Panama Papers: Don’t let the facts get in the way of a good story

The left wing has been quick to attempt to blame John Key for the situation outlined with the theft of private documents released yet again by a complicit media.

But as Richard Harman of Politik points out in his daily email the facts don’t line up with the left-wing blame game over the Panama Papers.

While the Prime Minister was sticking to his briefing notes at his weekly press conference yesterday on the question of the 11,000 offshore trusts registered in New Zealand, it appears the Clark Labour Government may have enabled their presence here.

The 2007 rewrite of the Income Tax sets out how overseas people can set up in trusts in New Zealand and pay no tax provided that none of the income in the trust originates in New Zealand.

In 2005 Labour’s Finance Minister, Michael Cullen, tightened up reporting requirements for the trusts but emphasised that their activities would remain tax free.

He said: “”Foreign trusts will be required to have an IRD number, keep records for New Zealand tax purposes, provide certain information when they are first set up in New Zealand or appoint New Zealand trustees, and provide information to Inland Revenue on a regular basis.

Under New Zealand law, foreign income derived by non-residents is outside the New Zealand tax base, and rightly so. The government has no intention of changing that. Because they are not taxed here, foreign trusts that are set up here do not have to file New Zealand income tax returns or keep records if they receive only foreign-sourced income.

Those pesky facts haven’t stopped the idiot currently leading the Labour party to jump straight in.

Labour Leader Andrew Little said: ““The question for John Key is how long he has been aware that New Zealand is becoming a favourite investment location for foreign companies looking to keep their profits tax-free, and what has he done about it. The Prime Minister must address claims he has fought to retain the loophole whereby foreign trusts that hold offshore property and earn offshore income have no tax obligations in New Zealand and don’t have to file an annual income tax return here.”

I’ve looked a bit further into this as well, and I’ve found out something else that is interesting.

The Trustee Act 1956 was created under National.

Then it was amended under Labour with the The Trustee Amendment Act 1988.

And further amended by Labour in 2005 with the Trustee Amendment Act 2005.

So it appears that the Trustee Act has only been amended twice, both times, by Labour and not since John Key has been in office. It was that paragon of the left Helen Clark and her Finance Minister Michael Cullen who were the last to amend it.

As is usual the Media party, quick to see an opportunity to bash National have jumped on the band-wagon. Where this may hurt though is Helen Clark’s bid for the UN Secretary-General’s job, as she will now be known as the PM who last amended the Trustees Act which is now the subject of an international scandal.

 – Politik

 


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  • Seriously?

    There was a large earthquake off the coast of Vanuatu, surely Key’s fault?

    My child recent read a book about a boy who cried wolf too many times and in the end the villagers let him sit on the opposition benches until he had deep vein thrombosis.

  • soeasy

    You are a better investigative journalist than the so-called investigative journalists in the MSM. Thanks for shedding some light on this whole issue, and not taking part in the constant grandstanding by Little and co.

    • Michelle

      The only really thorough investigative journalist in NZ all the more reason why the Media party go out of their way to try and shut WO down because it makes them look like the clowns they are

      Thank goodness we have WO to tell us the truth about this latest “scandal” that isn’t

      Wonder if Hager is going to write another novel about this ready for next years election it is becoming standard for him to do this

    • Positan

      Indeed, just when I think Little has demonstrated for the final time his car-park-puddle depth of political grasp and understanding – blow me down, he up and proves that the afore-thought depth has been grossly over-estimated.

  • Rebecca

    Well done WO.

    Many here will have seen the progression of NZ company maintenance from the “pay your lawyer $1000 and receive a boilerplate constitution and a rubber company seal and then pay the accountant $250 every year to file the return” to the arrival of marvelous online inexpensive systems followed by online filings at no cost. Talk about elimination of red tape! But then came what we now know to be predictable abuse of pioneering NZ systems, mostly by treacherous outsiders. So cost and additional reporting reappears with more to come.

    The lesson is that while such mechanisms may work well for NZ business, good behavior cannot be expected of everybody else- notably the overseas sneaks who don’t give a proverbial for NZ’s intentions or reputation, only for themselves.

    • Second time around

      These systems have always been used for dubious as well as legitimate purposes. If a company changes its name from XYZ(2012) Ltd to XYZ(2016) Ltd, it may be a name change, or it may be that it went bust in between and now has a different director- if dealing with a company, take some care. The exception is a dairy farm trading as a limited liability company, where according to Andy Little, banks should lend more and more and lower the interest rates at the first sign the company is in difficulty.

  • R&BAvenger

    I sense a disturbance in the force of this Media Party hit job and an opportunity for the PM or Bill to whack Angry Spittle at Question Time. Please let it be on the list of questions.

  • Cadwallader

    What gives the NZ government any right to tax foreigners on income earned in foreign lands? I can’t think of any reason. I expect that the costs of administering foreign trusts in NZ is considerable and those costs will be taxable in the hands of the NZ based administrators. This is an industry from which NZ derives fees from other countries. There is nothing here to clobber the present government with. I heard Paddy Gower bleating that there is nothing uncovered which will embarrass JK….yet! The combined powers of reasoning from within the MSM and Labour must be very close to zero.

  • Kevin

    “Labour Leader Andrew Little said: ““The question for John Key is how long he has been aware that New Zealand is becoming a favourite investment location for foreign companies looking to keep their profits tax-free, and what has he done about it.”

    Can someone please explain to me what is wrong with allowing foreign companies to invest here and not pay tax on overseas income? Surely encouraging foreign companies to invest here, create jobs for the locals, etc, is a good thing.

    • NeverMindTheBoll

      Um, foreign companies setting up a local subsidiary for the purpose of investing locally is one thing; foreign companies setting up a local trust for the purpose of laundering stolen money is quite another.

      • earthyundertones

        Yes, it is, but as just about every overseas publication has stated there is no evidence whatsoever that any of these trusts have been used to launder money. Obviously you would expect some, but that could be said of any bank account. Having a foreign trust is not evidence of wrongdoing.

  • earthyundertones

    I have seen that many of the negative press pieces published in Stuff, Herald and now reported on News Talk have originated from Deborah Russell (and are especially critical of the govt) “It’s shameful for New Zealand to be caught up in international tax avoidance,” Deborah Russell from Massey’s School of Accountancy said yesterday”. The media really should also state that Deb Russell was the Labour candidate for Rangitīkei, writes a left wing blog called “Left Side Story” and chairs the Labour Party Economic Policy Committee… So good to see some un-bias reporting then.

    • Jono

      Immediate red flag when I heard that name, because I remembered she was a local Labour candidate to me.

      • Poppa

        Does one have to be a member of the Liebor party to get a job at a university?

        • Jono

          As long as one is a lefty liberal apologist, I think it matters not which party one belongs to or supports.

  • Annoyed

    They keep talking about National being the party of tax dodgers but from what I’ve seen in the last 7 years, National have closed a huge number of loopholes. Am I missing something or is it just standard lefty dishonesty and hypocrisy?

  • Mr_Blobby

    They also forgot to mention that we were named along with the rest of the developed World.

    It is an important subject but it is a World globalization problem not us alone.

  • XCIA

    I heard the angry one beating his gums to the effect that the PM and his ministers should come clean and disclose the details of their trusts. That should go down well with all his idiots who have trusts and live under the cloak of perceived poverty to fool their constituents.

    • Annoyed

      Only National ministers should be held accountable for their actions.
      He kind of has a point to be honest. Most of the National ministers have come from jobs with accountability so it’s only fair to expect accountability from them in Government. Most of the lefties have never really been accountable so it’s unfair to hold them accountable now.
      Or they could realise we live in a democracy and expect everyone to be treated equally.

  • Keanne Lawrence

    There was an elongated article on Stuff about this “scandal” only worthy of a quick skim. Not surprisingly there was no mention of the statutes regarding such trusts or more particularly any subsequent amendments.
    At the point of viewing there were some 172 comments with the majority getting up votes for naturally blaming John Key again only skimmed but there one lonely unliked that did address the elephant in the room.
    The Media party continue to treat the public with blatant contempt while feeding the LCD population with what they hope to hear. All being reinforced with their go-to slanted experts they have on speed dial.

  • Eon Te Huhi Kerewaro

    Is this the ‘well-researched’ post about the panama papers? Deflecting to an attack on the labour party? Instead of blaming the group who brought it in, the issue is to fix it and the current government needs to do that, instead of just blaming a government that hasnt been in for 3 terms. Quit the bickering and just fix it. We all know the smiling assassin would have known about this in the first place.

    • earthyundertones

      Fix it. Yes, have you actually seen the extent of the problem that needs “fixing” or have you just listened to the idiotically driven rhetoric.

      The attached graph is actually from the guys who broke the story… you can find it at https://panamapapers.icij.org/graphs/ . If you look closely you can see that New Zealand is indeed mentioned but the line is at the very bottom of the graph and is… well, negligible. I tried to click on it and i think it said there were FOUR trusts involved. Let me allow you to think about that for a moment. If there is anything wrong with these four (or so) trusts would you actually change the legislation? Would you support your bank being closed or changed by legislation if they found four bank accounts held by drug dealers etc?

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