Nicky Hager says “What the Panama Papers show without any doubt at all, absolutely conclusively, is that New Zealand is functioning as a tax haven.”
That in itself may or may not be a serious issue for New Zealand. Any country can potentially be used in some way by someone as a tax haven.
It could be argued that Inland Revenue enables tax evasion because some people in New Zealand evade tax. Should we clamp down on the grey economy?
The key issue is whether New Zealand allows trusts that are out of the ordinary and what trusts are used for here can’t be used elsewhere.
Does New Zealand need to clamp down on trusts? Or are we just one option for rich people wanting to hide income and if we weren’t available they would simply do it somewhere else?
If the latter then it is an international issue and the motives for singling out New Zealand should be examined.
Nicky Hager has a reputation for politically loaded revelations so this will require substantial balanced analysis.
Tens of thousands of Panama Papers documents reveal how New Zealand, Niue, The Cook Islands and Samoa have become prime destinations for the rich to hide their financial secrets.
The documents have been subject of an investigation by ONE News, in partnership with RNZ News and investigative journalist Nicky Hager.
Hager says: “What the Panama Papers show without any doubt at all, absolutely conclusively, is that New Zealand is functioning as a tax haven.”
It can be revealed that at the centre of the New Zealand operation is Roger Thompson, a former Inland Revenue worker.
His accountancy firm – Bentleys, in the heart of Auckland’s business district – is the New Zealand agent for Panama law firm Mossack Fonseca.
Mr Hager describes it as “an ordinary office in the middle of Queen Street where nobody would look and where it’s only inside the computer files and the filing cabinet that you would realise that that is the centre of all kinds of tax haven activity in our country”.
For $4000 this New Zealand agent creates trusts for wealthy foreigners who use New Zealand’s limited disclosure rules to stay anonymous, even to tax authorities.
An admin fee of almost $3000 a year will see Bentleys send a one-page form to Inland Revenue. It confirms foreign trust clients don’t need to pay any tax under New Zealand law.
Mr Hager says: “IRD never knows who the real people are who are behind these trusts. They never get to see the accounts. They never get to see what business they’re doing.”
The point has just been made on Breakfast that what is happening in New Zealand isn’t illegal.
Andrea Vance has fronted the One News investigation – working closely with Nicky Hager – and she made the point that it raised important moral questions that needed to be considered.
The investigation into the Panama Papers New Zealand is a journalistic collaboration by reporters from ONE News, RNZ News and investigative journalist Nicky Hager.
It may be difficult separating political activism from legitimate legal and financial issues.
So it needs to be properly thrashed out whether New Zealand should allow this legal activity (legal on the New Zealand trust side of things at least).