Kudos to the journalists involved in trawling through the 11 million plus documents that make up the Panama Papers dump this week, including Nicky Hager, RNZ journos, and my own excellent TVNZ colleagues Andrea Vance and Jessica Mutch.
Whereas most people might consider a story that involves tax avoidance on a global scale, fraud, money laundering and other shenanigans that directly implicate New Zealand, a rather large story, our own Government has dismissed it as nothing whatsoever.
Astonishingly, a number of prominent journalists are in complete agreement.
One thing’s for sure: the spin machine’s been hard at work. A brief list:
1. Nicky Hager is a left-wing loony and conspiracy theorist.
The spin is that this is a concerted campaign by left wing activists around the world, motivated by the politics of envy, to attack the wealthy and bring down governments it doesn’t like.
The Government successfully used this line against Nicky Hager on the release of Dirty Politics, and has sought to discredit him and anyone with views like him repeatedly over many years.
The reality is that Nicky Hager works with almost 200 of the world’s top journalists from the International Consortium of Investigative Journalists, a project of the Center for Public Integrity run out of Washington.
It has been set up to provide information to people around the world where a time and cash-strapped media cannot (and sometimes, will not).
Nicky Hager brought on board some of the country’s most stringent reporting teams in his efforts to weigh up how 60,000 mentions of New Zealand in the Panama Papers stack up.
Their findings are poured over by lawyers to meet strict requirements for balance and accuracy. It’s no beat up, either here – or in the dozens of other countries where other excellent journalists are doing exactly the same thing.
2. New Zealand is not a tax haven (instead, “it’s a high quality jurisdiction for trusts with a benign tax system in certain circumstances”).
Our Prime Minister, for reasons never fully explained, has long wanted New Zealand to act as a financial services hub, like Switzerland or Ireland.
Like those countries, we have a stable legal and political regime, and a tax regime with a massive loophole that allows people from overseas to store their money here virtually invisibly.
Despite many stories over the years that New Zealand Trusts were being used as tax havens, the Government has repeatedly refused to do anything about it, and in fact, stopped the IRD looking further into this regime only recently after being lobbied by Trust industry figures.
Which in any other language is corruption, plain and simple.
3. We’re looking into it.
In other words, we will do the bare minimum required to meet OECD standards, but continue to try and keep this business going.
After all, if there’s no wrong-doing, there’s no need to change much, is there?
4. It’s Labour’s fault.
It’s true that the loophole developed out of law passed in 2007, under the Labour Government, which was designed to stop New Zealanders hiding their wealth from our own IRD.
But National has been in government as the loophole has been increasingly exploited. It’s been warned about it, and done nothing.
In addition, in 2010, it added the ability for Trusts to own Look Through Companies (LTCs) – an entity that passes all profits through to shareholders without paying any corporate tax. Again, exploitation of this vehicle has been ignored.
5. What’s happening is legal/there’s no morality to tax.
A grain of truth here to be sure.
The practice that allows people from around the world, often from some of the poorest countries on earth, to stash cash in New Zealand made either legitimately or not, is indeed legal.
But we are helping facilitate the outflow of tax money from countries where people suffer from lack of health, education and basic infrastructure.
We are suffering reputational damage because the rest of the world understands that to encourage this practice is wrong.
When even Donald Trump is saying the wealthy of America will be taxed more, it’s clear even hard-core capitalists have reached a tipping point where it’s acknowledged the global elite do not pay enough tax and ordinary people are suffering.
Why is New Zealand so keen to perpetuate this imbalance?
Finally, I would say there’s a definite double standard at play.
The Government is very quick to exploit the idea of beneficiaries, student loan defaulters or ACC recipients gaming the system when it suits them.
But as for the wealthy? We apparently accept, in a docile fashion, they’ll always try to avoid paying their fair share of tax - and the Government smiles benignly on.