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.

More on HDPA and firearms

The purchase of a firearm by Heather du Plessis-Allan for the Story programme on TV3 continues to get attention.

The police have issued a statement:


Like the police raid on du Plessis-Allan’s house this has been criticised. Rummaging through personal belongings looking for handwriting samples seems an odd step considering she had openly described what she had done.

However while many kournbalists are condemning the police action David Fisher has written a brave and thought provoking opinion column:

Heather du Plessis-Allan and the gun: Did she find a loophole or simply break the law?

Whoever filled in the form provided some of the required details by using a bogus name and credit card number.

The section seeking the number of a firearms licence was filled using an invented number. (The invented number was checked by Gun City staff and came back from police as genuine, clearing the way for the purchase.)

Lower down the form was a section marked “Police Use Only”.

Whoever completed the form created the name of a fictitious officer and included what appeared to be a police registration number.

The requirement for the police officer’s involvement is explained at the top of the form. It quotes section 43a of the Arms Act 1983. That’s the section of the law which makes it legal for guns to be sold by mail order.

Of interest to the Story team was the legal requirement for the form to be signed by the person buying the gun, and the legal need for it to carry the endorsement of a police officer who had seen the buyer’s licence.

The “Police Use Only” section wasn’t just for decoration – it was a stated legal requirement for a mail order purchase, as was the use of a proper name. There are penalties for selling a a gun without consideration of all those steps.

I believe there was great cause for serious thought before the form was completed using bogus details. There are serious penalties around forgery, with a maximum prison sentence of 10 years.

As Fisher goes on to say, this wasn’t a loophole, it appears to be breaking the law.

The law doesn’t stop anyone from walking onto the street and punching another person. It provides clear guidance why it should not be done and sets out penalties for stepping outside that law.

Almost always, a “loophole” is what is exposed when you do something the law does not cover but should. In my opinion, a “loophole” is not what you have when you break the law just to show how easy it is to break.

While it’s fair enough questioning how the Police are investigating, it’s also fair enough questioning whether the degree of law breaking was justified to point out a potential weak part of the online purchase process.




Asset sales 49% ownership at risk?

National signalled their intentions on partial asset sales early last year.

Government to pursue mixed ownership model

by Hon Bill English, Hon Tony Ryall, Finance, State Owned Enterprises, Budget 2011

The Government’s five tests for proceeding

The Government has decided to pursue extending the mixed ownership model after being assured the following five tests can be met:

  1. The Government will maintain a majority shareholding stake by owning more than 51 per cent of each company.

How much will the Government retain in each company?

No decisions have been taken on precisely how much of each company will be retained by the Crown – other than the Government will retain a majority shareholding.

That is quite clear on retaining majority shareholding.

John Key: Trust us

Prime Minister John Key says the public should trust his government’s word it will not sell more than 49% of five State Owned Enterprises, although there will be no legislation to stop future governments from doing so.

The government would not be legislating to ensure State ownership of the companies could fall below 51%.

“I think the feeling is we don’t need that. But look, we have built up over the last three years, I think, a very strong sense of trust with the New Zealand public. When I say I’m going to maintain 51%, or [not] sell more than 49%, I think New Zealanders will take me at my word,” Key said.

“I can’t bind future Parliaments, but my view is it would be highly contentious for any future government to want to sell down the majority stake,” he said.

I felt I could trust Key on that. He had kept his word about no asset sales in his first term as Prime Minister. He was open about signalling his intentions for his second term and putting that to the electorate.

I supported National’s right to promote it’s key asset sale policies and if it won the election I supported it’s right to implement them. I supported National during the election on that basis.

I campaigned on United Future being a responsible centre-ish party, able to keep National honest and if elected in a position to moderate National’s policies. Asset sales were not a part of United Future policy, but limiting ownership was. The election flyer was clear:

After the election a Confidence and Supply Agreement was agreed on between National and UnitedFuture:

Confidence and Supply Agreement

5 December 2011

United Future agrees to provide confidence and supply for the term of this Parliament, to a National-led government

Policy Programme

The National-led government has agreed during this term of Parliament to adopt and implement the following broad principles, policies and priorities advanced by United Future:

  • Introduce statutory limits on the sale of public assets to no more than 49% of shareholding to private interests including limits on the extent of single entity ownership

That seemed very good, key United Future commitments included, which apart from the statutory limits it was in line with National’s policy promises.

This was widely reported.

Dunne holds key to asset sales vote

The UnitedFuture deal signed with National last week included a guarantee not to sell Kiwibank or Radio New Zealand and to legislate for at least 51 per cent Crown ownership and a 10 per cent cap on individual shareholdings.

“The agreement reflects exactly the position we campaigned on,” Mr Dunne said.

Yes, that’s the position I campaigned on. But last week there were reports of a “minor policy decision” that allows otherwise.

Loophole allows sale of over 49pc

A loophole in the law covering partially privatised state assets will allow much more than 49 per cent of the value of the companies to be privatised, providing the extra shares do not carry voting rights.

The Government has pledged to retain 51 per cent of the four energy companies.

But a “minor policy decision” by ministers, revealed in a Cabinet paper released last week, shows that the 51 per cent limit, as well as the 10 per cent cap on individual shareholdings, will apply only to voting shares.

The Cabinet has agreed “the 10 per cent and 51 per cent restrictions should be calculated on the basis of voting rights rather than the total percentage of all securities held (including those with non-voting rights)”.

That does seem to specifically allow for selling more than 49% shares to private ownership. Which would be contrary to the C&S agreement for statutory limits on ownership.

When asked about it Peter Dunne emphasised the importance of government retaining control through majority voting rights. I agree that’s important. This is confirmed in the MOM Bill:

The wording in the Mixed Ownership Model Bill, which has had its first reading in Parliament, would ensure control of the companies remains with the Government.

But it ignores the National commitment to “statutory limits on the sale of public assets to no more than 49% of shareholding to private interests”.

John Key has said he guarantees National would sell no more than 49%:

Speaking to reporters in Jakarta last night Key said he guaranteed the Government would keep a 51 per cent majority.

“It’s a technical argument but the reality is we want to sell up to 49 per cent of stock and retain the other 51 per cent.

“We are not going to do anything tricky there.”

But the Cabinet agreement seems to be doing something tricky. It appears to directly contravene a coalition agreement. If National are adamant they won’t sell more than 49% of any sort of stock (voting or non-voting) why have they specifically allowed for it.

I trusted John Key in his last term.

I think I trust him not to break this 49% promise during this term.

But if National campaign on selling more than 49% during their next term (or even if they don’t campaign on it, Key may not still be Prime Minister with the next National government) they will have legislation ready to do that immediately should they win the next election.

If this Cabinet decision carries through into the Bill and there is no statutory limits on the sale of public assets to no more than 49% of shareholding to private interests including limits on the extent of single entity ownership then National would appear to be breaching the C&S agreement with UnitedFuture.

And they would be legislating for something they have clearly said they won’t do – in this term? While Key is PM? While National stays in government?

If this Cabinet “loophole” is allowed to carry through I’ll be seriously questioning the honest intent of National.

And if United Future just lets this happen, disregarding what we all campaigned on and what was written in the C&S, that will be a major problem for me, and I would have to decide how to deal with it. It’s not something I could just leave and forget, I think it involves a major principle, of why I campaigned for and supported United Future, both during the election and since.

John Key’s trust can’t be contradicted in legislation. If he is true to his word the words of the MOM bill should state what he claims clearly.