something that has the perception of dodginess but that is actually illegal. Nothing to date that I’m aware of has pointed to any kind of illegality at all,” says Mr Trotter.

“It will be a major issue for a little while, then, as has happened so often before, the Prime Minister will move on.”

While Mr Hager says the Panama Papers conclusively prove New Zealand is a tax haven, PricewaterhouseCoopers tax expert Geoff Nightingale says the present rules are “orthodox” and “not uncommon”.

“We need to think about our reputation — it’s a critical business asset. But there’s nothing broken around the tax treatment of these foreign trusts. These are foreign assets and foreign income of foreigners — all we’re doing is administering them.”

New Zealand is a tiny blip on the international radar. Any damage to our reputation will come from opposition politicians, conspiracy theorists  and the media who are trying to make this look like a scandal when it isn’t.

The OECD consistently ranks our tax rules highly; the government has appointed a tax expert to do a review and has undertaken to make changes should the review deem that necessary.

It’s a matter of trust. Our laws and regulations are robust and trusted internationally and should the review uncover any problems they will be addressed.

The key difference between New Zealand and a proper tax haven is we have rules around disclosure.

“We don’t want to be facilitating illegal international activity and we don’t want to have a reputation for that, and the way we deal that is by being clear about who we’re dealing with and what are the assets and where is the income being distributed.”

Mr Nightingale says a review undertaken by John Shewan, former PricewaterhouseCoopers chair, should be broad enough to fix any reputational issues.

“It’s got the disclosure rules in there, it’s got the anti-money laundering rules in there.”

New Zealand has disclosure rules with several countries. If other countries don’t want us to disclose information on trusts affecting their nationals and companies that is their issue not ours.

Any risk to our reputation is one of perception, and that perception is not based on reality but the ridiculous claims New Zealand is a tax haven when it  isn’t.

100 Responses to A matter of trust

  1. Andrei says:

    More parochialism – far more interesting than the New Zealand connection, which is a minute part of the so called “Panama Papers” is who released these documents and why?

    George Soros has his finger in this pie as do various “NGO”s who are CIA fronts, witting or unwitting – we can go no further without entering conspiracy theory territory alas.

    In the scheme of things the only people who care about the “Kiwi Connection” are those on the loosing side in Kiwi politics

  2. pdm` says:

    Oh – so it is a US conspiracy Andrei?

    I don’t think so. More likely criminal hackers with access to fences like Nicky Hager who thrive on receiving and capitalising on stolen property doing what comes naturally to them.

    All I hope is that one day the evidence comes through and Hager and his mates finish where they should be – on the inside looking out between the prison bars!!

  3. Dave Kennedy says:

    “Any risk to our reputation is one of perception, and that perception is not based on reality but the ridiculous claims New Zealand is a tax haven when it isn’t.”

    Sadly the perception exists and most of the world see that their own definition of a tax haven fits us even if our Prime Minister sees otherwise.

    The majority of the trusts clearly exist to avoid tax, those managing the trusts openly advertise the fact, that was what Mossack Fonseca did with some enthusiasm. Our Government claimed it will share information if asked, but this is clearly a hollow claim when other Governments have no idea what exists here in the first place. What do they ask for?

    pdm, I do note that the facts and substance of what Nicky Hager writes is rarely questioned, just how he came across the information. Those who are involved in dodgy stuff obviously want to keep it hidden from the public and leaks are often the only way the truth will ever be revealed. What is very revealing after the publishing of any exposé like this and others is that the messenger is attacked to distract from the content. A democracy needs a free press and we almost lost ours:
    http://www.radionz.co.nz/news/national/299317/no-more-'rambo'-raids-hager

    The problem for John Key is his active support of allowing overseas trusts to be managed here when they obviously exist to avoid taxes from their home countries (hardly being a good global citizen). With Key’s personal lawyer involved with managing dodgy trusts and the conflict of interest involved in sending him to a junior Minister to lobby there is already enough to be concerned about. The Government was warned by IRD three years ago that the trusts could damage our reputation and the fact this was ignored

    When Key has been asked why would overseas trusts be set up in NZ if the intention wasn’t to avoid tax, his lack of coherent answer was telling.

    This has damaged our global reputation and only ever benefited a few lawyers, including his own.

  4. TraceyS says:

    Pet hate: Someone (anyone) telling me from the TV screen what my morals should be.

  5. Andrei says:

    Oh – so it is a US conspiracy Andrei?

    The (ICIJ) The International Consortium of Investigative Journalists is headquartered in Washington DC PDM and is funded by the usual suspects

    They produced this piece of expensive but crude propaganda – it smells mate

  6. Andrei says:

    This has damaged our global reputation and only ever benefited a few lawyers, including his own.

    Good heavens Dave Kennedy – get a grip, most of the people in the world could not locate New Zealand on a map let alone give a toss about our “Trust Laws”

    Do you really believe the people of Ulaanbaatar etc are avidly reading about this in their local rag and tsk tsking about New Zealand’s corruption?

    You sad, pathetic. clueless provincial, little man – this story is purely of local interest, with a minor Maltese connection

  7. Teletext says:

    I am positive that I read somewhere in the wash up of the Dirty Politics saga that our righteous Mr Hager has all his assets tied up in a trust. I wonder what country it is in?

  8. Dave Kennedy says:

    Teletext, evidence?

  9. Dave Kennedy says:

    Andrei, your abuse is misguided and doesn’t fit what what is actually informed understanding, not conspiracy theories. New Zealand is even listed in Wikipedia as one of the eight Pacific tax havens.

    I am sure the people you describe have never heard of New Zealand but I am sure many people in the world suffer in some way because of the activities our haven helps support.

    https://en.wikipedia.org/wiki/Tax_haven

    I would have thought you of all people would want to stop world suffering by introducing stronger controls over those who use their wealth to do evil stuff.

  10. Name Withheld says:

    I would have thought you of all people would want to stop world suffering by introducing stronger controls over those who use their wealth to do evil stuff.

    Sob Sob.

  11. Name Withheld says:

    You sad, pathetic. clueless provincial, little man

    Hear hear.
    Get over yourself.

  12. Andrei says:

    Dave Kennedy – you are being manipulated

    Over thirty years worth of records from a Panamanian company have been stolen 2000 GB worth of data!

    And some of this data has been selectively released, most of which is unintelligible to the likes of you and me and given the sheer volume of this data (even that which has been released) to make any sense out of it is beyond the abilities of you and I as well as the gushing journos who having orgasms over it.

    Whoever is really behind this has a motive but what that motive is unknown to me, and to you, but I’ll tell you for nothing that that motive whatever it is is not to make the world a better place for the poor and disposessed

  13. Teletext says:

    Dave Kennedy – use your obvious talents and resources to research Advisory Trustees 06 Ltd who own some secret trust which own properties.

  14. Mr E says:

    The same people showing great concern for our countries reputation are the same people who are making non-evidenced slurs in the the media.

    The true definition of dirty politics.

    Sometimes mud sticks most to the slinger.

  15. Dave Kennedy says:

    “Whoever is really behind this has a motive but what that motive is is unknown to me, and to you…”

    The motive Andre, is to expose the way the worlds wealthy and corrupt avoid tax and manage ill-gotten gains.

    Teletext: Oh dear, you are gullible, you think that because Hager may have a connection to a family trust he is implicated himself…good grief!

    It is now common for anyone who criticises the Government or Government policy in a prominent way to be personally attacked. Hager has exposed both Labour and National in his books and as an internationally regarded journalist, he tends to have his facts right. He rarely gets challenged about the accuracy the content of his work but he certainly has had his personal life investigated in some depth, had his home raided and his personal belongings confiscated and is under constant attack by the likes of Slater. Key tries to label Hager as a “left wing conspiracy theorist” but he never challenges the content of his work.

    “The same people showing great concern for our countries reputation are the same people who are making non-evidenced slurs in the the media.”

    That is a serious charge to make against the IRD, Mr E. When the department warned the Government in 2013 about New Zealand’s reputation regarding the existence of the foreign trusts and the levels of disclosure, I haven’t been aware of any slurs they have communicated in the media. Perhaps you can find the link?😉

  16. Dave Kennedy says:

    Mr E, perhaps you should also be warning the Editor of the Dom Post that he is making non-evidenced slurs…
    http://www.stuff.co.nz/business/industries/79801447/editorial-fiddling-as-we-lose-our-good-name-over-panama-papers

  17. Andrei says:

    The motive Andre, is to expose the way the worlds wealthy and corrupt avoid tax and manage ill-gotten gains.

    You poor naive fool Dave Kennedy – one of the people who have funded this is George Soros through the open Society Foundations, one of the most corrupt and devious individuals who inhabit the planet today

    The very same George Soros who “broke the Bank of England” and took the British taxpayer for $1 billion dollars which could have been better spent on well Education, health etc rather than inflating his already bloated Bank accounts, which you can be sure are held in “tax havens”

  18. Mr E says:

    Dave,

    Nice try at a twist.

    IRD we so concerned about the issue they stated the following:

    “This would result in increased administration costs for Inland Revenue and divert compliance resources away from the
    general business of collecting New Zealand tax.”

    “We will report to you on this matter, including whether keeping the existing tax treatment of foreign trusts is sustainable in the long term.”

    IRD never concluded that our rules were not sustainable or wrong. They posed a question. One they planned to follow up.

    Do you have the follow up Dave?

  19. JC says:

    I see that foreign trusts in NZ exploded from 2008.. particularly around 2010-13.

    What happened in 2008 and for some time after?

    Yep, half the world went broke and desperate Govts started looking at peoples’ bank accounts to freeze and then pick over in an attempt to remain solvent enough to avoid penalty interest rates and pay due loans from nations like Germany.

    If you were an ordinary but reasonably well off Italian, Greek, Spaniard, Frenchman, Cypriot etc you started looking for a safe place to put your money.. this wasn’t a tax they were looking to avoid but a wholesale theft of their assets to cover wholesale stupidity, graft and corruption at the Govt level and big banking level.

    If you were a reasonably well off honest South American then at any time you would be looking to protect your money from any number of corrupt and totalitarian Govts.. that isn’t tax avoidance but an effort to protect money made as honestly as can be made in such places.

    Even so NZ has not been idle at protecting its reputation as an honest broker.. it has taken appropriate action, from Whaleoil..

    “New Zealand has double tax treaties with forty countries. Clearly there is a willingness to exchange information with plenty of jurisdictions. We are also currently negotiating Double Tax Agreements with nine other countries (Austria, Belgium, China, India, Luxembourg, Netherlands, Norway, Portugal, United Kingdom). In other words we are extending our willingness to exchange information.

    New Zealand also has Tax Information Exchange Agreements (TIEAs) in force with:

    Cayman Islands
    Cook Islands
    Curaçao
    Gibraltar
    Guernsey
    Isle of Man

    Jersey
    Marshall Islands
    Netherlands Antilles
    Niue
    Sint Maarten

    And TIEAs that are signed, but not yet in force, with:

    Anguilla
    Bahamas
    Bermuda
    British Virgin Islands
    Dominica

    Saint Christopher and Nevis
    Saint Vincent and the Grenadines
    Turks and Caicos Islands
    Vanuatu

    And we are currently negotiating TIEAs with:

    Antigua and Barbuda
    Aruba
    Grenada
    Macao
    Monaco

    Montserrat
    Nauru
    St Lucia
    San Marino
    Seychelles

    Clearly and demonstrably we share information with other tax jurisdictions.”

    The PM has said we willingly share information with countries that ask for it pertaining to assets held here.. but I bet some South American nations and a few others around the world wont want to do that because it would expose a few human rights violations and corruption.

    Now, as to whether we should be double taxing foreign assets.. one of the things responsible govts around the world are doing is working up international agreements to *not* double tax because its manifestly unfair.

    One of the criticisms being leveled at NZ is we are not charging enough for foreigners who put money in here.. but why should we? the NZ entities who set these deals up are being paid for it and have to pay tax on the deal so its a win for us.
    If we charged extra for no service then ipso facto we would be implying some sort of special protection for foreign assets outside the ordinary.. that might indeed be dodgy.

    The fact is we run a clean operation approved by the OECD with both OECD and Govt promising to to continue working on and improving the operation.. this approval and promise well precedes the Panama affair.

    Longer term the area I think will get the most work will be on more disclosure of names of individuals who have their money here.. but its a fine line between need to know and privacy.

    JC

  20. TraceyS says:

    Mr E says: “The same people showing great concern for our countries reputation are the same people who are making non-evidenced slurs in the the media.”

    Dave says: “That is a serious charge to make against the IRD, Mr E…I haven’t been aware of any slurs they have communicated in the media.”

    I know you’re trying to be clever, Dave, but can you see how that failed?

  21. Mr E says:

    Dave,

    “perhaps you should also be warning the Editor of the Dom Post that he is making non-evidenced slurs”

    He is making non-evidenced slurs? Crickey Dave – that sounds damaging. I should read the article.

    A least you have picked a side. Nice to have you over here🙂

  22. Dave Kennedy says:

    Andrei, you need to read a little more about Soros, he has devoted his philanthropic energies in supporting open and honest capitalism and exposing corruption:

    “Between 1979 and 2015 Soros donated more than $11 billion to various philanthropic causes. He played a significant role in the peaceful transition from communism to capitalism in Eastern Europe (1984–89) and provided one of Europe’s largest higher education endowments to the Central European University in Budapest. Soros is also the chairman of the Open Society Foundations.”

    His funding of free press and independent media should be celebrated as all the other causes supported by the Foundation.

    1993-2014 expenditures included:
    $2.9 billion to defend human rights.
    $2.1 billion for education
    $1.6 billion on developing democracy in Eastern Europe and the former Soviet Union;
    $1.5 billion in the United States to promote reform in criminal justice, drug policy, palliative care, education, immigration, equal rights, and democratic governance
    $737 million for public health issues such as HIV and AIDS, TB, palliative care, harm reduction, and patients’ rights;
    $214 million to advance the rights of Roma communities in Europe;

    Expenditures in 2014 included:
    $277.3 million Rights and Justice
    $238.0 million Governance and Accountability
    $116.0 million Administration
    $91.7 million Education and Youth
    $60.0 million Health
    $43.8 million Media and Information
    https://en.wikipedia.org/wiki/Open_Society_Foundations

    Calling Soros corrupt and devious comes from rightwing groups such as the Heartland institute who have hated him for years for supporting left wing politics. https://www.heartland.org/policy-documents/george-soros-his-plan-defeat-george-bush-part-1

    Feel free to provide evidence of his corruption that isn’t part of a smear campaign.

    And you call me a naive fool😉

  23. Dave Kennedy says:

    Mr E, Tracey…sigh…and yet it was the IRD that first voiced concern and were shut down pretty quickly when it wanted to investigate.

    JC, you are an enthusiastic apologist. The only country we have good exchanges of information with is Australia (Key states this himself), all others can make requests but they have to know what to ask for (impossible). Our trusts have been promoted because they pay no tax and the owners can remain anonymous. There very well may be some honest people amongst them with no attempt to avoid tax or hide ill-gotten income but the opposite is still a likely scenario.

    We have dropped several places from our previous position as the least corrupt country in the world and now we even have it written into law that bribes are an acceptable business practice.

    http://www.stuff.co.nz/business/76317907/nzs-anticorruption-record-slipping-watchdog

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11456953

    How far we have fallen!

  24. JC says:

    “How far we have fallen!”

    According to the OECD and Global Forum on tax issues we’ve fallen up..

    http://www.keepeek.com/Digital-Asset-Management/oecd/taxation/global-forum-on-transparency-and-exchange-of-information-for-tax-purposes-peer-reviews-new-zealand-2013_9789264205864-en#page3

    This report shows we were compliant (the top rating) with some recommendations for further transparency. NZ agreed, said these were being enacted and when completed requested a further review to confirm the recommendations had been implemented satisfactorily.

    As Chris Trotter said this morning on the Great Disclosure.. “Meh”.. and thats about all there is to say.

    JC

  25. Will says:

    A touching tribute to George Soros (aka Dr Evil) Dave. Are you saying you have no qualms about how he acquired his billions? The smashed economies, wrecked lives?

    And yet you worry about New Zealand’s reputation.

  26. Dave Kennedy says:

    JC, yes, John Key, regularly uses that report as evidence that we are alright. Our domestic tax law is obviously robust but the operation of foreign trusts conveniently didn’t really feature.

    I think people are misguided if they were thinking the documents would connect Key to any of this other than supporting the existence of the trusts and the conflicts of interest involved with his lawyer. This was already known.

    All the documents have revealed is that New Zealand’s status as a tax haven is even greater than we previously thought and that the tax haven industry is a growing one here.

    What is most worrying for me is how this Government does business, a steady flow of money is what motivates it most and the ethical nature of the funds or trade is very much a secondary consideration.

    This Government that quietly encourages dodgy stuff to happen until it is exposed and then there is a scramble to first deny knowledge and then set up a sham investigation before pretending to do something.
    😉

  27. Dave Kennedy says:

    Will, my comment on Soros was related to why he is considered by some to be evil, this view mainly comes from right wing elements who do not approve of the causes he supports (independent press, social justice and improved democracy).

    His wealth was accumulated through market speculation and investment. I wouldn’t be surprised if something dodgy could be dragged up about some of those investments and he is currently buying shares in coal mines, which seems bizarre.

    The causes his philanthropy has supported have largely been positive and considering he made his fortune in much the same way as many other investors the “Dr Evil” tag is most likely to have come about because of his charities not his business.

    You have evidence otherwise?

  28. Will says:

    Bullshit, he makes money from disruption, creating and exploiting vulnerable situations. It’s his methods that earned him that tag, not his charities. It is not difficult to find out the things he has done if you want to, it would save me a lot of typing. Try to imagine how you would react if John Key operated like that little villain.

  29. Dave Kennedy says:

    Will, I would be grateful if you could provide the links that you used to support your claims. I found lots of links from the likes of Heartland Institute (right wing propaganda machine) and groups who are against supporting Syrian refugees (Soros has funded aid for thousands of them).

    It does appear that he is disliked by China for his support of democracy, hated by those who are reluctant to aid and accommodated refugees, disliked by those who are bigoted against the minority groups he supports and there is obviously some dismay from the right in the US because of his support of liberal politicians.

    He certainly gets right wing politicians, bigots and those who don’t like an independent press all frothy mouthed😉

  30. JC says:

    “What is most worrying for me is how this Government does business, a steady flow of money is what motivates it most and the ethical nature of the funds or trade is very much a secondary consideration.”

    I agree. Its appalling named crooks like Greenpeace International, Amnesty International and Mojo Mathews are dodging their responsibilities through the use of foreign trusts.

    JC

  31. Dave Kennedy says:

    You are truly sad, JC, when you deliberately confuse legitimate trusts with those that are set up to avoid tax and hide dodgy earnings. My wife is involved with a family trust, like Mojo’s (her surname is Mathers by the way) in the UK because that’s where her family is from. It supports a disabled brother and also pays tax on interest earned.

    It is very defamatory to accuse Mojo of dodging responsibilities, perhaps you can explain how? A totally ignorant and inappropriate attack.

    Double good grief!

  32. Name Withheld says:

    It is very defamatory to accuse Mojo of dodging responsibilities, perhaps you can explain how? A totally ignorant and inappropriate attack.

    Oh really?
    Ring any bells?

    The majority of the trusts clearly exist to avoid tax,

    The problem for John Key is his active support of allowing overseas trusts to be managed here when they obviously exist to avoid taxes

    With Key’s personal lawyer involved with managing dodgy trusts

    and only ever benefited a few lawyers, including his own.

    So its only defamatory when others do it?
    You are a sad, pathetic. clueless provincial, little man who has been played like a fiddle out of tune accordion.

  33. Dave Kennedy says:

    NW, I was referring to New Zealand’s foreign trust industry (what this thread is actually about) not the multitude of trusts that exists here, or in the UK, that have full disclosure and pay tax. Mojo’s trust is not really a foreign trust as such as it exists in the country where the money originated and her family are from.

    Your abuse and accusations are unnecessary and grossly ignorant.

  34. Will says:

    It may be helpful if you produce a comprehensive list of publications that are off-limits before demanding links Dave. Save us both time.

  35. Dave Kennedy says:

    “It may be helpful if you produce a comprehensive list of publications that are off-limits before demanding links Dave”
    Not off limits, Will, just providing context. You are more than welcome to provide the links if that is all you have. If it is those links you were using then you clearly have a credibility problem if you are using the opinions of racists, bigots and the extremely dodgy Heartland Institute.

    Any lack of response on your part will obviously be telling😉

  36. JC says:

    “Double good grief!”

    Triple good grief actually. I see a major Green Party donor there as well.. Forbes Ellworthy.

    So far the major takeaway from the Panama Papers NZ section is that Greens are donkey deep in shonky foreign trusts designed to evade tax responsibilities and hide illgotten gains.

    As Bryce Edwards said all those years ago.. the NZ Green Party has the most “opaque” funding activity of all the parties.

    JC

  37. homepaddock says:

    JC I take it that last comment is satirical. The takeaway from the papers so far, at least in New Zealand and for New Zealanders, is that no-one has done anything illegal and there has been no evidence of tax evasion by New Zealanders.

    There are legitimate reasons for setting up trusts, even the Greens admit that in not backing Andrew Little’s plan to ban all foreign trusts. See: http://www.kiwiblog.co.nz/2016/05/poor_little.html

  38. Mr E says:

    We are back to this same place.

    The opposition make a nonsensical stand, and it makes them look silly.

    Wouldn’t it be great to have a credible opposition….

  39. Paranormal says:

    You are truly sad, DK, when you deliberately confuse legitimate trusts and smear them as if they were set up to avoid tax and hide dodgy earnings. There FIFY.

    There is no evidence of murky dealings but you on the left are first to smear. Lets start with a bit of education to assist your complete lack of financial knowledge.

    There are quite a few wealth/investment managers based in New Zealand that are recognised globally. They manage international clients funds, making investments on the global market. These managers are based in New Zealand for two reasons:
    – Firstly because this is where they want to live and bring up their families
    – Secondly because New Zealand is recognised as a well recognised strong jurisdiction where the rule of law applies and there is little or no corruption it provides the level of certainty investors require.

    I look after a number of these firms liability insurances. They get support from the insurance market because of their adherence to the AML/CFT regulations – both local and international.

    Interestingly, to manage these offshore individuals funds, to ensure the funds are protected, there is a legal requirement for the funds to be lodged in a New Zealand based trust.

    More proof that your beat ups are really just politically motivated smear attacks.

  40. JC says:

    “JC I take it that last comment is satirical.”

    It is in fact part of quote from Bryce’s “A Critique Of The Greens Political Finance Disclosure”.

    http://liberation.typepad.com/liberation/2009/06/a-critique-of-the-greens-political-finance-disclosure.html

    “Yet although they have often demanded somewhat draconian transparency when it comes to the private finances of other parties, when it comes to their own sources of public finance – particularly their reliance on backdoor parliamentary state funding – the Greens prefer opaqueness and obfuscation. It should not be surprising therefore that the Green Party response to increasing public concern about the use by politicians of taxpayer resources and expenses has been worse than useless. Rather than helping ‘open the books’ as the party promised, the Greens have disingenuously attempted to limit public knowledge of MP expenses and parliamentary budgets.”

    My original point of course was that using the same techniques and insinuations as DK I could legitimately claim that Greenpeace etc were crooks because they appeared in the papers.

    There is another point to make.. as a result of these public disclosures many people in unstable parts of the world will now be at risk of terrorism, kidnapping, extortion and problems with their corrupt governments, ie, exposed to the very threats they sort to avoid with the use of foreign trusts.

    Its a moot point whether wholesale disclosure justifies this risk.

    JC

  41. Dave Kennedy says:

    Thanks, Ele, it is always best to debate the facts rather than making wild, libelous accusations.

  42. Name Withheld says:

    it is always best to debate the facts rather than making wild, libelous accusations.

    Your total inability to recognize irony has been discussed before Mr Kennedy, and causes endless amusement among all intelligent thinkers.

    With Key’s personal lawyer involved with managing dodgy trusts

    I look forward to watching you argue in court that that “wild accusation”, is not libelous
    Sad sad sad.

  43. homepaddock says:

    JC – it was your middle two paragraphs, not Bryce’s comment I was referring to.

  44. Dave Kennedy says:

    Paranormal, As Ele also states, the Green Party has never said that all foreign trusts are not legitimate and even John Key is agreeing that greater disclosure is probably necessary. The fact that our Ministers or the IRD cannot guarantee the legitimacy of all the funds is concerning in itself. There is a global perception that we are aiding criminals and tax evasion and this is not good for our reputation.

    If all the funds are above board and the money shifted here is legal, then that would be reassuring. However that guarantee can’t be given because of the limited disclosure and the dodgy perception remains while local and international trust managers still promote us as a secure “tax haven”.

    JC, I agree with you that that greater transparency is useful and this should occur across the board. The article you refer to was published 7 years ago (you have been busy with your research) and political party spending and transparency has been an issue well before then. Most parties are guilty of not following the letter of the law in the past and the Green Party needed to shoulder some responsibility too:
    https://en.wikipedia.org/wiki/2005_New_Zealand_election_funding_controversy

    Interestingly all the current public disclosure of MP spending is largely due to the Greens and we still remain one of the most transparent regarding our spending and financial management.

  45. Dave Kennedy says:

    NW:
    “I look forward to watching you argue in court that that “wild accusation”, is not libelous”

    Interestingly the information to support my accusation did come from the courts. I guess it depends if you consider the description of trust as “dodgy” as similar to “sham” as the High Court called it, or “not morally white” as Mr Whitney described the trust himself.

    “John Key’s lawyer, Ken Whitney, was criticised by the High Court after creating a sham trust for a bankrupt property developer then failing to disclose it to authorities probing his client’s insolvency.”

    “When asked during cross-examination if he had concerns around setting up structures to allow a bankrupt to continue in business, Mr Whitney told the court: “No, not particularly. It’s a common thing for people to do. It may not be morally as white as it could be but it’s normal practice.” ”

    “Wild accusation” I think not. You will possibly understand the added irony of this discussion.😉

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11633406

    It is also interesting that John Key is now distancing himself from Whitney and is now calling him his “former lawyer”.

  46. JC says:

    HP,

    Ah, I see. All these people/organisations plus Red Cross are named and using DK’s normal MO of slander without evidence or proof I drew an adverse conclusion.

    Reasonable people might have a different view because they don’t have DKs Godlike (and selective) powers for sniffing evil.

    JC

  47. Name Withheld says:

    If that’s the best you can do, Mr Kennedy, they will be coming for your wallet I think.
    Sad sad sad.

  48. Dave Kennedy says:

    NW, you are right I couldn’t do much better than the High Court, perhaps you can recommend a higher authority i could use😉

    JC, it doesn’t take much to read widely use evidence for arguments and not to trustingly repeat spin and propaganda, try it sometime, you may be surprised where it takes you😉

  49. Mr E says:

    Over the years, I have been involved with many lawyers for many reasons.

    Do I feel responsible for their conduct? No.
    Should I? I don’t think so.

    Do the Greens think I should be? Sounds like it.

    Much of this Whitney discussion is irrelevant. As it seems, is the Mojo, Greenpeace, …… conversation.

    It seems Mojo and Greenpeace have been raised to prove that point, and the Left can’t see it.

    We are back into this place where the Left are distracted by much ado about nothing. And it takes the focus away from sensible political gains.

  50. Name Withheld says:

    JC, it doesn’t take much to read widely use evidence for arguments and not to trustingly repeat spin and propaganda, try it sometime, you may be surprised where it takes you

    You should offer this advice to your new leader, little Jimmy Shaw, and see where it “takes him”
    He sure could need some help after his pathetic and hapless efforts in the House yesterday.

    Key had the legitimate complaint that Shaw had smeared Key and the whole country by repeating the anonymous, false assertion that NZ/Key controlled a corrupt tax system in the Cook Islands. Shaw’s only possible excuse is that he looks too stupid to know any better.
    Mojo Mather’s is a beneficiary to a foreign trust – that is a statement of fact, but in looney left stiyle white is black and the UK is not a foreign country.
    Of course the media are making a huge song and dance over this in yet another attempt to besmirch John Key. What they are not telling the public is the full context of what JK was saying and how utterly stupid he made Shaw look. No surprises there.
    JS was getting roasted, either he actually is an idiot, hipocrate, or someone else wrote those questions.
    It could have been staged to distance the PM from the utter stupidity of Shaw.
    Why would he want to stay in the house if the Shaw couldn’t/ wouldn’t accept his answer that Greenpeace are mentioned in the Papers when they patently are.
    neither Little nor Shaw landed a glove on him yesterday, and they’re reduced to arguing semantics because there’s nothing of substance in the Panama Papers,

    Stupidity and the green party. A natural mix.

  51. Dave Kennedy says:

    Mr E, try joining the dots through a rough timeline, they are well documented and can’t be challenged factually:

    -The PM talks openly about New Zealand becoming a financial hub in the Pacific like Switzerland.
    -Tax changes brought in in 2011 makes New Zealand more attractive to foreign trusts wishes to avoid tax according to Chapman Tripp
    “Foreign investors in a New Zealand fund with only foreign investments will now bear no New Zealand tax on their income, whether or not the fund distributes that income. The tax change, which came into force in September 2011, should make New Zealand managed funds an attractive alternative to funds resident in Luxembourg, Ireland or the Caymans.”
    http://www.chapmantripp.com/publications/Pages/New-Zealand-now-an-attractive-tax-location.aspx
    -The IRD warns the Government that the way New Zealand manages foreign trusts could damage our reputation (2013).
    -The PMs lawyer approaches him regarding his concern that the IRD may tighten regulations around foreign trusts.
    -The PM passes Mr Whitney to a junior Minister with the understanding (that the PM denies) that he was assured that there would be no further progress on limiting the activities of the trusts.
    -The decision is made to remove scrutiny of foreign trusts from the IRD work plan with the excuse that the trusts didn’t bring in much tax income, so they weren’t a priority.
    -The Panama files reveal that New Zealand is being promoted internationally as a tax haven and using our past good reputation as a drawcard.
    -The number of Foreign Trusts managed in New Zealand has more than trebled under National (around 3,300 in 2008 to almost 11,000 today). The fact that local trust managers earned at least $24 million last year means that the funds being managed are likely to be in the tens of billions.
    -It is revealed that the only country where we have active disclosure of trusts is Australia, all other countries are required to request information, but neither they nor the IRD have the information required to make a request or provide the answer.

    Whitney is not a distraction, he is an example of the influence of Key’s personal lawyer in gaining an assurance that his foreign trust business will be protected from more regulatory controls. The same man also actively protected the assets of a bankrupt through a trust so that he could continue trading even though he admitted it wasn’t ethical. He is clearly in the business of making money with no moral compass and openly supports individuals and businesses using foreign trusts to avoid tax. Key recently started referring to Whitney as his “former” lawyer to distance himself from what is being revealed.

    Mojo and Greenpeace are Key’s desperate attempts to create a distraction. The Green Party has never said that all trusts are bad, Ele has stated this too, this is Key’s disingenuous representation. Mojo’s trust isn’t even a foreign trust as Key claims (he is deliberately lying when implying this, hence the request for an apology) as it is simply a UK based family trust where many of Mojo’s family still reside.

    Key knows he is in a desperate position and he is skilled at using angry attacks to create a diversion. He refers to Angry Andy, but a Little rant is nothing like a Key rant as seen when we embarrassingly saw our PM kicked out of the House for behaviour unbecoming for a Prime Minister.

    This is not “much ado about nothing” it is further proof of unethical and corrupt behaviour that continues to damage New Zealand’s international reputation. I think Chris Slane’s cartoon in the latest Listener is spot on.

    “Do I feel responsible for their conduct? No.
    Should I? I don’t think so.”

    Mr E, for someone who has passionately stood up for New Zealand’s international reputation in the past you seem surprisingly passive about this situation.

  52. Dave Kennedy says:

    NW, of course Key has no final responsibility for the Cook Islands tax arrangements but his Government has provided the advice and support for their current tax systems, he admits this himself:

    “He said New Zealand has supported and advised the Cook Islands on best practice tax policy, but the government there ultimately made its own decisions.”

    His Government clearly advised the Cook Island how to manage a tax haven and the Cook Island Government has to face the consequences of following that bad advice.

    You are such a sucker for spin.

  53. Mr E says:

    Dave,

    “can’t be challenged factually” – Wow

    Lets start with this:

    “-The IRD warns the Government that the way New Zealand manages foreign trusts could damage our reputation”

    I don’t think that is factual. NZ doest manage foreign trusts. Here is what IRD actually said:

    “To protect our international reputation, it may be necessary to strengthen our regulatory framework for disclosure and record-keeping. This would result in increased administration costs for Inland Revenue and divert compliance resources away from the general business of collecting New Zealand tax. This, in turn, raises the question of whether our foreign trust rules are sustainable. We will report to you on this matter, including whether keeping the existing tax treatment of foreign trusts is sustainable in the long term.”

    You think go on to say

    “-The decision is made to remove scrutiny of foreign trusts from the IRD work plan with the excuse that the trusts didn’t bring in much tax income, so they weren’t a priority”

    Let me repeat from the 2013 report – what you call a warning –

    ” We will report to you on this matter, including whether keeping the existing tax treatment of foreign trusts is sustainable in the long term.”

    Dave – Join the dots – Paaaalease!

    Did you read the link from Chapman and Tripp?
    Imagine you want to invest in Chinese solar panels. You use your income – which you paid income tax on – and send it over to China, when they get it – it gets taxed again, so you investment is only 2/3rds what you thought it would be. Sound attractive to you? Sound fair?

    We need and want foreign investment. And it is not fair or sensible if we tax it like income when it gets here.

    Then I am reminded that you say ‘fact that cant be challenged’ – and mid way through the ‘fact’ you point out is has been challenged.

    “The PM passes Mr Whitney to a junior Minister with the understanding (that the PM denies) that he was assured that there would be no further progress on limiting the activities of the trusts.”

    Honestly Dave… Challenged.

    “Mr E, for someone who has passionately stood up for New Zealand’s international reputation in the past you seem surprisingly passive about this situation.”

    It comes down to resourcing Dave,

    Could IRD change rules to ensure more transparency, and burn resoruces on the issue? Perhaps.

    But lets have a look at objectively – there has been no evidence of tax evasion by NZers. And I am still to here of any wrong doing or dirty deals by foreigners. There are some links in papers. But no evidence of wrong doing.

    Where could IRD put their efforts?

    Welfare fraud crack downs can return $45M
    Tax evasion crack downs can return $200M

    You can huff and puff about foreign trusts, but putting efforts in that direction seems a bad waste of IRD resources. Clearly they are better spent on Welfare fraud and Tax evasion.

  54. Dave Kennedy says:

    “To put it in sporting terms, our PM’s State of Origin is Merrill Lynch. That’s the monastery where he learnt his kung-fu. That’s his compass, those are his values.”

    “Before he was PM, in a 2005 Herald interview he touted the opportunities for New Zealand if only we’d become “the Jersey of the South Pacific”. He offered the example of Ireland, offering a 10 per cent tax to foreign investors, as advised by Merrill Lynch. The restaurants we’d have, for all the star bankers!”

    “Three years later, both Ireland and Merrill Lynch needed bailing out.”

    Raybon Kan

    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11637631

    To add to my earlier comments, it is clear that our Prime Minister was bent on making New Zealand a tax haven back in 2005 and he has been clearly supportive of the idea of tax free foreign trusts since (his own Lawyer has made a career in managing them).

    Foreign trusts are mostly used to hide financial activities and avoiding paying tax in home countries. As the IRD pointed out in 2013 New Zealand’s status as a good global citizen can not be supported if we operate as a tax haven, which we clearly do for all intents and purposes.

  55. Dave Kennedy says:

    Mr E, I can’t believe you supported my argument. The IRD clearly said that to protect our international reputation we needed to have stronger regulations around disclosure and record keeping and that the continued support of tax free foreign trusts is not sustainable. How is this not a warning about potential damage to our international reputation if we don’t get tougher regulations?

    The Government then stopped the IRD from doing any more work on this and there has been no further report on the matter.

    Your other comments clearly show your lack of appreciation of global perceptions.

    By the way, your estimate on the potential earnings through dealing with tax evasion are a little light. IRD and the courts already recovered $2 billion from the Australian banks tax evasion here and one 2011 estimate of tax fraud was $7.4 billion. It is most likely to be around $10 billion now. Our DHB would be grateful to get some of that money and perhaps we could even get decent meals again in our local hospital. Tax fraud hurts us all and supporting tax free foreign trusts with weak disclosure regulations here effectively supports huge losses to the tax takes of other countries too.

    “Clearly they are better spent on Welfare fraud and Tax evasion.”

    Chuckle, if our foreign trusts contribute to tax evasion in other countries surely we should be responsible in dealing with that too. We can hardly expect the support of other countries when New Zealanders themselves are hiding money elsewhere and we expect to be informed. It should go both ways.

    And to think that more beneficiary bashing will add great sums to our coffers is just delusional. You do realise that over-payments due to mistakes by welfare agencies are also called fraud, even if the recipient had no intention to do so. The amounts involved in benefit fraud are nothing compared to white collar crime and the unintended consequences of tough beneficiary regulations cause unnecessary suffering to people who deserve better support:
    http://www.catrionamaclennan.co.nz/blog/stop-sending-beneficiary-mums-to-jail-our-double-standard-on-debt/

  56. Mr E says:

    Dave,

    ” The IRD clearly said that to protect our international reputation we needed to have stronger regulations around disclosure and record keeping ”

    They didn’t say we needed anything. They said we would look into issue. They then said it was not worth pursuing. Have you been asleep?

    ” if our foreign trusts contribute to tax evasion in other countries ”

    That is a big if – and if the answer is yes – to what extent? $1000 – $10,000, $100,000 …. Where is it? For all this song and dance the Left are making you must have a figure?

    IRD have decided it is not worth pursuing.

    Greens are back to spending millions for little in return.

    “And to think that more beneficiary bashing will add great sums to our coffers is just delusional.”

    What I call welfare fraud you call beneficiary bashing? We really do have different moral standards

  57. Dave Kennedy says:

    Yes Mr E we do have different moral standards. You encourage even more scrutiny of beneficiaries for a paltry rate of return.

    The vast majority of beneficiaries are honest and deserve support and yet in an effort to capture a small number, for often paltry sums, the levels of compliance becomes harder and their levels of stress increased. For many “beneficiary bashing” is the reality as there is a culture of beneficiaries having to prove their innocence rather than agencies proving their guilt (as you would have seen from my earlier link). Many do not have the understanding or resources to defend themselves.

    Here is the reality according to the Ministry of Social Development:
    “The vast majority of people declare their true circumstances and comply with their obligations by reporting changes in circumstances. However, a relatively small number of people commit welfare fraud by deliberately misrepresenting their circumstances or failing in their obligation to inform MSD of changes in their circumstances in order to get money to which they are not entitled. There is a difference between fraud, and overpayments that occur because of the way the
    system works or because of genuine mistakes (and yet overpayments are often referred to as fraud in statistics).”

    In 2012 there were around 350,000 benefits paid, 10,735 cases were investigated but only 714 were successfully prosecuted. For every 3,500 benefits 7 were found to have committed a fraud. The 3,493 others are now often subjected to intolerable situations to access justified support. This 2013 story is a common one for many, it is definitely a form of beneficiary bashing if you want to tighten compliance further:
    http://www.stuff.co.nz/national/politics/9356093/Mums-WINZ-battle-over-Down-son

    All this to recover amounts in the thousands at best, while tax fraudsters often owe millions and a potential total of $10 billion being fraudulently gained.

    I know where my focus would be and what my moral compass tells me.

  58. Mr E says:

    Umm Dave….
    I didn’t suggest increased scrutiny.

    You are ranting for no reason.

  59. Dave Kennedy says:

    “but putting efforts in that direction seems a bad waste of IRD resources. Clearly they are better spent on Welfare fraud and Tax evasion.”

    Chuckle, I would really love to know how one exposes more welfare fraud without increased scrutiny…

    You would have seen these responses to the questions from Julie Anne Genter today. This Government is in serious denial over foreign trusts and it is truly painful to hear the answers:
    http://www.inthehouse.co.nz/video/43184

    The IRD has already pointed out that greater disclosures are necessary and Michael Woodhouse’s answers, and obvious discomfort, comes out of the Government’s determination to protect the foreign trust industry.

    The actual owner and the intent and the purposes of the trust should be known when they are first set up and for the IRD currently having to ask those questions after the fact is a nonsense and they will only seek that information if foreign governments request it (and they have no idea what to ask for).

    Note this exchange, the answer must be one of the most ridiculous I have heard…
    Genter: “Would greater disclosure requirements in our foreign trust regime reduce the potential use of foreign trusts for tax evasion and money laundering?”

    Woodhouse: “The question is a hypothetical one and it is not possible to predict what such action would have…”

    Good grief!

    Here are the current disclosure requirements as promoted by a foreign trust manager:

    the following benefits are retained:

    No taxes are paid in New Zealand
    No tax reporting is required in New Zealand
    No disclosure is made of the existence of the trust
    No disclosure of your involvement
    No registration or filing of the trust is required in New Zealand
    A privately owned and controlled company may act as trustee

    http://designertrust.com/newzealand.htm

    The move from “no disclosure” to some disclosure will clearly discourage abuse. Nothing hypothetical about it.

  60. Mr E says:

    “Chuckle, I would really love to know how one exposes more welfare fraud without increased scrutiny”

    More?

    Can you see where you are failing?

  61. Paranormal says:

    Compare and Contrast DK:

    “the Green Party has never said that all foreign trusts are not legitimate”

    “Foreign trusts are mostly used to hide financial activities and avoiding paying tax in home countries.”

    You’re at it again.

  62. Dave Kennedy says:

    Paranormal, the word “mostly” is key. If I had said “all”, you would have an argument😉

  63. Mr E says:

    Dave,

    “Paranormal, the word “mostly” is key. If I had said “all”, you would have an argument😉”

    Funny you say that – after your rant about “more” which I didn’t say.

  64. Dave Kennedy says:

    Mr E you will need to explain your interpretation, you operate in a different world from mine. If you think that the current efforts at identifying and recovering fraudulent welfare payments are satisfactory then what were you suggesting we put extra resourcing into?

    I think you are just playing one of you little semantic games to divert attention from the main thread again😉

    You are so predictable.

  65. Paranormal says:

    So its not only Morris dancing lessons they give at Green conferences?

  66. Dave Kennedy says:

    It is good to recognise positive shifts in thinking and as I have complimented Fonterra for finally seeing the value of organics, Judith Collins has admitted we need to be more proactive in identify fraudulent activity.

    “The world has changed. And it has particularly changed around big money, around terrorism, around drug dealing, around major corruption, and it’s the sort of area we always needs to be looking at changing, and I think it’s something we should be looking at,” Collins said.

    We just need the Government to actually do something now.

  67. Mr E says:

    Some days it is like talking to a child. One from a ‘different world’.

    Where did I talk about “extra resourcing”?

  68. Paranormal says:

    DK, are you really not aware of the new AML / CFT legislation and new regulations that literally affects every New Zealander, or are you really just a tribal Green with no wider understanding of the world the rest of us live in?

  69. Dave Kennedy says:

    “…but putting efforts in that direction seems a bad waste of IRD resources. Clearly they are better spent on Welfare fraud and Tax evasion.”

    Mr E my apologies if I misinterpreted your view that the money intended for IRD resources should be spent on welfare fraud. I thought that it implied that more funding for that area would be beneficial. I will accept your word that you didn’t mean that and that you don’t believe beneficiaries need closer scrutiny (this is a distraction from the main thread anyway).

    Paranormal, I am happy to learn more regarding how the Anti Money Laundering and Countering Financing of Terrorism legislation directly impacts on the current management of foreign trusts, enlighten me😉

  70. Mr E says:

    Dave,

    My point was and still is – the resourcing of IRD is required on issues that are rather large.

    IRD have stated concern that resourcing foreign trusts investigations will take away from their core activities.

    It is now part of a wider review by the IRD.

    I understand some people are despertate to score political points. But the IRD is looking into the issue to see if it is an opportunity.

    To clang an bang around with little information to go on is fool hardy in my opinion.

    My advice to Lefties – wait for the IRD review to be completed. Then you will have some information to make judgements.

  71. Dave Kennedy says:

    Mr E, you obviously didn’t understand that the initial 2013 advice regarding foreign trusts, here are the IRDs own words from that report:
    “Our foreign trust rules continue to attract criticism, including claims that New Zealand is now a tax haven in respect of trusts. This is largely because the mismatch between our rules and those of other countries may result in income not being taxed either in New Zealand or offshore. To protect our international reputation,
    it may be necessary to strengthen our regulatory framework for disclosure and record-keeping. This would result in increased administration costs for Inland Revenue and divert compliance resources away from the general business of collecting New Zealand tax. This, in turn, raises the question of whether our foreign trust
    rules are sustainable.”
    https://taxpolicy.ird.govt.nz/sites/default/files/2013-other-taxation-multinationals.pdf

    The IRD recommended a review of our foreign trust regulations because of the potential for abuse and damage to our international reputation and yet this review was quickly discouraged.

    The Government has lied about the reasons the review was shelved, by implying a review of the regulations was a distraction from core business. What the IRD had actually suggested was that to resource proper monitoring of the Foreign Trusts would divert resources from more productive areas and suggested that the justification for having foreign trusts at all needed to be reviewed.

    The Shewan inquiry is a sham because it will not look at the wider issues of the actual value that foreign trust industry provides to NZ, but just the regulations around disclosure.

    This is not about scoring minor political points but sharing IRDs very real concerns and maintaining our reputation and good relationships with other tax regimes. The IRD is correct in questioning why we should allow foreign trust industry to exist in NZ at all.

  72. Mr E says:

    This is what IRD said (that you left out):

    “This would result in increased administration costs for Inland Revenue and divert compliance resources away from the general business of collecting New Zealand tax. This, in turn, raises the question of whether our foreign trust rules are sustainable. We will report to you on this matter, including whether keeping the existing tax treatment of foreign trusts is sustainable in the long term.”

    The IRD were then considering a review in 2014, including foreign trust information disclosure, but they were too busy to complete it and the matter was considered to be less important than other matters. Both the IRD and the minister agreed on that.

    At this point you claim a conspiracy – based on some dots that you have joined. If you really believed this conspiracy to be true why don’t you OIO any documentation relating to it?

    Now that we have the Panama papers we can see they were all correct. Of the ‘500,000 entities and organisations Mossack Fonseca had a link to, fewer than 200 were trusts with any link to New Zealand. All of those were disclosed.’ That means ‘they were subject to information sharing requests from other countries and Inland Revenue.’

  73. Paranormal says:

    DK wants to be enlightened on AML & CFT legislation. Thats why he thinks the Government “should do something” (TM) without realising they’ve been “doing something” (TM) for quite some time.

    If you have no idea about AML / CFT legislation then I suggest you should “read widely [and] use evidence for arguments and not to trustingly repeat spin and propaganda”.

  74. Dave Kennedy says:

    “The IRD were then considering a review in 2014, including foreign trust information disclosure, but they were too busy to complete it and the matter was considered to be less important than other matters. Both the IRD and the minister agreed on that.”
    Mr E, look at my earlier timeline, it is clear that lobbying from Key’s lawyer and the trust managers were influential in stopping that review. Your earnest trust that what the PM says must be true is just politicly naive.

    “…based on some dots that you have joined. If you really believed this conspiracy to be true why don’t you OIO any documentation relating to it?”

    Chuckle, it’s been done Mr E and you will note the enthusiastic blacking out of much of the useful contents.

    Please read:
    https://www.greens.org.nz/sites/default/files/Foreign%20trust%20OIA.pdf

    “…fewer than 200 were trusts with any link to New Zealand. All of those were disclosed.’ That means ‘they were subject to information sharing requests from other countries and Inland Revenue.’ ”

    You do realise that the Panama papers just reflects one part of the industry and that “disclosure” doesn’t mean full disclosure. The New Zealand manager can be listed as the principle trustee and the actual owner of the funds can be unknown under the current disclosure system. I have gone over this several time…if other countries have no knowledge of the trust and the IRD has no record of the actual owner of the funds, information sharing becomes limited. You have obviously not understood any of the trust manager promotions that I linked to nor the IRD concerns.

    Why are you so doggedly supportive of maintaining a tax free trust regime against all the evidence when they are clearly lacking in proper disclosures and is doing damage to our international reputation?

  75. Dave Kennedy says:

    “If you have no idea about AML / CFT legislation then I suggest you should “read widely [and] use evidence for arguments and not to trustingly repeat spin and propaganda”.”

    Paranormal, this legislation has had no direct effect on our foreign trust regulations and oversight as far as I’m concerned. However I am open to be educated on this if you can prove me wrong (and I provided this opportunity for you). Your response was very telling…you clearly don’t have a clue what you’re talking about😉

  76. Name Withheld says:

    I suggest you should “read widely [and] use evidence for arguments and not to trustingly repeat spin and propaganda”.”

    Darn, Paranormal, he’s missed it again!

    You’re really not very good at this are you, Mr Kennedy.
    Not the sharpest knife in the drawer so to speak.

  77. Dave Kennedy says:

    NW, if that comment is the best contribution you can make to this thread I will probably need to lend you my knife sharpener. Do you have any original thoughts or actual contributions that are informative?

    I am just waiting with interest for Paranormal’s summary of how the legislation he described has increased the disclosure levels for foreign trusts and the silence is deafening. Perhaps you could help him? 😉

  78. Paranormal says:

    DK, you really don’t know what you are talking about. The more you carry on, the clearer it becomes.

    However here’s a hint – have a read of the State radio interview with a trust fund lawyer. Lets see if you can pick the really important thing the AML and CFT legislation does from this interview… http://www.radionz.co.nz/news/panama-papers/303358/mossack-fonseca-nz's-registered-office-responds

    Although I don’t hold out any hope, you’re really just too tribal Green to want to understand it.

  79. Dave Kennedy says:

    “Lets see if you can pick the really important thing the AML and CFT legislation does from this interview…”
    Paranormal, I read the interview with an industry insider and am still no clearer about what you mean. You do realize that you just have to say it yourself in your own words to show you actually understand what you are talking about. Continually throwing it back into my court and expecting me to somehow read you mind is nonsense.

    There was no mention of your Act in the whole piece and much of what Roger Thompson said was spin and is contradicted in the promotional material being sent out by other trust managers.

    What the hell is tribal about my views, they are basically the same as the IRD. I am not anti-trust, I just want to have greater disclosure and agree with the IRD that the tax free foreign trust industry here adds little value to our economy, are costly to monitor in relation to what they earn for us , are giving us a bad reputation globally and they are probably not sustainable to continue with.

    You are the tribal one through being an eager little lacky for the foreign trust industry (and you don’t even realise it).

  80. Mr E says:

    Dave,
    That OIA is perfect. Thanks. Have you read it?

    The IRD estimate there could be 8000 foreign trusts (with NZ trustees) and a potential of $3m tax that could be collected.

    That is an average of $375 each.

    You want the IRD to run around the world chasing $3M. Spending big bucks to get it. Writing new laws and shifting resources to do that.

    Resources that can return hundreds of millions in local tax evasion.

    You are right our reputation is at risk. We could gain a reputation for having stupid opposition parties.

    Can we legislate against that?

  81. Dave Kennedy says:

    Mr E, you haven’t actually been reading what i have been saying, we are actually in agreement. There is no value in having tax free foreign trusts here. I totally agree with the IRD, the trusts existence damages our international reputation and they bring very little income to Government coffers, that is why it suggested that their existence isn’t sustainable.

    Or are you actually arguing the same as Key that trust managers here earned $24 million from them and we should continue to allow them to exist with little scrutiny? That is what his ex lawyer mate Whitney wanted and why they stopped the IRD looking closer at the issue.

    Either the trusts continue, but with much greater disclosure and the IRD closely monitoring them (which isn’t cost effective)…or we get rid of them altogether so that we can’t be accused of supporting tax evasion.

    The opposition parties are spot on in agreeing with the IRD, tax free foreign trusts operating from NZ aren’t sustainable.

    I’m not sure who you think you are supporting and what interests you’re serving as you appear to be trying to argue against me by making the same points…bizarre.

  82. Dave Kennedy says:

    Also some of the foreign trusts may indeed be legitimate (I have never said that they are all bad) but if they lack robust disclosure and the IRD can’t really afford the time to monitor them, they are open to abuse. We can’t be good global citizens if we allow tax free trusts to exist with little scrutiny.

  83. jabba says:

    sorry but I missed lots of news over the past couple of days. Can someone tell me if anyone has been charged with breaking the law yet?
    From memory, the papers have named an old dead guy from Sth Canterbury, Elvis, Greenpeace and some charities. I’m sure Hager has more to revel?

  84. Paranormal says:

    At the risk of asking the obvious, DK why do you think a trust lawyer has to positively identify their client, including using third party information, confirm the validity of the trust purpose, and the source of the funds? Another starter for ten, their livelihood depends on it. Let’s see if you can work it out from there.

    Sadly DK you’ve just proven yet again you are completely ignorant tribal Green, and shown again why it is a waste of time trying to engage with you. If you don’t know about the AML and CFT legislation, I suggest you should “read widely [and] use evidence for arguments and not trustingly repeat spin and propaganda”.

    It’s tedious that unless someone agrees totally with your dogma they must be spinning something.

  85. Dave Kennedy says:

    Jabba, you need more accurate sources of information – spin, rumours and scuttlebutt are unreliable😉

    Paranormal, I’m sure most trust managers are working within the law, however the law is so loose that they can have a high level of separation from the real owners of the funds they manage, and the purposes. You only have to look at the way trust managers advertise their services. If you are arguing against me you must also be arguing against the IRD because it is their concerns that i have been reflecting (and the ones that Mr E has misunderstood and Key and Woodhouse are deliberately misrepresenting).

    Remember too that Key’s ex-lawyer ended up in court for setting up a sham trust (the judge’s words) to protect the assets of a bankrupt and to enable him to continue trading. This wasn’t ethical or moral but was still legal.

    Our foreign trusts are legal under our loose disclosure regime but they too are unethical and open to abuse.

    Also personal abuse alone doesn’t win an argument, the fact that you won’t explain the AML and CFT legislation’s impact on trust disclosure to prove your understanding is a clear fail on your part. If you have a good argument, just explain it for heaven’s sake! Even NW can’t support you on this one, so he obviously didn’t get it either.

  86. Name Withheld says:

    You are truly sad, JC Jabba, when you deliberately confuse legitimate trusts with those that are set up to avoid tax and hide dodgy earnings. Elvis is involved with a family trust, like Mojo’s (her surname is Presley by the way) in the UK because that’s where his family is from. It supports a disabled brother,orphans, homeless kittens and sick animals and also pays tax on interest earned.
    It is very defamatory to accuse Mojo Elvis of dodging responsibilities, perhaps you can explain how? A totally ignorant and inappropriate attack.

    However…..

    What you would have seen, Jabba, was little Jimmy Shaw using his own dirty politics to smear Greenpeace and Mojo Mathers then trying to blame John Key for it. This led to Ms Mathers lying to parliament saying that her foreign trust wasn’t actually a foreign trust, for reasons that are completely inexplicable. Then Shaw and Little complained that we shouldn’t be mean to Mathers because she is deaf, and being deaf apparently makes her a bit stupid so none of this is her fault.

    You could also have watched Mr Shaw relentlessly bleating the same questions and supplementary questions pointlessly over and over.
    Reminded me very much of a man throwing a ball for a dog to fetch, when the dog had long since gone home and was curled up comfortably by the fire. Pathetic really.

    At least Angry Andy seemed to sense the futility of it all and sat down.

    And futility it was…. In breaking news.
    Prime Minister John Key said Inland Revenue staff have trawled through the Panama Papers and found fewer than 200 foreign trusts registered in New Zealand had links to Mossack Fonseca and all had been disclosed.
    Oh Dear How Sad Never Mind.

  87. jabba says:

    gee, I only asked if the cops have tapped anyone on the shoulder yet and I know the answer is NO. Poor old DK used the words ethical and moral. This is about the law not Dave’s ethics or moral opinion.
    Even the pathetic media have realised the whole scandal is a damp squid.

  88. Dave Kennedy says:

    NW, You clearly don’t actually understand the generally accepted meaning of a foreign trust, it actually refers to shifting funds earned in one tax jurisdiction so that they can be managed in another. In Mojo’s case the ‘family’ trust manages money within tax jurisdiction where the funds were originally generated.

    When the answer given in question time is actually not factual or a deliberate misrepresentation then it would be a weak opposition that just accepts that answer and rolls over.

    Jabba, I do understand that stretching legal limits to progress unethical stuff is accepted here. Legal bottom lines rather than ethical ones are what seems to be paramount. Our ethical/moral differences are clearly unresolvable but I am happy to state mine in regard to facilitating tax avoidance from other tax jurisdictions, I don’t think we should allow it or the possibility of it happening.

    Having this discussion allows me to establish that you guys are more than happy to continue supporting low disclosure, tax free foreign trusts despite what IRD and others have presented. You are also presumably happy with bankrupts having their assets protected so that those owed money can’t be compensated and those concerned can continue trading. Thanks for making this clear.

  89. Name Withheld says:

    Stop throwing the ball, Mr Kennedy.
    The dog has gone home.
    So should you.
    Its warm by the fire.

    Having this discussion allows me to establish that you guys are more than happy to continue supporting low disclosure, tax free foreign trusts despite what IRD and others have presented. You are also presumably happy with bankrupts having their assets protected so that those owed money can’t be compensated and those concerned can continue trading. Thanks for making this clear.

    You obviously(TM) don’t remember this guy.

  90. TraceyS says:

    “You are also presumably happy with bankrupts having their assets protected so that those owed money can’t be compensated and those concerned can continue trading. Thanks for making this clear.”

    It is not immoral to protect private assets from business failure. It is sound practice.

    You use “bankrupts” like it’s a dirty word. However, in business, there are often unforeseen occurrences which may carry a threat of business failure and potential bankruptcy.

    Bankrupts are more often than not people who simply dared get out of bed in the morning and take a risk.

    I am all for people having access to mechanisms which allow them to choose what they lay on the line. These can encourage and foster considered risk-taking with the confidence that not all will be lost in the face of failure.

    We need sensible risk takers. If there are not mechanisms to support them then we are left with the super conservative at one end of the spectrum and the reckless at the other.

  91. Paranormal says:

    I don’t intend to educate you DK. As you’ve said in the past you don’t enter this forum with an open mind willing to learn, you’re all about Green dogma. I’d rather your argument is torn apart in a more public arena than in the relative privacy of the blogosphere.

    That you can’t link a lawyer being prosecuted for setting up a sham, trust and legislation working is probably beyond education anyway.

    Personal abuse or statement of fact? Depends on your POV.

  92. Dave Kennedy says:

    Tracey it is my belief that if someone becomes bankrupt through accident or negligence, then they also need to pay their creditors where possible. When protecting assets can also mean dragging down lots of other innocent businesses, then I have a problem with trusts that block creditors from being paid what they are owed. I’m not sure why you support this?

    Paranormal you continually make the mistake that my arguments are Dave Kennedy’s alone, they are not. I am reflecting widely held views including that of the Southland Times Editor today, who is saying exactly the same things as me. It is actually you and those who profit from foreign trusts who are in the minority. You are clearly an apologist for tax avoidance.

    I am still waiting for your explanation, I may just be willing to learn something if you present something with substance, which you clearly can’t😉

  93. TraceyS says:

    “Tracey it is my belief that if someone becomes bankrupt…”

    Well, that’s because you’re a purist Dave – which is not all that useful. I credit myself with being a pragmatist learned through bitter experience.

    “When protecting assets can also mean dragging down lots of other innocent businesses…”

    Innocent businesses? What an interesting term. Actually, Section 137 of the Companies Act: Director’s Duty of Care requires:

    “A director of a company, when exercising powers or performing duties as a director, must exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account, but without limitation,—
    (a) the nature of the company; and
    (b) the nature of the decision; and
    (c) the position of the director and the nature of the responsibilities undertaken by him or her.”

    Most businesses suffering the consequences you highlight would be limited liabilities companies (as opposed to sole traders or other entity types) and, therefore, subject to the Companies Act 1993. This situation, ironically for you, is probably due to tax advantages, most specifically, avoiding the trust or top personal tax rates.

    “…protecting assets…block creditors from being paid what they are owed. I’m not sure why you support this?”

    Because if I owned a house (or any other non-business asset) and then wanted to start a business, completely independent of that or those private asset(s), then I would expect the law to provide a mechanism for me to protect my private asset(s) because they would have no relation to my business dealings.

    Creditors must (clearly, as it is a requirement of the Companies Act) do their due diligence on who they extend credit to. Most credit applications now ask for personal guarantees these days and I would imagine that many debtors sign these without really understanding what they are and that this will result in a PPSR record.

    Business is full of traps. If you want the tax advantages of being a company then you take the responsibilities as well. There is no such thing as an “innocent” business. The best that you can strive to be is prudent and responsible. To me, that doesn’t mean blaming others for your own inattention to the duty of care.

  94. Dave Kennedy says:

    “I would expect the law to provide a mechanism for me to protect my private asset(s)”
    If were just a modest family home I can see some justification, however you are naive to think that is all such trusts protect, Tracey.

    Read page four of this research:
    http://www.otago.ac.nz/law/research/journals/otago050389.pdf

  95. TraceyS says:

    With respect, Dave, you have no idea what I think and if you think that one blog comment represents the extent of my thoughts then perhaps your “naive” comment needs turned on its ear.

    From your link to a LLB (Hons) dissertation:

    “Trusts enabling individuals to ‘bludge’ off the government are by no means uncommon. This is particularly true when it comes to obtaining residential care and Working for Family benefits…”

    You are obviously not aware of how things work. A person in residential care has to pay the earnings of a trust they are beneficiary of (yes, even discretionary trusts) towards the cost of their care.

    As for trusts being used to obtain WFF benefits – I have no idea how that would work or why anyone would do it. The trust tax rate is 33% and the company (corporate) tax rate is 28%. But maybe you can explain, in detail so that this naive person can understand, exactly how trusts are used by businesses operators to ‘bludge’ WFF benefits?

  96. Dave Kennedy says:

    Tracey, you have lost me again, i thought we were discussing Sham trust?

  97. TraceyS says:

    Now you have lost me. What is “Sham trust”?

    Please explain for the naive among us.

  98. Dave Kennedy says:

    Certainly, Tracey, sham trusts are what Key’s ex lawyer sets up to protect the the assets of bankrupts, I linked to this earlier in the thread: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11633406

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