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 versus Little on no apology

John Shewan has released a letter he sent to Andrew Little’s office in June requesting an apology for Little’s remarks alleging Shewan’s involvement in helping the Bahamas preserve it’s tax haven status.

See Little slams Shewan who slams Little for the original allegations and Shewan’s response in April.

Shewan released the letter after Little this morning claimed he had not been asked to apoplogise.

Shewan’s letter to Little on June 10:

The suggested response is not acceptable. It does not recognise the severity of the incorrect statement made by Mr Little.

It’s reasonable to expect a person in Mr Little’s position to understand the impact and damage the statement he has made would have on me personally and the potential they have to negatively impact my business now and in the future.

I have been fair and extremely patient. It is close to two months since Mr Little caused me and my family considerable stress and humiliation.

My efforts to address the issue in a fair and timely way were responded to by procrastination and vain efforts to fob me off, whereas they could and should have brought a prompt resolution to this matter.

The statements made were patently wrong and damaging to my reputation and I now require an unqualified retraction which will go some way towards mitigating the damage that has already been caused.

A correction along the lines you are suggesting would be unacceptable.

I now request the statement I sent to you yesterday be issued with the following additions: ‘I apologise to Mr Shewan for any embarrassment I have caused him through my statements’.”

Please advise Mr Little’s position by 5pm today.

NZ herald reported earlier today that little was refusing to apologise and had not been asked by Shewan to apologise: Andrew Little on John Shewan: I will not apologise

Following the release of Mr Shewan’s inquiry yesterday, Mr Little said he did not need to go further.

“He explicitly said I don’t need you to apologise, I want a correction of a statement, and that’s what I’ve done,” he told reporters this morning.

And NZH later today: John Shewan says Andrew Little’s claims are misleading

When asked again to confirm that Mr Shewan had not asked for an apology, Mr Little said: “That’s my recollection of the first face-to-face discussion that we had.”

Little should be having a field day slamming John Key’s switch from denial there was any trust or disclosure issues to supporting the bulk of Shewan’s report and it’s recommendations to toughen up on trust disclosure requirements.

And David Seymour has highlighted Labour’s own shift in attitude on the trust issue and on Shewan’s report.

Andrew Little, then:

“John Key’s decision to appoint John Shewan to review New Zealand’s dodgy foreign trust rules shows a serious lack of judgement . . . A closed door review led by Mr Shewan will not restore our international reputation which has been so damaged by the Panama Papers.”

Grant Robertson, now:

“John Shewan’s report into foreign trusts is a rebuke to John Key . . . Labour supports the improved disclosure and transparency recommendations of the Shewan report. These will make for a system that is more open and will give foreign Governments greater ability to track down those who are avoiding their tax obligations.”

It’s no wonder Labour are struggling to get anywhere despite the growing number of  problems and stuff-ups the Government has been accumulating.

UPDATE: Andrew Little in Parliament today:

Andrew Little: If at least one member of the House is capable of accepting when he has got it wrong and publicly acknowledging that, when is he going to acknowledge to the public of New Zealand that he misled them about the state of our foreign trust tax laws?

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

 

Little then and now on Shewan

Andrew Little has made a bit of a habit of  jumping into criticisms of people associated in some way with National. One of those criticisms and a refusal to retract and apologise has resulted in Earl Hagaman filing defamation proceedings against Little this week.

In another example, in Parliament in April Little attacked tax expert John Shewan, who had just been appointed by the Government to investigate New Zealand’s handling of foreign trusts.

Andrew Little: Can he confirm that John Shewan and Don Brash advised the Bahamas that its financial services be zero-rated for value-added tax in order to protect the offshore services industry of that country?

Rt Hon JOHN KEY: No. I am not aware of that level of detail.

Andrew Little: I seek leave to table an article from a Bahamas news outlet, not widely available—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! The member is seeking leave to table a document. I want to listen to what it is. If there are interjections coming from particularly my far-right quadrant, that makes it difficult. Would the member start his introduction again as to what the document is.

Andrew Little: Thank you, Mr Speaker. I seek leave to table a media report from the Bahamas, not widely available, on the advice given by John Shewan and Don Brash to the Bahamas Government to the effect that international financial services be treated as zero-rated to protect—

Mr SPEAKER: Order! The document has been well and truly described. I will put the leave and the House will decide. Leave is sought to table that particular media article from the Bahamas. Is there any objection? There is none. It can be tabled.

  • Document, by leave, laid on the Table of the House.

Andrew Little: Does he not see that there is a fundamental problem with appointing a person to review our foreign trust laws who has advised a Government on how to protect its tax haven status?

Rt Hon JOHN KEY: The member has proven over the last 2 weeks that he is completely unfit to judge who—

Little has now admitted he was wrong – late on Saturday away from Parliamentary attention.

RNZ: Little admits Bahamas accusation was wrong

Labour leader Andrew Little has admitted he was wrong when he said two months ago that John Shewan advised the Bahamas government on how to maintain the islands’ tax haven status.

Mr Little said when he was appointed that the appointment cast doubt on the Prime Minister’s judgement.

At the time of Mr Little’s original criticism, Mr Shewan told RNZ News the trip to the Bahamas had absolutely nothing to do with its status as a tax haven, and any suggestion of that was complete nonsense.

The Labour leader now says that after meeting with Mr Shewan, he accepts his explanation that while he advised the Bahamas government on tax matters he did not advise it on how to maintain its tax haven status.

Mr Little said statements he made in April were based on a report in a Bahamas newspaper.

Google can be an opposition politician’s friend – and can also lead to embarrassment if not used thoroughly and carefully.

NZ Herald quote Little in: Andrew Little: ‘I was wrong’

Labour leader Andrew Little has today backed down from comments that the man charged with investigating New Zealand’s offshore trusts industry had advised the Bahamas Government on protecting its financial sector from tax changes.

“In April, I made statements concerning advice provided to the Bahamas government by John Shewan, the person appointed to review the disclosure rule concerning foreign trusts in New Zealand. Those statements were based on a report in a Bahamas newspaper,” he said.

“After meeting with Mr Shewan, I accept his explanation that while he advised the Bahamas government on tax matters he did not advise them on how to maintain their tax haven status.”

That was posted at 5:52 pm on Saturday, not exactly a high profile time slot.

It’s good to see Little concede that he made a mistake and apologise, even if the timing of this looks a bit like he is trying to do it with a minimum of media attention.

And I wonder why it has taken Little so long to do this. It was pointed out at the time he made the accusations that he could have been wrong, and it should have been quick and easy to have checked out his facts back in April.

Little accepts Shewan’s explanation

I presume more will come out about this but from a tweet:

Labour’s Little accepts tax expert John Shewan explanation he advised Bahamas govt on tax matters but not how to maintain tax haven status.

Going back to April: Little slams Shewan who slams Little

Andrew Little: Can he confirm that John Shewan and Don Brash advised the Bahamas that its financial services be zero-rated for value-added tax in order to protect the offshore services industry of that country?

Rt Hon JOHN KEY: No. I am not aware of that level of detail.

Andrew Little: I seek leave to table an article from a Bahamas news outlet, not widely available—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! The member is seeking leave to table a document. I want to listen to what it is. If there are interjections coming from particularly my far-right quadrant, that makes it difficult. Would the member start his introduction again as to what the document is.

Andrew Little: Thank you, Mr Speaker. I seek leave to table a media report from the Bahamas, not widely available, on the advice given by John Shewan and Don Brash to the Bahamas Government to the effect that international financial services be treated as zero-rated to protect—

Mr SPEAKER: Order! The document has been well and truly described. I will put the leave and the House will decide. Leave is sought to table that particular media article from the Bahamas. Is there any objection? There is none. It can be tabled.

  • Document, by leave, laid on the Table of the House.

Andrew Little: Does he not see that there is a fundamental problem with appointing a person to review our foreign trust laws who has advised a Government on how to protect its tax haven status?

Rt Hon JOHN KEY: The member has proven over the last 2 weeks that he is completely unfit to judge who—

Mr SPEAKER: Order! [Interruption] Order! That is a straight personal reflection on the member who has asked the question, and that will be ruled out of order. Would the Prime Minister stand now and answer the question. [Interruption] Well, I have not heard the answer. [Interruption] Order! I have not heard the answer, so I am going to invite the member to re-ask the question so I can hear the answer.

Andrew Little: Does he not see that there is a fundamental problem with appointing a person to review our foreign trust laws who has advised a Government on how to protect its tax haven status?

Shewan responded:

Mr Shewan told RNZ News the trip to the Bahamas had absolutely nothing to do with its status as a tax haven, and any suggestion of that was complete nonsense.

He said that the prime minister of the Bahamas had asked the New Zealand government to provide people to assist with putting GST in place in the Bahamas.

“Mr Key requested Don Brash and myself to go up there which we did.

“We recommended that they modify their proposed regime significantly and simply follow New Zealand’s rules across the board.”

Mr Shewan said they did recommend backing an existing exemption, as per international practice, that financial services be exempt from GST.

And from Andrew Little’s integrity and reputation:

“I absolutely reject any suggestion that I’ve acted in anything other than a totally professional way, and I do object to some of the very misleading so-called facts which are complete myths that are now being perpetrated in Parliament.”

 I don’t know why it has taken two months for Little to accept Shewan’s explanation.

Unclean Greens and RNZ

On a day that Green co-leader James Shaw called John Key’s behaviour in Parliament shameful – Shaw had a valid point but so did Key demonstrating smear by association workd for charities too – the Green Party Twitter account took a swipe at Key and tax expert John Shewan.

Green Party NZ@NZGreens

Wow, looks like when the Shewen really hits the fan, the PM goes postal. Very statesmanlike. #nzqt H/T @AlexvanWel

That’s a shitty smear of Shewan. The tweet was criticised:

UncleanGreens

Shaw doesn’t seem to have responded but the tweet appears to have been deleted.

@AlexvanWel is Digital News Editor at .

The comment comes from How RNZ, TVNZ and Nicky Hager joined forces to tackle the Panama Papers

Yesterday went more or less according to plan, so it seems.

Our three-way collaboration with One News and Nicky remains intact.

I expect it’ll still be strong when the Shewan really hits the fan.

That may have seemed clever at the time but it’s not a great look for what should be a balanced and impartial .

And @NZGreens have shown they can be unclean Greens at times.

Apologies to John Shewan would be appropriate.

New Zealand’s reputation at stake

Today’s ODT editorial says that “New Zealand is not a tax haven in the way many countries in the world operate” but the country’s reputation is at stake over the Panama papers revelations.

NZ’s reputation at stake

Prime Minister John Key is moving to protect the international reputation of New Zealand as a place to do business, with the release of the Panama Papers forcing his hand.

The Panama Papers have proved to Kiwis that this country is being used by foreign business people and global leaders as a way to pervert the tax laws of their home countries.

Let’s be clear, however. New Zealand is not a tax haven in the way many countries in the world operate. Our foreign tax laws may be used by overseas people to defraud their own countries of tax, but our tax base is not being exploited. Nothing about those trusts is illegal in this country with most apparently meeting our tax laws.

Nothing relating to new Zealand has been found to be illegal – yet – but if overseas people can use New Zealand’s trust laws to hide illegal activity or avoid tax illegally then it looks bad for New Zealand.

However it should be noted that if New Zealand wasn’t being used for questionable trusts other countries would be used – as they are, far more than New Zealand is.

What is at stake is New Zealand’s reputation which is seen around the world transparent and stable. We are consistently at the top of tables about the ease of doing business, the least corrupt country and one of the most transparent.

Mr Key is indicating a second phase of anti-money laundering measures may be brought forward in the wake of the Panama Papers. He denies the papers are evidence New Zealand is a tax haven, in line with tax experts. Here the foreign trusts need to provide information to Inland Revenue and the trustee fills out an annual return. In tax havens, little or no information is supplied to authorities.

If there is potential reputational damage then something needs to be seen to being done about it.

There has been no indication any of the people named were acting illegally, just that they were involved in some way or another. The tall-poppy syndrome is never far from sight in this country. The latest name dump is guilt by association, without context.

That is also a major issue that could affect reputations of those implicating named people in shady dealings.

Labour leader Andrew Little is saying Mr Key has damaged New Zealand’s reputation by siding with those people keen to limit their tax obligations. Labour will abolish foreign trusts but it needs to be said the current regime was put in place by former Labour finance minister Sir Michael Cullen in 2005.

Sir Michael required foreign trusts with New Zealand resident trustees to provide some tax information to Inland Revenue – exactly what is currently happening.

Thanks to the past Labour led government and the current National led government New Zealand’s tax and trust laws are (or have been) highly regarded. That is apparently a part of the problem, our reputation is being exploited by some people who want to use trusts.

The Government has appointed well-regarded accountant John Shewan to undertake an independent review of disclosure rules covering the foreign trusts in New Zealand. Mr Key indicated the Government is open to any changes Mr Shewan may suggest.

So far, New Zealand has complied with every information request from its treaty partners to the standard set by the OECD and $205 million has been invested since Budget 2012 to strengthen compliance work by Inland Revenue.

Reputational damage is hard to repair and Mr Key will be wise to act quickly on recommendations coming from both Mr Shewan and Inland Revenue.

The spotlight will be on Shewan’s report in particular. Somethig needs to be seen to being done.

For the good of New Zealand’s reputation Labour need to work positively with this with the Government to ensure our good tax and trust laws are improved.

Wake up call for well-regarded tax system

Peter Dunne knows the new Zealand tax system well, having been an MP for three decades and Minister of Revenue for a number of years.

On his blog this week he says that while New Zealand’s system is generally well regarded the Panama papers trust/tax issue is a wake-up call from complacency.

New Zealand’s tax system is generally well-regarded. In part that is because of our focus on a broad base, low rate approach to personal and corporate taxation, and in part it is because our system is relatively easy to comply with as a consequence.

However, there are now clear signs that the comparative simplicity and transparency of the New Zealand tax system, under which we have basked for so long, may not be the advantage we once thought it was.

Recent events like the global revelations about the tax paid by certain multinationals who are everywhere when it comes to their operations, but seemingly nowhere when it comes to their tax liabilities, and the release of the Panama Papers make it clear that New Zealand’s tax system with its emphasis on self-assessment, is being used in a way that was never intended to shelter various forms of international income.

For the first time, we are having to confront the label of “tax haven”, and it is uncomfortable.

Now, the solutions to these issues are not easy, nor limited to any one country, and it would be the height of idiocy to believe that New Zealand can simply draw up its ramparts, and all the problems will go away.

In a global environment, with capital flows occurring in the twinkling of an eye, it is just not that simple, and any politician who suggests otherwise is simply a liar.

Some opposition politicians are at least implying that New Zealand should just ‘fix’ the problems. They are either ignorant, or lying.

Any lasting solution has to be an international one, which it is why it is important we continue to work alongside the OECD and like-minded countries to achieve a viable outcome.

Our self-assessment system has generally worked well as far as local taxpayers go, but we may be a little naïve in assuming that large, foreign investors seeking a tax bolt-hole will be just as genuine in playing by our existing rules.

Tax is essentially the price we pay to belong to civil society. Implicit is the assumption that we pay our share, according to our means. In return, the state provides certain key services from which we all benefit: health, education and welfare services; public security and national defence, for example.

Any perception that some are not paying their share, or worse, are actively subverting the system to their advantage, which may have nothing to do with New Zealand, other than we are a convenient shelter for income, starts to tear at that implicit national contract.

And it appears that some politicians are prepared to try to build perceptions for political advantage – perceptions that could be damaging to the country if they get some legs.

I still believe in the basis of our broad base, low rate tax system, with its relatively easy levels of compliance.

Our challenge now is to ensure that in a rapidly changing set of international circumstances our ability to enforce our tax rules and ensure compliance; gather all the tax revenue properly due; and, ensure everyone pays their fair share, is not compromised.

The Panama Papers’ disclosures are a sobering and timely wake-up call in that regard.

Hopefully the John Shewan inquiry will either assure us our tax system is about as good as it could be, give or take a few tweaks.

Or it will highlight actual deficiencies that can practically be addressed.

Full post here.

 

Little unrepentant, Shaw sensible

Andrew Little is so far unrepentant after attacking tax expert John Shewan in Parliament, although has tried to shift the focus of his attack onto John Key.

In contrast Green co-leader James Shaw has taken a much more sensible tack. However his sort of reason is drowned out by the Little storm.

Radio NZ: Tax reviewer allegations a ‘storm in a teacup’

The Labour Party is not resiling from its latest attempt to discredit the man appointed to carry out a review of foreign tax rules, John Shewan.

In Parliament, Labour leader Andrew Little accused Mr Shewan – appointed to review the rules on foreign trusts – of giving the Bahamas advice to preserve its status as a tax haven.

Mr Little was asked what evidence he had, other than a newspaper article from the Bahamas.

“I can go on the reports that we have got, the government here has set up a review of our foreign trusts regime, but that review is being conducted by somebody who is now associated at the very least with advice to the Bahamas, a well known tax haven who following that advice has sought to preserve their tax haven status.”

Mr Little made no apology for his comments about Mr Shewan.

“John Shewan is a highly competent tax specialist and tax expert.

This is about John Key’s judgement, this is about his decision-making. He and his cabinet made the decision to appoint John Shewan to do a review into this area that is causing a lot of consternation amongst a lot of New Zealanders.”

Except that Little clearly targeted Shewan – see Little slams Shewan who slams Little and John Shewan on Radio NZ where Shewan says “And it’s very disappointing to hear the statements made today because they’re completely and utterly inaccurate.”

In contrast Green co-leader James Shaw is taking a much more reasonable and sensible approach to the controversy.

Green Party co-leader James Shaw said he did not see anything untoward about Mr Shewan’s trip to the Bahamas.

“Well I’ve been very careful not to target John Shewan personally, and I don’t think that somebody like that should be caught up in the political shenanigans.

That’s something that Little should take on board as an example of leadership with integrity.

“I think the really important thing here is to focus on what does the public need in order to have trust in the credibility of the review that’s been undertaken.”

Mr Shaw said Mr Shewan was obviously a tax expert, but it would be good to have a broader group doing the review.

I agree with Shaw, it would have been better to have had a broader group doing the tax and trust review, but sensible suggestions have been overwhelmed by Little’s lurch into attack politics.

The Greens must despair at Labour’s approach, because it is unlikely to help the chances of a credible Green-Labour coalition.

And I suspect more than a few Labour supporters will be concerned by Little’s line of attack. I’m sure more than a few ex-Labour voters will be disappointed in their ongoing lack of choice.

If the current Opposition gets a shot at forming a coalition it’s likely to be long time political attack mongrel Winston Peters competing with new pup Little for the top dog position of Prime Minister.

It’s no wonder more and more people are being turned off by dirty politics and are turning away from voting.