Is Labour’s attack on multinationals even legal?

(Photo by Hagen Hopkins/Getty Images)

Another policy launch from Labour raises more questions than it answers. It is also quite possibly illegal.

NBR reports:

Labour’s big splash attack on multinational tax avoidance – technically minimisation rather than outright avoidance under the current law – is part nervous response, part scene setter.

The nervous response part is aimed at its likely coalition partners in any post-September 23 governing arrangement, the Green Party and New Zealand First.

In the case of the latter party, of course, leader Winston Peters has long railed against tax rorts by large, mostly foreign companies, and in fact made his name largely by an attack on such arrangements by way of the Cook Islands.

Thus far though, there doesn’t seem to be any repeat of the Winebox Inquiry of 1996 in the works.

But Labour leader Andrew Little is also watching the Green Party closely: The Greens’ annual conference on the weekend spent a great deal of time making a pitch for any left-wing voters hankering for some sort of local, Jeremy Corbyn-esque radical insurgency.

Those voters are only going to come from Labour, and there is no shortage of despairing Labour voters at the moment, casting around for a left-wing alternative to what is looking like an increasingly moribund party.

Which will lead to increasingly desperate policy making.

The $600 million Mr Little says the IRD will be required to get out of such companies looks largely plucked out of the air, if not a darker place.

Once again they’ve pulled numbers out of someone’s arse.

And it is highly irregular – to put it mildly – for tax officials to be told by politicians they have to get X amount of dollars out of a particular group of taxpayers.

That sounds like a shake down.

In fact, it is probably illegal to do so, given the way the Tax Administration Act has been carefully written to prevent politicians from being able to order any tax auditing or enforcement activity against any particular individual or groups.

It’s the kind of thing which has led to multiple abuse in other countries, and New Zealand has always managed to steer clear of such political interference in administering the tax law.

But Labour is all for it. Nice to know.

The scene-setting part of this latest call from Mr Little is that tomorrow party finance spokesman Grant Robertson is going to unveil his “alternative budget” in Wellington.

A bit late for that isn’t it?

Presumably, the $600 million will be an important component of that alternative.

But the release of that also raises an intriguing question.

In just over a month’s time, the Treasury releases its pre-election economic and fiscal update. This is required by law since the early 1990s, after two elections in which governments hid the real state of the economy and the government’s books before New Zealanders voted.

That deceit – one by National in 1984, the other by Labour in 1990 – left some deep scars in New Zealand’s body politic.

The update – the PREFU,  to give it its short term – is prepared by Treasury officials and includes the outlook for the wider economy, as well as the likely government position on taxing and spending.

With the way the economy has been running, it will show a slightly better picture than did the last set of forecasts, in Finance Minister Steven Joyce’s government budget, released in May.

The odd thing is Labour is not waiting for those figures, suggesting it either has something else up its sleeve, or it is simply failed to factor the PREFU into its pre-election schedule.

Labour are just setting themselves up, yet again, to be roasted on their fiscal responsibility…which is non-existent.



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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.