The misleading world of news versus advertising

It is increasingly difficult for media to make money these days. Some of their methods and inconsistencies are being questioned.

A thread at Reddit suggests that The Spinoff is confusing product promotions with news on Facebook: The Spinoff hiding adverts like it’s a news article, the same stuff they call out other media agencies for. No disclaimer, no transparency.

That’s on Facebook. It was pointed out by ‘nekomae’:

The “Content created in partnership with HelloFresh” banner at the beginning of the article, the “Partner content” author credit, and “This content was created in paid partnership with HelloFresh” disclaimer at the end (including a link to their partner content policy) doesn’t count?

You have to look carefully for those disclosures but they are there.

It might not be excellent transparency but “no disclaimer” would suggest an absolute lack of anything.

RanuiVibes91 responded:

Fair point. I’m meaning on the actual FB post. Doesn’t really bother me either way just more the fact they call out everyone else but don’t exactly follow the rules themselves. Moral high grounds and all that….

Both fair points. On Facebook there is no indication it is an advertorial type link – and Facebook will be the primary place that many people see content from media sites like The Spinoff.

Looking at other links on The Spinoff’s Facebook page shows criticism of other media and their advertising, but more links that appear to be product related.

This is fair criticism of advertising at NZ Herald (there are often advertisements on television that are just as misleading). Actual costs – $14.99 PLUS $49.98 for ‘processing and handling’ PLUS $9.99 for ‘processing and handling’ of the ‘free’ nutrient fusion (whatever that is) for a total of $64.97 – for a 30 day ‘risk free trial’. The actual cost to buy everything outright is $599.97 – so this is awful advertising and deliberately misleading about the price.

But this is a separate issue. Back to The Spinoff on Facebook.  Also yesterday:

News or product promotion? There are no disclosures on the linked article, so this appears to be an actual article – but it’s impossible to tell the difference on Facebook.

While it can’t be ignored I usually manage to avoid most advertising online. If something does annoy me I shut it and go somewhere else.

But these advertising methods must be effective or they wouldn’t keep being used.

It amazes me that there is growing business in delivering food packs to homes, but that is consumers choice.

So is avoiding links and sites that have annoying advertising – also consumers’ choice.

 

 

 

 

The Government waiting game is poor

Traveller commented: “Jacinda and Winnie’s anti-capitalism, anti-migration, anti foreign investment frankly scares me”.

Parties needed to be given time to wait for results, and to negotiate governing arrangements, but continued delays can give a feeling of being strung along.

It is especially important that we have confidence in the incoming government to be responsible and sensible on economic matters – the financial and business worlds continue despite being under a caretaker government.

The lack of information given since the election a month ago, especially over the last two weeks, is poor from the parties involved.

Winston Peters claimed that negotiations were complete a week and a half ago, but it was obvious they continued up until he made his decision to go with Labour. and it appears that negotiations have continued since then.

And I suspect the policy agreements are being massaged for public consumption.

This isn’t a good start for a new government.

Claire Trevett: Paddles the cat the only bright spot in transparency

For almost three weeks now the confidentiality has continued – the two weeks of talks behind closed doors with barely an iota of information emerging and four days since NZ First leader Winston Peters cast his lot with Labour (and the Greens, although Peters has selective hearing when it comes to that word).

New Zealanders know precious little about what securing that support has cost Labour in terms of policies – and money.

We should be better informed by now.

Ardern has promised “meaningful, material change.” Change can be exciting but is can also be unnerving. She cannot forget almost half the country did not vote for that and will be nervous about what it entails.

Businesses are likely bracing themselves as talk abounds about increases to the minimum wage and fair pay agreements.

The Greens and NZ First voters also want to know whether the policies they voted for survived the negotiations – and if it is worth it.

Small amounts of drip fed policy concessions will be concerning some voters who had hoped for something different.

Ardern may consider the past three weeks of near silence a necessity. It is regrettable one and Ardern has been worryingly swift at becoming adept at it. It should not become a habit.

Here’s hoping Ardern’s Prime Ministership will be marked with a tad more transparency than it has begun with. She got away with it because she is Jacinda Ardern and people are giving her the benefit of trust. She campaigned on hope and change – voters should have been told a bit more about what that means in practice.

Leaving journalists out in the cold for so long is having an effect that will likely result in more scrutiny and less honeymoon for the incoming government, not a bad thing.

But the public are being poorly served here, it is not a good start.

The ongoing waiting game has been poor, and getting worse as it goes on.

The concerns may all wash away tomorrow when the Labour-NZ First and Labour-Green agreements are revealed.

But if there are signs of not getting full and open disclosure, or signs of trying to hide some plans, or signs trying to gloss over significant policy concessions, then the new government may have set themselves up for a tough start.

Shewan reccomendations all go

When the Panama Papers were pushed publicly John said there was nothing wrong with how we allowed foreign trusts to use New Zealand, and he claimed that there was nothing wrong with disclosure requirements (as I remember it).

Under pressure Key appointed John Shewan to investigate and report. His recently released report said that our foreign trust laws were not fit for purpose and put New Zealand’s reputation at risk.

Today the Government responded and said they would implement all of Shewan’s recommendations, albeit with a few tweaks.

The official response: Government to adopt Shewan recommendations

The Government is acting on all recommendations from the Shewan Inquiry into foreign trust disclosure rules, Finance Minister Bill English and Revenue Minister Michael Woodhouse announced today.

The Inquiry made a number of recommendations which propose improvements to registration and disclosure of information, anti-money laundering rules and increased information sharing between government agencies.

“The Government has always been open to making improvements to New Zealand’s already strong tax settings if that was warranted,” Mr English says.

“The Shewan Inquiry’s recommendations are sensible and well-reasoned and by acting on all of them, we will ensure that our foreign trust disclosure rules are strengthened and New Zealand’s reputation is protected.

“The changes to the foreign trust rules are a matter that the Government intends to move quickly on.

“The Government intends to introduce legislation to require a register that is searchable by Internal Affairs and the Police, and annual disclosure requirements in the coming months.”

Mr Woodhouse says that while the Government agrees with all of the recommendations from the Shewan inquiry, the way in which a small number are implemented will be tweaked.

“We have already committed to a course of action for strengthening New Zealand’s anti-money laundering rules, which will bring in more comprehensive requirements for lawyers, accountants, real estate agents and others,” Mr Woodhouse says.

“For example, lawyers and accountants will be included in AML/CFT requirements as soon as practicable, However due to issues around legal privilege and regime supervision this will form part of the more substantial AML/CFT reform programme already underway, which is being expedited.”

The good thing about this is that New Zealand’s foreign trust regime and reputation should both be strengthened.

And a lesson to learn is to not take too much notice of Key’s initial reaction to issues foisted on him. Wait to see what he will actually do once he has properly assessed things like need and political risk.

Shewan shakes complacency on foreign trusts

John Shewan’s report on foreign trusts points out current inadequacies, particularly regarding disclosure, and John Key has indicated that most of Shewan’s recommended changes are likely to be implemented.

This is a change from Key’s initial response to the Panama Papers, which was typically dismissive of there being any problems.

Audrey Young at NZ Herald points out that Hard-hitting report jolts complacency

After the release of John Shewan’s hard-hitting report on foreign trusts, Key foresaw someone would point out the differences between what he previously said and what the report concluded.

In April the public was told through a combination of himself, Revenue Minister Michael Woodhouse and Finance Minister Bill English that New Zealand’s foreign trust regime was world class, robust, that it had integrity, and it had full disclosure, and that we were not a tax haven.

The response was relaxed. Key spent the week going through his own tax history to make sure he could give personal assurances about not having foreign trusts.

With more stories on the Panama papers, pressure built for some inquiry.

Eventually the Government acted.

This is typical of Key. He brushes off initial criticisms and attacks, but if the situation demands a change of approach he will eventually morph into addressing concerns. In this case New Zealand’s reputation was at stake so something had to be seen to being done..

Shewan’s report has shaken the complacency: “The rules are not fit for purpose in the context of preserving New Zealand’s reputation as a country that co-operates with other jurisdictions to counter money laundering and aggressive tax practices.

“It was reasonable to conclude there are foreign trusts in NZ being used to hide illicit funds, Shewan said. Disclosure demands could be described as “light-handed”.

Both Shewan and Key have made it clear that New Zealand is not a ‘tax haven’ as some critics have kept alleging, but our “light handed” approach made it too easy for trusts here to be misused.

Key:

“I said New Zealand is not a tax haven – well he agrees with that perspective.

“I said that there is full disclosure of information – there is when it is asked for – but what he is really saying is we should make it easier for people to ask that.

“I said we have a strong tax treaty and tax information network, well we do …

“I said if we get recommendations for change, we will always look at those. We have.”

Shewan made it clear that our disclosure rules weren’t good enough and need to be improved, and Key seems to agree despite his continued “full disclosure” claim that has now an Animal Farm addition – “when it is asked for”.

Shewan says we need a stronger “tax treaty and tax information network” and it looks like we will get that.

Key has shown again that when it is warranted he will change position significantly while trying to sound like he is being consistent. Pragmatic politics.

Did the hard out attacks on Key and on New Zealand’s foreign trust rules have the desired effect?

Yes, for those who wanted tougher trust disclosure.

Probably not for those who wanted to politically damage Key to any extent. He’s well practiced at minimising that.

The end result is New Zealand will be a bit better for the changes that Shewan has recommended by giving Key’s apparent complacency a good shake.

Shewan recommends trust disclosure improvements

The report on the John Shewan inquiry into foreign trusts and tax has been released today. There’s nothing very surprising in it.

It makes a number of recommendations particularly on foreign trust disclosure rules, and John Key says they look sensible and the Government is likely to adopt most recommendations.

There’s been a number of attempts to score political points over this but I think that improving how New Zealand deals with foreign trusts is a good outcome regardless of how this came about.

Conclusions

1.2 The Inquiry concludes that the existing foreign trust disclosure rules are inadequate. The rules are not fit for purpose in the context of preserving New Zealand’s reputation as a country that cooperates with other jurisdictions to counter money laundering and aggressive tax practices.

1.3 The Inquiry considers that a significant increase in information disclosed when a foreign trust sets up, annual reporting and increased enforcement, will satisfactorily address the issues identified. Banning foreign trusts or removing the current tax exemption is not considered to be necessary or justified.

1.4 In theory, New Zealand’s existing tax disclosure and exchange of information arrangements should be sufficient to deter tax abuse, and its anti-money laundering rules should ensure that funds held by foreign trusts are from legitimate sources. However, under current law and enforcement practices the risk of detection by authorities is low. The Inquiry considers that the disclosure requirements can be justifiably described as light-handed.

1.5 Strengthened disclosure requirements should act as a deterrent to offshore parties looking to use New Zealand foreign trusts for illicit purposes.

1.6 The Panama Papers have not been released publicly by the journalists who have them and were not available to the Inquiry. There has been no direct evidence of illicit funds being hidden in New Zealand foreign trusts, or of tax abuse. However, based on the work undertaken, including a review of IRD files, the Inquiry considers it is reasonable to conclude that there are cases where foreign trusts are being used in this way. The current legislation, regulations and practice that govern disclosures by foreign trusts present both the potential and the environment for this to occur.

1.7 Publicity around the Panama Papers has the potential to cause reputational damage both to New Zealand and to many other countries. The Inquiry considers that any significant adverse impact on New Zealand internationally is unlikely if appropriate action is taken to tighten the disclosure rules.

1.8 Foreign trusts, like domestic trusts, are a legitimate vehicle used primarily to manage family wealth. New Zealand is an attractive location in which to base a foreign trust as it offers stable political, judicial and legislative settings and respect for property rights and privacy. The supporting services industry is significant, and generally comprises skilled and efficient professionals.

1.9 Allowing foreign trusts to establish in New Zealand is consistent with the Government’s policy of maintaining an open economy which welcomes foreign investment and an active financial services sector. 2

1.10 The tax treatment of foreign trusts follows New Zealand’s long established and principled policy of not imposing New Zealand tax on foreign source income derived by non-residents. It does not result in New Zealand being a tax haven under established OECD criteria. However, the Inquiry notes that the classification tax haven is an ambiguous label that is now of historic relevance. It is best not used as a basis for decision making without much deeper inquiry.

1.11 New Zealand has a strong and well-deserved reputation as an active member of OECD and other international bodies working to clamp down on global corruption, money laundering, financing of terrorism and tax abuse. It is also regarded as a country that leads by example and it rates well in international peer reviews. Actions to increase disclosure requirements would be consistent with New Zealand’s commitment to global transparency initiatives, and can be expected to be well regarded by other countries, particularly those in our tax treaty network.

1.12 Before the Inquiry began, the Government had introduced legislation to counter the use of Look Through Companies (LTCs) in foreign trust and other structures to derive foreign source income in excess of a low amount. While the Inquiry was underway the impending introduction of phase 2 of the Anti-Money Laundering (AML) rules was announced. This is expected to be enacted in 2017 and will result in lawyers and accountants being required to apply the AML rules. The Inquiry supports these initiatives and thinks that they will reduce the scope for inappropriate use of foreign trusts.

1.13 The foreign trust regime does not appear to be inconsistent with any specific obligations under current international agreements to which New Zealand is a party. However, as there is a reasonable likelihood that the regime is facilitating the hiding of funds or evasion of tax in some instances, the Inquiry considers that New Zealand’s tax treaty partners would have a legitimate expectation that some action will be taken.

1.14 The recommendations in this report are designed to achieve a balance between allowing foreign trusts to continue in New Zealand and materially reducing the scope for foreign trust structures being used for illicit purposes such as hiding illegal funds or evading tax. If adopted, the changes may result in a reduction in the number of foreign trusts, in particular those that rely on nondisclosure to achieve their effectiveness.

The report is here: Government Inquiry into Foreign Trust Disclosure Rules: Report

 

Disclosure and freedom of speech

Yesterday somebody demanded “Full disclosure Pete”, which was a bit ironic considering their lack of disclosure, but what they asked for was already in the open.

But it has prompted an issue that I’ve wanted to bring up here in regards freedom to comment here and disclosure.

Last year there were attempts to disrupt and discredit Your NZ, and also attempts to legally gag and shut us down. The commenting problems were mainly with a small number of people abusing anonymity and through the misuse of pseudonyms and false disclosures.

Most regulars here are open to me about who they are, with some preferring to comment under a pseudonym. This works very well in general.

A small number choose to try and disguise their identity and provide false information. There may be sort of valid reasons for this in some cases, but in other cases less so.

Those who are not prepared to disclose requested information potentially put this site at greater risk should they post anything claimed or found to be defamatory or illegal. In such cases I need to take greater care.

The malicious actions of a few can impact on others who use similar techniques, in order to protect the integrity of the site. Occasionally this may be unfortunate but it will affect very few.

While freedom of speech is one of the fundamental principles of Your NZ there are responsibilities involved with the privilege to speak here.

If a valid email address isn’t provided then I can’t contact people over issues of concern should they arise, so I can’t deal with things as I can with a person who discloses who they are.

If anyone chooses non-disclosure here then your participation and your right to speak may have greater limitations as a necessity to keep Your NZ functioning as freely and as reasonably as possible.

Generally commenting here has been much better over recent weeks, in part due to less disruptive individuals, and in large part due to the manner in which most of you participate. Thanks very much for your ongoing contributions.

Trust requires trust changes

After the Panama papers trust story broke pressure has been heaped on John Key and the Government over New Zealand’s association, with accusations that New Zealand is a tax haven that harbours illegal money hiding and laundering.

Key has a difficult and very important job in dealing with this.

Calls have been made to change how we allow foreign trusts to be formed here, with far better disclosure than Key’s claimed “full disclosure”.

Vernon Small: New Zealand’s trusted reputation demands changes to foreign trust rules

NZ deserves points for good behaviour on this front.

However, this is now an issue of reputation and New Zealand’s standing in the world.

And to claim that the required level of record keeping is “full disclosure”, as Prime Minister John Key did this week, is a bleak joke. To claim it negates accusations NZ is a tax haven – because we do not have such levels of secrecy – is equally laughable. If it doesn’t make New Zealand a “tax haven” – and it sure looks like one – it at the very least makes it “a haven” from scrutiny. Just look at the advertisements spruiking New Zealand’s advantages to foreign trusts.

However you look at it, Key made a significant political blunder this week by instinctively defending the tax and trust regime (and by extension those who might exploit it) in the face of domestic and worldwide suspicion. Don’t ask me, ask the supporters of Donald Trump and Bernie Sanders.

To make matters worse he cited the benefit to New Zealand – some $24 million in fees harvested by lawyers and accountants setting up and managing the funds. What price New Zealand’s reputation – something IRD and other officials had already warned about? And is it morally defensible to effectively say any loss of revenue from trusts here is some other country’s issue and we are focused on defending our own tax base? An “each country for itself” approach hardly sits well with international steps, which New Zealand has enthusiastically joined, to deal with corporate profit shifting and base erosion.

By midweek Key was gently rowing back, pointing to OECD work on the issue and opening the door to change to improve the foreign trust regime.

But by appearing to side with the so-called “1 per cent” he handed a cudgel to his opponents to beat him with. It is the very characterisation of Key that they have tried – and struggled – to make stick; the rich former money trader whose sympathies rest with the world’s big money and corporates to the detriment of the “battlers”.

So what should or can the Government do about it?

The tax rules on trusts are probably fair enough, although they differ from many other jurisdictions. It’s the interaction between those and the level of secrecy enjoyed by foreign trusts that creates the problem. You can’t ask for what you don’t know exists. Australia recognised this in asking for the IRD to proactively supply information where an Australian is involved – hence that question on the IRD form.

New Zealand at the very least should ask for the country of origin of any settlor as a first line of disclosure and then make a call whether that should be provided to their home country – if only to buttress our reputation for clean dealing in the post-Panama Papers era.

To some countries that disclosure could be automatic. To others – or in the case of people and organisation with trusts and legitimate fears at home – we could take a more restrictive approach.

Or we could stop registering foreign trusts and have done with it.

It might not be simple to just suddenly scrap the foreign trusts.

But changing to more disclosure won’t be simple. If thousands of trusts have been set up in New Zealand on the understanding that there is a degree of confidentiality then it would be difficult to suddenly remove a shroud of secrecy.

But doing nothing and fobbing off concerns is not a good option.

To retain or regain trust New Zealand needs to address foreign trusts in a meaningful and demonstrable way.

Failure to adequately disclose authorship

In Stuff fails disclosure test David Farrar holds Stuff to account at Kiwiblog for failing to disclose that the author of an article promoting a Forest and Bird promotion was the online communications coordinator for Forest & Bird.

There is an article at Stuff called Ten things you never knew about New Zealand’s birds.

…I then noted the author was Kimberley Collins, and I realised (as I knew Kimberley worked for Forest & Bird) that it is not an article by a journalist, but an advertorial by Forest & Bird. But nowhere is it disclosed.

…what is wrong is the Fairfax didn’t put a statement on the article saying Kimberley is the online communications coordinator for Forest & Bird. If you did not happen to know this (as I did), then you would assume it is an article written by a Fairfax journalist called Kimberley Collins.

In this case it was relatively harmless but at best it’s sloppy from Stuff.

It’s not as bad as Whale Oil attributing posts to Cameron Slater when they have been written by someone else with a political or commercial agenda.

But it doesn’t adequately inform readers of the connection an author has with topic of a promotional article.

Repeaters posing as reporters is poor practice.

Apology to Stephanie

On the previous post Is The Standard “a mouthpiece for Labour”? I criticised The Standard for what I felt was inadequate disclosure statements about the authors. Authors aren’t identified and don’t make disclosures in the site’s ‘About’ or via other menu items.

Some authors sometimes (infrequently) make a disclosure on a post or in comments but if you miss it it can be difficult to find.

One of the authors, Stephanie Rodgers, was not happy with what I posted.

Stephanie Rodgers @stephanierodgrs
LOL Pete George is basically trying to dox the Standard’s authors. Congrats on compiling totally upfront, public information about me, troll

 

Keep spinning, Pete, especially when I DO give disclosure and you magically avoid acknowledging it.

God you’re a sad little liar.
bootstheory.wordpress.com/about/

I cannot be responsible for your inability to use the internet, Pete.

Long story, won’t go into detail but the end result is this – you can find Stephanie’s disclosure when she posts at The Standard.

  1. Find one of her standard posts where she links back to her own blog. I took a while to see this as it’s a link just under the post details:
    Stephanie Standard
  2. If you notice ‘Boots Theory’ and realise it could be is Stephanie’s own blog with a disclosure statement you can click on that.
  3. This is the current home page. I had to search for a while to find her disclosure statement.
    Stephanie Boots Theory
    I searched at the top for ‘About and also at the bottom but couldn’t find it. But I eventually discovered if you click the black square on the left it pops out a side menu which has a link to About on it, which has this Disclosure:

Disclosure statement

All opinions expressed on this blog are my personal views.

 

I work as a communications officer at the Engineering, Printing and Manufacturing Union.  I am a member of the Labour Party and have previously worked for Labour’s team in Parliament as a lowly receptionist.  Nothing on this blog should be construed as a statement made on behalf of any of these organisations.

Apology two – sorry for annoying you and not finding this on my own Stephanie.

I guess your day job as communications officer doesn’t apply in your political world.

I see that you have been a Labour staffer, I’ll update the details on the previous post.

 

Harré and non-disclosure of political commentators

Laila Harré’s political associations were well publicised late last month, but earlier in the month she was posing as a political commentator without disclosing her interests.

On May 3 Harré  was a panellist on The Nation. She is described on the programme website as “former Alliance MP and unionist”.

She was introduced on air as “former Alliance MP now political adviser”.

Yesterday Stuff reported:

Meanwhile, Norman revealed that new Internet Party leader Laila Harre had wanted to be a Green Party MP before she quit her adviser role in Decembern. 

A spokesman confirmed she was also on the campaign committee until a fortnight ago.

Being on the Green Party campaign committee is a very significant factor in assessing what Harré said. I remember at the time thinking that some of her comments sounded very party specific rather than simply left leaning.

This was also about the time she was talking to the Internet Party about joining and leading the party. On 29 May (Radio NZ “Laila Harre new Internet Party leader“) Harré said she had been approached “about a month ago” by Vikram Kumar and had met Kim Dotcom “about three weeks ago”.

It would have been awkward for Harré to disclose early discussions with the Internet Party but there is no excuse for not revealing her close involvement with the Green Party.

“Blogger and pollster” David Farrar was on the same The Nation panel, while his National associations are it is widely known in political circles casual viewers won’t be aware of them so that should also be disclosed each time Farrar appears as a commentator.

Why did Harré suddenly pop up on a political panel? She had been out of public political arena for some time until then.

This raises important questions.

How do political panellists get chosen? Is it entirely a function of the programme to seek a range of opinions? Or do political pundits (or their parties) promote themselves to get some airtime?

Disclosure of political interests should be a standard practice. Many viewers won’t know any affiliations, especially current involvement in political activities. Then viewers, listeners and readers can judge the comments of the commentator accordingly.

Without proper disclosure it is easy to assume some degree of neutrality.

Whether it is the programme that fails to properly disclose or it is the commentator who is lying by omission it is very poor practice.

It would be simple to make proper disclosures and should be a standard practice in political programmes.