We now go live to the Prime Minister’s post cabinet briefing.
JOHN: Thenk yoy all for coming. We have a lot to get through so who wants to kick it off?
JOURNO 1: I will… are you worried about the latest Panama Papers revelations?
JOHN: No… not at all. Not in the slightest. No. Absolutely not. No. Not. No not.
JOURNO 2: …well… is New Zealand a tax haven?
JOHN: No not.
JOURNO 3: But Nicky Hagar says it is.
JOHN: Well he would. He’s a left-wing conspiracy nut.
JOURNO 2: …says who?
JOHN: Says me. I say it.
JOURNO 3: He’s not the only journalist working on this story.
JOURNO 1: Yeah… there’s TVNZ and Radio NZ….
JOHN: Well…. they’re conspiracy nuts too.
JOURNO 2: All of TVNZ are conspiracy nuts?
JOHN: Yup. Nuts. Lotta them. And Radio NZ too. Don’t forget those guys…
JOURNO 3: And the Guardian, Süddeutsche Zeitung, and the International Consortium of Investigative Journalists?
JOHN: Yep… every single one of those is a left-wing conspiracy theorist.
JOURNO 1: Who says they are?
JOHN: I do… I say it is so, so it is so. Look, at the end of the day, who are you going to believe? Some guy who I just said was a tin-foil hat wearing fruitcake or me? The only person in this room with extensive knowledge of the inner workings of secret foreign trusts? I know who I’d trust.
JOHN: Me!! The answer is me. No if you’ll excuse me, I’ve got to go and watch a focus group.
In a move to try to reduce the pressure on the government following the release of the Panama Papers, John Key has held a short press conference at the Beehive to say a few things on the issue. We have a transcript of the briefing.
KEY: Hello all. Thenks for coming. I just wanted to clear up a few things about New Zealand tax law that has come under a bit of fire in the last week or so. First of all… New Zealand is not a tax haven. There is nothing in our tax or trust laws that mean we are definitely not a tax haven.
SOPER, ZB: What about the fact many of the New Zealand trusts in the Panama Papers are blind trusts?
KEY: Well.. perhaps some of those are a bit secret, but that doesn’t mean we are a tax haven.
HOSKING, ZB: I think you’re lovely.
KEY: Thenk yoy Moyke, and in answer to your question, yes I am.
WATKINS, STUFF & THAT: Do you have any money in any of the blind trusts that the Panama Papers mention?
KEY: Absolutely not.
WATKINS, STUFF & THAT: But what about the money you’ve deposited with that lawyer? You know.. the one that sets up blind trusts.
KEY: I think you’ll find if you say any more they’re going to sue your bottoms. You know they’re lawyers, don’t you?
GOWER, NEW SHUB: But you do have money deposited with that lawyer?
KEY: Yes. But I don’t know what he’s done with it?
SOPER, ZB: Where is it then?
KEY: With the lawyer.
GOWER, NEW SHUB: In his office?
KEY: Which one? The New Zealand one or one of the other… more tropical ones?
WATKINS, STUFF & THAT: Any office. Has he put the money in a blind trust?
KEY: I don’t take a blind bit of notice what he does with the blind trust… (slight pause for effect, but gets nothing) …oh come on! That was gold.
KEY: Tough crowd.
GOWER, NEW SHUB: So you are saying you’ve never benefited from any money deposited in a blind trust in any country around the world?
KEY: Well… I worked in finance in the ’80s…
SOPER, ZB: Is that a yes?
KEY: Yeah, nah… that’s a “I worked in finance in the ’80s.” Thenks for coming.
*press conference ends*
With the release of the Panama Papers this week, MyThinks believe it is prudent to get in touch with a tax specialist and talk with them about what the papers mean for Western governments and their collection of tax in the globalised marketplace. Professor Archibald Thief is a taxation expert who advises governments and businesses around the world on their tax obligations. He has written a briefing paper for MyThinks that will allow our readers to understand just a little bit more about international tax and global finance.
As we move into an international global marketplace, it is prudent on governments and citizens to be more aware of how the international economy all works.
Think of the world as a giant merry-go-round. Every country is a horse. Some of those horses go up and down, some of them don’t. If you get on one that goes up and down you might be able to rip off its ear and stuff money inside it’s body before gluing the ear back on. Once you get off the merry-go-round the this money remains hidden inside the horse’s body, away from the prying eyes of other riders and the merry-go-round operator, until such time as you want to get on the ride again, retrieve your money, and buy a Mr Whippy or a Picasso.
Having read that last paragraph, I am certain that even the most lay of people will now understand international tax law and its implications for the modern economy.
If, however, you don’t, here are some brief definitions.
Tax Evasion: Where someone illegally hides their income in order avoid paying their tax obligations.
Tax Avoidance: Where someone legitimately works to minimise their tax obligations.
I realise those two definitions appear to be somewhat the same (you will see I have used the word “avoid” in my definition for “evasion” even though they are two separate things). It’s important to remember that evasion is totally illegal and avoidance is totally legal.
Another way of thinking about it is this: I avoid tax; He evades tax.
In other words, politicians, business leaders, and the ruling elite all avoid paying tax (legal), whereas tradespeople who do cash jobs, beneficiaries and the lower and middle classes all evade tax (illegal).
As I said to John Key at our last off-the-record meeting in the Bahamas, “all you have to tell the public is everything you are doing is legal. You’ll be absolutely fine. Voters love being told by their politicians that something they find repugnant is technically legal.”
I hope that has cleared a few things up. Remember, it’s not evasion if you can afford to hire an accountant to bend the law.
Professor Archibald Thief.
What follows is a transcript of a speech given by John Key to a breakfast event to the New Zealand Initiative – a right-wing think-tank whose membership includes some of the country’s wealthiest tax avoiders.
Good morning. Thenks for coming. I’m John Key and I’m the Prime Minister.
I want to talk about New Zealand. New Zealand is a country. We have been a country since we were discovered hundreds of years ago by a Dutchman from Old Zeeland. Who would have believed that several hundred years later we would be sitting here eating these nice foods and wondering about out futures.
New Zealanders currently pay tax. Lots of tax. Too much tax. Unless you’re one of us, in which case you have options. Options to forego the taxation regime of the country you’re living in by “living” in another country or, as is often the case, setting up your “business” as a trust in another “country.” And by “business” I mean house, income and business.
Some people think this is a bad thing. Somehow it is immoral or wrong to minimise your tax by undertaking questionable transactions through a Panamanian law firm.
What a load of nonsense.
Panama is a fantastic country. Bronagh and I went there on holiday not long ago, signed a few papers, and came home pretty smartly. It’s a beautiful part of the world.
New Zealand is also a beautiful part of the world. Which leads me to ask this question: why can’t we be set ourselves as a sanctuary for people looking to diminish the imposition of taxation on their lives? Why can’t the wealthy who live in other countries email a random law firm somewhere in Central America to set up a trust in our beautiful country?
Well it turns out they can. Ever since the National Party came to power in 2008 we have worked tirelessly to create a situation where New Zealand welcomes millions and millions and millions of questionable dollars from thousands of people all around the world so that they are hidden from the customs and excise people in their own country.
These are great days if you’re rich like you or I. Take me, for example. I’ve got millions of dollars. Some of it is in New Zealand, some of it isn’t. Or is it? It might or might not be? Even as I talk about it, it’s important not to deliver too many clues. Clues lead to questions. Questions lead to investigations. Investigations lead to things being uncovered. Just look at David Cameron. He answered too many questions. Far too many questions.
Just look at how I’ve handled this week. I’ve welcomed New Zealand’s involvement in the world of finance. I’ve celebrated our openness and transparency when it comes to keeping secret trusts secret. Our secret trusts are the most transparent in the world.
So next time you’re thinking about hiding your money from the taxman, or laundering your cartel millions, then why not try little old New Zealand? The home of the transparent secret trust.