Labour on tax dodging

Labour are promoting a petition on their website: Demand action on tax dodging

Big multinational corporations are exploiting our weak tax laws to shift the profits they make in New Zealand offshore and avoid paying their fair share of tax here.

A serious accusation.

The Tax Justice Network estimate New Zealand could be missing out on up to $7 billion a year as a result.

Does Labour agree with that estimate? It would appear so.

And just this week it’s been exposed that New Zealand has become a tax haven for the world’s mega-rich to hide billions of dollars, launder money and hide stolen assets.

The government is refusing to act to stop this.

More serious accusations. Does Labour have anything to back these claims up with?

We’ll deliver this petition to Parliament where a Select Committee will consider it. The more of us who sign the petition, the more likely it is the Select Committee will launch an urgent inquiry.

Should a Parliamentary Select Committee take a party promoted petition like this seriously?

Sign this petition

To the House of Representatives:

We, the undersigned, request that the Government:

  • Close the loopholes that allow foreign trusts in New Zealand to hide tax avoidance, money laundering and fraud
  • Crack down on tax avoidance from multinational companies operating in New Zealand
  • Launch an urgent inquiry into tax avoidance, particularly by multinational companies and the use of New Zealand as a tax haven.

How do they suggest the Government does all this? Wave a tax wand?

Currently 9,513 “supporters”. Can they authenticate all of the online signatures? Does that matter?

This seems a very odd way for a major party to try to conduct Parliamentary business.

The petition is authorised by Labour’s general secretary Andrew Kirton, and Andrew Little’s social media details are provided.

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43 Comments

  1. Close the loopholes that allow foreign trusts in New Zealand to hide tax avoidance, money laundering and fraud

    These muppets clearly don’t have the first clue what a trust is. Real trusts are not taxable, the problem is with sham trusts.

    Reply
    • Strong For Life

       /  11th April 2016

      Yes, and another fact conveniently forgotten by Little and Robertson is that was Labour Finance Minister, Dr Cullen, that changed tax laws allowing these trusts to be set up. I don’t think the problem is any where near as bad as they claim, so once again Labour pushing a barrow that few, except the rabid left, care about.

      Reply
    • Ratty

       /  12th April 2016

      Give it up…

      They are Taxable

      The Income Tax Act is quite explicit about it..

      Reply
      • David

         /  12th April 2016

        Foreign trusts are not taxable, they are foreign assets, earning foreign income to non-residents, how would tax be due?

        Reply
  2. Alan Wilkinson

     /  11th April 2016

    51% of NZ voters dodge extra tax by voting against Labour’s tax and spend policies:

    1. Give me your money,
    2. Give me your property, and
    3. Give me your children so I can indoctrinate them.

    Reply
  3. S4L, yes I agree, and have commented elsewhere about the need for rational evaluation of the evidence. I have read articles in Indonesia, Malaysian, Australian and Chinese that claim sinister motives purely on the basis of “who”, not “what”, “why” or “How”. Kneejerk reactions are the norm. But the law (both Common and legislative) in all of those countries allows all of us to arrange our affairs to minimise our taxation liabilities,as long as it is within the applicable law. It behoves us all to look at the alleged transaction and identify what if any evidence is there of an illegal act or actions that have been taken? If the evidence is not there, then any claims about illegality are mere conjecture. Why is it that people are so quick to attribute negative motivations to others? Doesn’t this tell us something about the motives of the commentator? Some are quick to denigrate and slow to admit their errors – in NZ we call it the Tall Poppy Syndrome. Elsewhere its just plain jealousy. Suspicion is not enough.

    Reply
    • John Schmidt

       /  11th April 2016

      Barking at a passing car is not the way to conduct government affairs or to cteate robust law making. Imagine if all our laws were created this way. Just dumb politics by Labour.
      Absolutely investigate first to see what is truth and fiction then act if the findings identify unfairness or if the rules appear to favour acts deemed to be immoral or should be illegal. Exactly what JK is doing.

      Reply
  4. So Labour’s response is a petition demanding “The Gubbermint should do something ya’know, its DISGUSTING….”

    Where are Labours policies to address the issue? Where is the calm measured statesman like behaviour? Nowhere. Not when a screech and a shout will do.

    Dubious numbers computing by a group with an axe to grind. A desire to broaden and deepen taxation regimes to indulge in more wealth transfer from those who supposedly have to those who supposedly don’t…..

    Tax loopholes exist because taxation policy is so complex. – SIMPLIFY the taxation scheme. And cut back unnecessary spending. A nice 25K personal income tax free then 20% on the dollar, with the current GST rate. Then cut back the welfare state starting at WFF.

    Reply
    • jamie

       /  11th April 2016

      “Tax loopholes exist because taxation policy is so complex”

      Yes, which is why it was so disappointing that when Bill English said he was aligning the top personal, company, and trust rates, all he did was adjust the rates downward while leaving the differences in place.

      Reply
  5. Iceberg

     /  11th April 2016

    “This seems a very odd way for a major party to try to conduct Parliamentary business.”

    What if you aren’t a, you know, major party?

    Reply
    • Pantsdownbrown

       /  11th April 2016

      It shows how ineffective Labour are – with Parliament available to them to push issues they instead decide to do a website petition.

      Reply
      • Iceberg

         /  12th April 2016

        They’ll give it more credibility by promoting it on Twitter and Facebook.

        Reply
  6. Dougal

     /  12th April 2016

    I’d like to know how many Labour ministers have had “cashies” done for them over the years. The odd plumbing job, build a fence, a deck, fix a power point…Lets see how many “tax dodgers” there are then!

    Reply
    • Gezza

       /  12th April 2016

      So would I. I’d like to know how many pollies from all parties have. They’d be mugs to do it in their situation. It seems a bit of a red herring though.

      Reply
      • @ Gezza – It’s a giant school of red herrings! The daily “running of the Leftie”. This ‘sport’ avoids addressing the issue that corporate and [very rich] personal tax minimization contributes hugely to vast income and wealth inequality in our country and around the world. This inequality has social repercussions …

        I just heard Andrew Little on RNZ news say, “The real question is why we have these things in New Zealand at all?” I think that’s a fair question.

        The appointment of John Shewan to review the foreign trust regime is symptomatic of ‘industry capture’ of the economy and economic capture of politics and democracy. Absolutely certain not to address the grotesque income and wealth inequality and the values and ethics underpinning it.

        Some years in the future we’ll be dealing with yet another version of this in a never ending litany of them … “Meet the new ‘trough'” … although its hardly new any more … its the accepted orthodoxy. It is exactly what many people aspire to … To get into that club, to feed at that trough …

        @ dave1924 – Believe it or not I actually mostly agree with your SIMPLIFY comment. I would add ENFORCE so that everyone pays their 20% or whatever the rate is set at … and CLOSE loopholes …

        I do however agree with Kelsey that something must be done about “a state ideology that privileges capital over the rights and needs of its citizens”.

        Reply
        • Iceberg

           /  12th April 2016

          “symptomatic of ‘industry capture’ of the economy”

          Your preferred alternative would be “government capture” of the economy, right?

          Reply
          • @ Iceberg – Since any economy should be the servant of the people, not the people’s master, and provided a government represents the people – which may require some development of ‘democracy’ itself – my answer is a resounding YES!

            Example, (1 of 6) pg 244/Chapter 9 ‘The Fire Economy’ –
            1) a new international economic model that replaces financialisation with one that gives primacy to the social role of economics and exchanges …

            Before you freak out, note also this, “A new orthodoxy does not mean the prevailing world-view is replaced by a perfected alternative. Transition (or evolution) involves a process of disarticulation and rearticulation. Different values, concepts and techniques are grafted onto what is already there, which may itself have survived from a previous era … Critique, however, is much easier than creation.” – pg 247 (brackets = mine)

            Reply
            • Iceberg

               /  12th April 2016

              It’s like having a conversation with Yoda on LSD.

            • @ Iceberg – Fun eh? But you should stop taking that LSD ‘Precious’.

              Although it can’t possibly have happened in our Leftie Socialist school system – according to Alan – your indoctrination obviously happened somewhere? It’s clearly complete and absolute. You can’t even comprehend an alternative view, let alone consider it, is that what you’re saying?

              Are ‘economies’ not made up of people? Do economies not exist in nation states? Are nation states not governed by democratically elected governments?

      • jamie

         /  12th April 2016

        ” I’d like to know how many pollies from all parties have. ”

        I think the Nats usually get Maurice Williamson to do their minor plumbing, electrical and handyman repairs. Not sure if he does cashies though. 😀

        Reply
      • Dougal

         /  12th April 2016

        Indeed, not just Labour..All of them. It is tax dodging. But if you are going to throw stones you had better make sure your glass house is in order.

        Reply
      • Dougal

         /  12th April 2016

        @ Gezza
        Red Herring from who? It was my thought, no body else’s. It is a reality, many, many people ask for cash jobs and very frequently. I’m pretty sure there are plenty of pollies from all sides of the house that have done it. My point is, unless Labour are 100% squeaky clean then all they will attract by going down this route is more scrutiny. I’m sure they would prefer not to draw attention to themselves.

        If anyone, and I mean anyone is involved in fraud, money laundering or tax evasion I hope they are outed, charged and jailed. I care not from what political camp they are PartisanZ!

        Reply
        • Gezza

           /  12th April 2016

          Take your point Dougal I just see this as slightly different. Cashies happening across the board I’m aware of. I don’t think I’ve ever done it. Somebody offered to come back and do a 2nd tradie job for me once for “just the readies”. He was a crap tradesman anyway and I never took him up on it.

          Reply
          • Dougal

             /  12th April 2016

            Fair enough Gezza. I’m not inclined to be petty and less inclined to use petty examples. What I mention is a serious problem. In 2011 NZ’s black economy was valued at around $20b with lost tax revenues of $7b. Primarily made up of tax evaders including tradespeople (chashies), under the table wages, non payment of GST, non payment of personal income tax and online traders. At that time the shadow economy was 12.4% of GDP so, not so petty or insignificant. Since then we have had a booming building trade, Christchurch recovery, housing boom so extrapolate that out and those shadow economy numbers look pretty big.

            Here is the link to the article in Stuff:

            http://www.stuff.co.nz/business/money/6065508/Cash-jobs-crime-drive-black-economy

            A wise person once told me…look after the pennies and the pounds will look after themselves. Sometimes we loose sight of what is happening right under our noses and little bits here and there all add up to some staggering numbers.

            Happy blogging 🙂

            Reply
            • Dougal, I consider your comment deserves more than just my thumbs up. Thanks for a useful comment. The other problem is the group who fiddle their GST returns and milk the cash register. Fortunately, credit cards make avoidance a bit harder but then you have the problem of card cheats. Where does it stop? Integrity and being honest is the only way.

            • Gezza.

               /  13th April 2016

              @ Dougal @ bj thanks. Have another point each.

  7. David

     /  12th April 2016

    “The Tax Justice Network estimate New Zealand could be missing out on up to $7 billion a year as a result.”

    I’d love to see how they worked that number out. The highest possible estimate is $200bn for global taxes, and that assumes all money in offshore vehicles are untaxed, there is no way NZ’s share would be anything like $7bn, or even a tenth of that.

    Reply
    • @ David – Oh well, that’s all right then, only $700 million or less. We’ll let it go this time.

      @ Dougal – The issue seems like it might be large scale tax evasion, money laundering and fraud, a small reflection or microcosm of almost unfathomable amounts occuring globally. That’s the reason I think your politicians doing “cashies” is a red herring. It’s a bit like focusing on minor benefit fraud as opposed to major white collar crime. Sure, investigate both but do so proportionately.

      Perhaps especially in a system where it might be argued that what some people might call ‘white collar crime’ is either legitimised or ignored? Example: Loan sharks for a long time.

      Reply
      • David

         /  12th April 2016

        “Oh well, that’s all right then, only $700 million or less.We’ll let it go this time. ”

        That number is based on 100% evasion. That is simply not the case, the reality is you would be lucky to see more than a couple of hundred million. That is significantly less than the tax losses from the cash economy.

        Reply
        • @ David – Okay, let’s gather all the lost tax from all these sources …

          How do you know it’s “significantly less than the tax losses from the cash economy.”?

          Reply
      • Dougal

         /  12th April 2016

        On the contrary Parti. Tax evasion big or small is still a crime. The IRD in particular are front footing a campaign to reign it in as we speak. I understand where you are coming from as far as the more significant offending goes and perhaps my “cashies” theme could be considered fish that aren’t worth frying but the principal is the same. Labour need to ensure their back garden is in order before tossing grenades over the wall.

        Reply
        • @ Dougal – Yep, just like National need to make sure their garden is in order before the Prime Minister, the so-called leader of the nation, says something like, “Move on folks. Nothing to see here”?

          The Law does have discretion, as evidenced by the HDPA gun buying affair, and should exercise it. Maybe fry the big fish first? Bring in the bucks to catch the little people?

          Reply
          • Dougal

             /  12th April 2016

            Do you have a source for that quote? Thought not..

            As far as HDPA is concerned she should have been charged, end of. How she managed to get out of that I don’t know but if it was I that had used a false document to obtain a firearm I will have had 2 charges. Using a document and illegal possession of a firearm. Oh no but it was just a demonstration of how lax the law is..No, she had to brake the law several times to obtain the firearm.

            As mentioned above, if there is fraud, money laundering or tax evasion then nail the buggers. If the trust is operating within the law and tax avoidance is taking place then that is what the law provides. It continues to be lost on most people that in these cases there never was any money in NZ and never has been. The “money” or “assets” reside elsewhere and are subject to that countries tax laws not ours. We never had any money or assets to tax. Why is this so hard to understand?

            Reply
            • Can’t find the quote Dougal. I heard it with my own ears though, or something very like it, so no apology forthcoming. You, of course, reference everything you post?

              – See more at: http://thedailyblog.co.nz/2016/04/07/shrugging-off-the-panama-papers/#sthash.wiWKCYWF.dpuf

              “Six years ago, in May 2010, Key’s government came under heavy criticism for tax cuts conferring huge windfalls of cash upon the wealthiest New Zealanders. Not yet two years into the job, he struggled to grasp the motivation for his critics’ outrage.

              “We can be envious about these things”, purred the Prime Minister, “but without those people in our economy all the rest of us will either have less people paying tax or fundamentally less services that they provide.”

              Seldom has so much of the mythology of the very rich been packed into a single sentence.” Oh yes, of course, its just simple envy.

              http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11617208

              “Co-leader James Shaw said the bill would put an end to the “legalised secrecy” which made foreign trusts so attractive to criminals and tax cheats.”

  8. David

     /  12th April 2016

    “This seems a very odd way for a major party to try to conduct Parliamentary business.”

    Just to add, Labour is no longer a major political party, it’s a protest movement, and a meaningless online petition is right up their street.

    Reply
  9. I see that the slavering mongrel dog that is the MSM is calling for specific MPs to release the details of their taxation payments, as well as other financial information. One hopes that the Editors and Journalists who are making these calls also will be subject to the same regime. What ever happened to personal privacy? Don’t these idiots understand how risky it would be to reveal full details to the Public at large? Next thing there will be kidnapping of relatives of the richer MPs and Ministers because the criminal element know where the cash is. Think I am joking? Go ask a citizen of China, Hong Kong, Singapore, Indonesia who is a successful businessperson and they will tell you all about the extra costs of protection of not just their families but also their homes and business places. The people who are attracted to sign the petition for release of the information need to stop and think. It is a pity that the MSM and others behind the petition have not done just that. Labour has scored another own goal for bandwagonning one of the really stupid calls on this matter.

    My advice to MPs affected is tell the petitioners to go to hell, and protect themselves and their families.

    Reply
    • Pantsdownbrown

       /  12th April 2016

      Labour never learn – how many times have they attacked Key for essentially being a “rich prick” and the end result is that they continue to lose support?

      Kiwiblog sums up the latest ‘hit job’ well;

      Kiwiblog: Shock horror – law firms do trusts. Stuff tries to make it a scandal:

      Stuff.co.nz: “Prime Minister John Key has declared a financial link to a company specialising in foreign trusts”.

      “The latest register of MPs pecuniary interests listed the Antipodes Trust Group Limited as a debtor in Key’s entry. The register was released on Tuesday”

      “On its website, the Antipodes Trust calls itself a specialist provider of trustee and associated services for foreign trusts using New Zealand as their jurisdiction of choice”.

      Kiwiblog: I’ve seen a tweet that the short-term deposit is simply from the sale of an apartment in London. As anyone knows when you sell a property it goes into your lawyer’s trust account and they then pay it out to you. So the big scandal is that Key sold an apartment!!

      But hey I hope Labour keeps this up, rather than focusing on the economy, jobs, hospitals and schools. I am sure they can drop even lower than 28% if they try.

      UPDATE: Felix Marwich has a statement from the PMs Office. The deposit is even more mundane – it is a payment in advance of costs and the money is invested in a NZ trading bank. Yawn.

      Reply
  10. Wow, those arbiters of the real truth ,VERNON SMALL AND TRACY WATKINS, have just published an article entitled “Prime Minister John Key linked to company specialising in foreign trusts. ” It goes on to say “Prime Minister John Key has declared a financial link to a company specialising in foreign trusts.
    The latest register of MPs’ pecuniary interests, released on Tuesday, listed the Antipodes Trust Group Limited as a debtor in Key’s entry.
    On its website, the Antipodes Trust calls itself a specialist provider of trustee and associated services for foreign trusts using New Zealand as their jurisdiction of choice.

    Wow what a story! A respected NZ Law Firm is used by a respected NZ Prie Minister to assist in his family financial arrangements. Wow what a story!! I have to confess that I too use a respectical legal firm and a professional accountant to mange my and my wife’s affairs, because that is the transparent and ccost effective way ofensuring compliance with NZ law.

    So I have to ask, why the head lines? What is the motivation of SMALL and Watkins in authoring this article which is meaningless, no story there and they claim to be rofessional journalists, then wonde why the majority of NZers think the place of Journalists is so low it competes with policians. My advice to SMALL and WATKINS is to grow up and look for the real stories that are available in the ICIJ data base AKA the Panama Papers right now, as I know. Too many cockers and footy shows taking up their time? What investments have they made? Where are they at? Use a lawyer or Accountant? Oh there has got to be fite there, Ive seen the smoke!! EEECh, barf

    Reply

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