New Zealand as a tax haven

MUDDLED MESSAGE FROM MURRELL

Councillor Euon Murrell has successfully muddied his message Kapi-Mana News (March 29) about proposed changes to our rubbish collection.

Perhaps he could clarify some questions.

1. What is the ‘‘no change’’ cost? In the third paragraph of his statement he says $10 and yet option 1 says the change will be $20. I amconfused. 2. How does the council ensure wheelie bins will not blow over in a wind? A wheelie bin potentially means even more rubbish blown around on collection day. They are not that stable.

3. Are the wheelie bins free at set-up or do they have to be purchased by each household? What is that cost and who pays for replacements?

4. Option 4 actually means a rates savings of $20 per household. This he discloses in the fifth paragraph, but not the option table.

The net cost is ‘‘more than $250’’ less $20 surely. Or is the ‘‘more than $250’’ supposed to scare us off? regarding councillors’ report cards (March 5).

1. While my accessibility scored quite high, it was not the highest.

I would be interested to know of one individual who has been unsuccessful when trying to contact me.

2. While I was reported as having no responsibilities, I chair council workshops and more of these are held annually than all but Te Komiti meetings.

3. My not residing in the ward was mentioned. I spend a great deal of my working life in the Eastern ward.

Two other Eastern ward councillors also reside in the Northern ward and anothers principal domicile is outside Porirua. I amsurprised I was singled out.

4. As most panelists do not attend council meetings, I suppose they judge councillor performance by their public profile, among other things.

It is true I no longer seek a high public profile.

I believe it is of more benefit to the people of Porirua for me to devote that time to my council responsibilities, like preparing for and attending meetings by a thorough reading of council papers, site visits and other research.

I have had some difficulties in the past with some panelists. What chance do I therefore have of getting a favourable rating from them?

5. For those who are unaware why I sought re-election to council, my principal motive was about local government reforms. It is my view that Porirua’s financial viability is, in the medium term, a problem.

The council has not achieved a balanced budget in many years and is not scheduled to for some time.

The economies of scale that will result from a union with a neighbouring local authority or local authorities will be able to restore that viability on a longterm basis.

I believe I amuniquely experienced to pursue this complex issue.

I have been directly involved through three previous waves of this kind of reform.

WE ALREADY HAVE BIO-SECURITY CHECKS

In response to Gordon Campbell (April 5), passengers to New Zealand are still screened for a bio-security risk.

There are at present checks and processes in place at the border to keep New Zealand clean, green and pest-free.

We tend to assume that other countries take notice of New Zealand whenever we perform well – or badly – on the world stage.

In fact, other countries usually have other things on their minds.

During the past week, New Zealand has fretted about our role in the Panama Papers tax scandal, and has agonised about the ‘‘reputational risk’’ to this country of being seen as a tax haven.

In the circumstances, it seems legitimate to query whether anyone offshore – apart from Australian Financial Review – has noticed that New Zealand is involved.

We do not feature, for instance, in the published lists of the 10 major tax havens used by the clients of the law firm at the centre of the scandal.

That doesn’t mean we’re not a tax haven.

Clearly, some firms have been exploiting our image as a First World country to tout for dodgy, tax-sheltering business.

Yet the imagined risk to our national reputation seems beside the point.

It doesn’t help to identify how New Zealand got into this line of work – and nor does it define the regulations required to meet our international obligations to prevent money laundering and terrorist financing.

Many of these problems have been self–inflicted.

In 2005, Treasury secretary John Whitehead praised the reduction time for company registration – ‘‘from two weeks to just 30 minutes.’’ Whoopee.

As a result, ‘‘New Zealand has been identified as one of the easiest countries in the world to start up a new business, from a compliance point of view’’.

The same year, National Party MP John Key echoed those sentiments by asking: ‘‘Why not have an offshore banking industry based here?’’

According to Key: ‘‘ You could attract 200 banks to register here – each with a CEO and staff. You could attract insurance companies. Bring back lots of Kiwi accountants and lawyers. Single out clusters, such as highclass yachts, or other special sectors…’’

Within the space of four years, New Zealand became a magnet for dubious traffic.

As Commerce Minister Simon Power conceded in 2012, New Zealand’s reputation as a good place to do business was being harmed by foreigners using New Zealand-registered companies ‘‘to commit or facilitate crime such as money laundering, tax evasion and fraud, in overseas jurisdictions’’.

Currently, steps are being

‘‘Realistically, what can be done?’’

taken to stem this traffic. The Ministry of Business Innovation and Employment recently concluded a consultation process on six suggested remedies for the problems at hand.

Realistically, what can be done?

Arguably, any firm registered in this country as a financial services provider could be required to comply in future with our money-laundering and terrorism financing laws, even if all its clients live overseas.

Additionally, all such New Zealand-registered companies could be required to operate via a New Zealand bank – which would at least enable the Reserve Bank to monitor their activities.

When it comes to aiding and abetting international tax avoidance, New Zealand lost its virginity quite some time ago.

At this point, the Government cannot credibly remain in denial about the flaws in our regulatory systems.

Reputations can be restored only by identifying what went wrong, and by ensuring prompt and proper compliance in future.