New Zealand as a tax haven

Kapi-Mana News - - CONVERSATIONS - R JOHN­SON Ti­tahi Bay JOHN BURKE East­ern ward coun­cil­lor ALAN GIL­MORE Porirua GOR­DON CAMPBELL

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.

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