National has revealed its response to the Shewan inquiry into the tax system, announcing that it will adopt all of its recommendations:
Foreigners setting up tax-free trusts in New Zealand will soon have to disclose their identity and any beneficiaries, after the Government agreed to sweeping changes in the wake of the Panama Papers.
Finance Minister Bill English and Revenue Minister Michael Woodhouse said today that they had agreed to all of the recommendations in the Shewan Inquiry into foreign trusts.
The recommendations were "sensible" and "well-reasoned", English said, and by acting on them the Government would help strengthen disclosure rules and protect New Zealand's reputation.
Yay, right? Well, no - because those recommendations were only half measures, which still leave us with secrecy by default. Oddly, National's register won't be available to IRD, and it will still be searche donly in response to inquiries, rather than automatically shared with foreign tax agencies. Meaning that we're still in the absurd situation that in order to discover tax cheating, other countries have to ask (and know the specifics). It's a catch-22 seemingly designed to prevent enforcement.
And there's a reason for this: because when you get down to it, National is on the side of the tax cheats. They're a party for the rich, who view taxes as an imposition rather than the price you pay for belonging to a civilised society. Their default attitude to people laundering money through Panama and the Cook Islands is to want to do it themselves, rather than stamp it out and make these parasites pay their way. So its not surprising that they're only interested in half measures. Like climate change, like refugees, like housing, they're doing the least they think they can get away with.
What they should be doing is being a good global citizen and putting the New Zealand foreign trust industry out of business. And the way to do that is with an open, searchable register, allowing the public and NGOs to trace who owns what, combined with automatic data exchange with other tax authorities, so foreigners can't use us for evasion. We should not be part of this problem. And if National isn't going to solve it, they should get out of the way and make room for someone who will.
