‘Jersey of South Pacific’ title insults

David Shearer MP – Jersey of South Pacific-David Shearer

We have consistently been either first or second in Transparency International’s ranking of most honest countries.

Not many countries can say that.

It is a part of what makes New Zealand a great, uncomplicated place to live.

Backhanders, bribes and hiding wealth goes on in other countries and I would guarantee those of you reading this will have, like me, experienced it personally.

Notorious comparison

So, I felt unsettled when (Prime Minister) John Key said that he wanted New Zealand to become an offshore finance hub – ‘the Jersey of the South Pacific’, as he put it.

Why on earth would we want to emulate a place with a notorious reputation as a tax haven, a place where tax dodgers hide their wealth?

When the rich hide their wealth – often to avoid paying their share of tax – it means money that would have contributed to society through doctors, hospitals, public transport, schools and a good education for our children is lost.

So why would we want our country to be used as a hideaway for the corrupt?

But Mr Key has pursued his plan – including passing legislation which law firm Chapman Tripp said would ‘make New Zealand an attractive alternative to Luxembourg, Ireland or the Caymans’ for people looking to dodge tax.

Tax Haven

As the Panama Papers show, New Zealand is now a tax haven alongside Jersey and countries renowned for corruption. In fact, New Zealand is mentioned 60,000 times in the papers, which reveal how the mega-rich hide their assets and dodge tax.

A few weeks ago, Finance Minister Bill English argued that we needed to crack down on the multinational companies that are not paying their fair share of tax in New Zealand. Now, he is saying that there is nothing wrong with people from all over the world using our country to conceal their wealth.

He maintains that there is no problem and nothing we need to change. But there is. We need to clamp down on these activities just like United Kingdom and France are doing right now.

Unfortunate pattern

Instead, this government follows an unfortunate pattern. From the Sky City deal to the Saudi sheep bribes, our current government does not seem to value the honest reputation that New Zealand has built up over generations.

This year, New Zealand slipped from top position on the honesty tables to fourth.

I have little doubt this will see us slip down even further.

And what benefit do we gain for selling our reputation? Around $24 million a year in fees for legal firms and accountants administering offshore accounts and trusts.

It seems like a very small reward for undermining the reputation that carries across almost every economic activity in which we are involved.

Either we forgo that money and our services are not as they should be, or else ordinary citizens pay more in tax to maintain services because we have got wealthy freeloaders not declaring their full incomes.

Inquiry needed

New Zealanders want to be assured that everyone is paying their fair share of tax, and that we as a country are upholding our role as good global citizens.

The only way to ensure that is a full, open and independent inquiry.

It needs to be led by someone who will ask the simplest of questions – why do we have laws that allow this country to be used by offshore tax dodgers? And, how can we get back to our traditional position as the least corrupt country in the world?

David Shearer is an elected Member of Parliament from Mt Albert in Auckland and Labour Party’s spokesman for Foreign Affairs.

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