You know the old saying that there are two things that are inevitable in life – death and taxes. Well, the latter is definitely not “inevitable” if you’re a transnational corporation (TNC). I’ve been regularly writing in Watchdog about TNC tax evasion for several years now, most recently in issue 138, April 2015 (“Dodge City: The Transnationals’ Favourite Place To Do Business”, http://www.converge.org.nz/watchdog/38/01.html). It’s time for an update, because this is a subject that never goes away. Plus, a whole new type of tax evasion by rich foreigners using New Zealand has become known via the tax haven foreign trusts exposed by the Panama Papers’ leak in 2016.

IAG & Apple

IAG/State Insurance won the 2015 Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand. It did so because of its appalling treatment of many of its Canterbury policyholders in the wake of the 2010/11 earthquakes – but tax dodging was also among the grounds for its victory. The nominator wrote: “I draw your attention to the detail hidden in this Press article (19/2/15) which reveals that IAG discloses ‘a significant portion’ of its Canterbury quake costs in ‘the lower tax jurisdiction of Singapore’ and thus paid ‘an unusually low tax rate of 10% in the first half of 2015’”.

The writers of the Judges’ Report noted: “Another means of massaging those financial results is through IAG’s captive reinsurers in low tax jurisdictions: Singapore and Malaysia. Paying amounts as reinsurance to IAG entities in these tax havens reduces the New Zealand operation’s reported profits each year, while bringing those amounts back in later as reinsurance recoveries helps to boost reported profits in poorer years. As IAG reports, the group’s captive reinsurance operation is intended partly to manage ‘earnings volatility’” (IAG [NZ] Holdings Ltd 2015 Annual Report, Note 10, p.26).

Apple, which was an unplaced finalist,made its first ever appearance in the Roger Award in 2015 but it was a worthy contender. The nominator singled out Apple’s “massive tax dodging in New Zealand. The primary evidence was John Campbell’s First Person podcast on Radio New Zealand (29/10/15, http://www.radionz.co.nz/programmes/first-person/story/201776580/first-person-with-john-campbell-apple's-high-ideals-and-low-tax-bill). This is particularly egregious as Apple is currently the most profitable company in the world. Nor is it something confined to Apple’s NZ operations – it dodges taxes globally, to the tune of tens of billions of dollars, including in its nominal ‘home’ country, the US”.

“Of all the transnational corporations stashing their cash in offshore tax havens (and thus out of the reach of any country’s tax men), Apple has by far the biggest offshore cash stash. Massive tax avoidance and massive profitability go hand in hand. I have provided evidence of both its global profitability and tax avoidance, because that provides the context for its NZ tax avoidance. It is necessary to understand the global context; that what Apple does (or rather, doesn’t do) in relation to NZ tax is its standard operating procedure everywhere.

“Apple is far from alone – other transnational corporations that could have been nominated for exactly the same reason include Facebook, Microsoft, Google and Amazon. And I have included ….. an overview of the whole subject, both in NZ and globally, and of what is being done about it by the Organisation for Economic Cooperation and Development. It is staggering to hear the OECD’s Tax Director tell John Campbell that global tax dodging by transnationals totals a quarter of a trillion US dollars. Apple is the biggest and baddest of these transnational corporate criminals”. From the Judges’ Statement: “This giant transnational profits hugely from a lack of State regulation. It is up to our lax, inactive Government to take action on tax dodging and avoidance. Companies are just going to make the most of the Government's negligence. Apple has high market domination, but IAG has even more within its sector”.

Digital Dodgers

So where are things at in 2016? Well, surprise, surprise, the TNCs are still dodging NZ taxes as much as possible. Particularly those that function almost exclusively in the digital world. For example, Expedia, an online booking company, paid only $11,440 in 2014, according to Companies Office records (Press, 28/11/15, “Expedia Rejects Critics”, Richard Meadows and John Anthony).

Facebook paid only $43,000 in that same year (Press, 31/8/15, “Battle Begins On Taxing Foreign Digital Services”, Mike O’Donnell). “Google New Zealand paid $361,000 tax in 2014, even though annual purchases of Google products and services by New Zealand customers are believed to run to hundreds of millions of dollars” (Press, 19/3/16, “Tax Rort Inquiry Would Shed No Light, Says Minister”, Tom Pullar-Stecker).

Mainstream Media Take It Seriously

Transnational corporate tax dodging: business as usual, then. But what has been encouraging in 2016 is that the issue has achieved breakthrough into the mainstream news media (ironically, itself largely owned by TNCs) and has even attracted the ire of the Chief Executive Officer of one of the country’s biggest corporates. The New Zealand Herald investigated the amount of tax paid by 100 TNCs and their New Zealand subsidiaries (18/3/16, “The Tax Gap – Where Do Their Profits Go? How Apple, Facebook And Google Move Their Earnings Overseas”, Matt Nippert).

It was a long and detailed investigation, which was succinctly summarised by Herald columnist Kerre McIvor: “The article revealed that despite 20 of them achieving (2014) sales from New Zealand customers to the value of more than $10 billion, they paid just $1.8 million in income tax after several claimed tens of millions of dollars in tax deferments and losses… had the subsidiaries here reported profits at the same healthy rate as their parent companies, the tax take for us would have been $490m. As Green MP James Shaw put it, that would have paid for a hell of a lot of hip operations” (20/3/16, “Boycott The Firms Not Paying Tax”). Those 20 TNCs declared NZ profits of an average of only 1.3% on their reported NZ revenue. Their parent companies, however, reported an average profit margin of more than 20% on their revenue.

There is nothing new about TNCs dodging NZ taxes. “Settled on Christmas Eve 2009, for $2.2 billion and involving the country’s four largest foreign-owned banks – Westpac, ANZ, BNZ and ASB – this is still believed to be the largest commercial settlement in New Zealand. By agreeing to pay the equivalent of about 80% of the unpaid tax and interest in dispute, the banks avoided potentially large penalties if they lost in court. The case was notable for advice from a PwC senior partner at the time, John Shewan, that his client, Westpac, should be seen to be paying enough tax to satisfy public expectations. He suggested that should be about 15% of annual profits, compared with the corporate tax rate at the time of 30%. Westpac chose to pay at an effective tax rate of 6.5%” (Listener, 9/4/16, Money, “The Missing Billions”, Pattrick Smellie). John Shewan, of course, was the “safe pair of hands” appointed by the Government to investigate foreign trusts in NZ after the 2016 Panama Papers’ revelations.

Spark CEO Break Ranks

What is new is the call by Spark’s Chief Executive Officer, Simon Moutter, for TNCs, specifically the digital giants, to pay their correct share of NZ tax. “Let's be clear. I love Google. And Facebook. And Apple. I don't approve of the way they and other multinational companies who operate here avoid paying their fair share of tax, but they have awesome products and services which I use every day. So no, I'm not planning to boycott anyone…Let's make something else clear. These companies - and the multitude of others that engage in similar international tax strategies - aren't, to my knowledge, doing anything illegal under current laws”.

“This will eventually - and, in the view of many, inevitably - change as our Government participates in the OECD's Base Erosion and Profit Shifting (BEPS) project alongside many other countries. But, the pace of global initiatives like these and the associated changes to tax legislation tend to make progress at glacial speed. I've consistently called on our Government to take more progressive action and lead the way on ending the tax dodging, as has already happened in the United Kingdom and Australia. It's making some welcome moves in the area of GST, but this is just scratching the surface - BEPS is the big issue (http://www.oecd.org/ctp/beps/)”.

“And let's be clear on one more thing: multinational companies already have the opportunity today to pay their fair share of tax in New Zealand. There is no law that forces them to operate with thinly capitalised local companies, to route revenue through offshore entities, or to have massive levels of intercompany expenses to reduce their taxable profits in New Zealand. They make a considered choice when they use such tactics to avoid paying tax here”.

“I reckon it's time for Google, Facebook and Apple to show leadership and start doing the right thing on tax in all the markets they serve. Isn't it just the right thing for these companies to reward our support by willingly making a contribution to the tax base which funds our society? Doing this would be relatively simple for them. They could set up their intercompany charges to leave a New Zealand profit margin per dollar of revenue equal to their global profit margin. They'd then pay 28% (the New Zealand corporate tax rate) on this amount to the IRD and we'd all be happy”.

“So, here's my challenge to the bosses at Google, Facebook and Apple. Ask the Herald for the same space they've just given me and set out your response. And please don't roll out the ‘we simply comply with the tax laws’ claptrap. Let's hear your response as to why you're not prepared to reciprocate the support New Zealanders have offered to your companies by making a fair contribution to the tax base that funds our society” (NZ Herald, 23/6/16, “Spark Boss Simon Moutter Calls On Google, Facebook and Apple To Start Paying Their Fair Share On Tax”, http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11661266).

I’ll bite my tongue here and confine myself to saying that CAFCA could fill a reasonable size book with the transnational corporate crimes we have recorded in the last quarter of a century against Spark, under its infamous former name of Telecom. But hey, if its CEO wants to break ranks and join the chorus of criticism of TNC tax dodging (doubtless for his own corporate PR reasons), who am I to quibble. I have no doubt that he will be regarded as a traitor to his class.

Government Does Nothing

As the 2015 Roger Award judges said: “It is up to our lax, inactive Government to take action on tax dodging and avoidance. Companies are just going to make the most of the Government's negligence”. And even the Spark CEO is calling on it to do something, anything. But it has only gone after the rats and mice. In August 2015 the Government announced that, as of October 2016, digital TNCs will have to pay GST on services they provide in NZ (this has been dubbed the “Netflix tax” and is expected to bring in an extra $40 million a year from taxing things like Amazon e-book sales, iTunes downloads, and subscriptions for streaming TV series and movies). Peanuts! And it refuses to impose GST on physical purchases made outside NZ. That’s in the “too hard basket”, apparently.

How about going after the big boys? Michael Woodhouse, the Revenue Minister, reacted to the NZ Herald’s investigation into TNC tax dodging by rejecting Labour’s call for an inquiry (Press, 19/3/16, “Tax Rort Inquiry Would Shed No Light, Says Minister”, Tom Pullar-Stecker). By June 2016 Woodhouse was “disappointed major multinationals had been ‘deafeningly silent’ in the wake of allegations that some of them had been shirking their fair share of the tax burden…Multinationals may be forced to disclose more information about their tax affairs, amid concerns they are too often bending the rules” (Press, 3/6/16, “Firms’ Silence Disappoints Tax Minister”, Tom Pullar-Strecker).

By July Labour was calling for Inland Revenue to lift its blanket secrecy on big company tax matters. “Labour revenue spokesman Stuart Nash said experts believed New Zealand was missing out on $1 billion to $7b of tax… Inland Revenue has declined to explain the implications of a $36 million tax settlement with Australian publishing company APN News & Media that was agreed on Friday. Inland Revenue also stonewalled on concerns – denied by Vodafone NZ – that Vodafone may have reduced its New Zealand tax bill by paying excessive interest on debts to its British parent”.

“It has also refused to provide assurances on Microsoft's decision in 2014 to transfer ownership of its New Zealand subsidiary from the United States to Luxembourg. OECD Tax Policy Director, Pascal Saint-Amans, said at the time Luxembourg was under ‘enormous pressure’ to clamp down on harmful tax practices, though Microsoft denied its move was tax-related. In each case Inland Revenue said its hands were tied by ‘taxpayer secrecy’. But Nash said a law change in 2012 meant Inland Revenue could and should get into the specifics of each of the three issues”.

“Clause 81 (1b) of the Tax Administration Act gave Inland Revenue the ability to comment on individual companies' tax affairs if its Commissioner, Naomi Ferguson, considered that was reasonable to support the execution of her duties. She described one of those duties in a speech in 2014 as ‘maintaining trust’ in the tax system. Nash said that meant that Inland Revenue could justifiably respond to questions”.

“‘There is no real public interest in knowing what Joe Bloggs Plumbing has done. But I would argue there is massive public interest in understanding what Facebook, Vodafone and Google are doing in terms of aggressive tax planning’” (Press, 1/7/16, “Push To End Tax Veil Of ‘Secrecy’”, Tom Pullar-Strecker, http://www.stuff.co.nz/business/industries/81610936/IRD-urged-to-lift-veil-of-secrecy-over-big-company-tax). Nash’s call was supported by Massey University tax expert, Deborah Russell, who was a Roger Award judge in 2015 and is again in 2016.

But the Government has made no specific law changes to crack down on TNC tax dodging. “In particular it has not so far followed moves by Britain and Australia to impose a punitive ‘diverted profits tax’ imposed on multinationals that used contrived arrangements to cut their tax bill. The Government has instead put its faith in a massive package of tax reforms known as the BEPS initiative, which is being spearheaded by the Organisation for Economic Cooperation and Development”.

“The goal of BEPS is to eliminate non-taxation globally by closing the loopholes that have allowed technology companies in particular to route hundreds of billions of dollars of profits to tax havens. (Revenue Minister) Woodhouse said the Government had 15 separate programmes of work to implement recommendations developed as a result of the BEPS programme” (Press, 3/6/16, “Firms’ Silence Disappoints Tax Minister”, Tom Pullar-Strecker). Both the UK and Australia have Rightwing governments of similar ideological ilk to New Zealand’s. That didn’t stop them passing their own national laws to tighten up on TNC tax dodging. The UK law is popularly known as the “Google tax”.

BEPS: Attempt At Global Solution

International action by states is the only way to deal with transnational corporate tax dodgers. In September 2014 the OECD released seven recommendations for its Action Plan on Base Erosion and Profit Shifting (BEPS). They included improved transfer pricing requirements and preventing the abuse of double tax agreements (transfer pricing is where a TNC declares a loss in a country with a higher tax rate and its profit in a country with a lower one). Other measures include:

“Country-by-country reporting: TNCs will have to report to tax collectors the geographic distribution of taxes, revenues, number of employees and assets for each country where they operate. This is a considerable step forward, because it would help national tax collectors have a comprehensive view of the TNC and allow them to spot any inconsistency in the allocations. The OECD only considers filing of the reporting with tax administrations”.

“Public disclosure, or even partial disclosure, is not under consideration, despite being required already by other similar reporting frameworks in Europe and in the United States….” (Global Labour Column 188, November 2014, “The G20/OECD Base Erosion And Profit Shifting Action Plan”, Pierre Habbard, http://column.global-labour-university.org/2014/11/the-g20-oecd-base-erosion-and-profit.html#more).

In 2014, the OECD was confident that BEPS would soon come to pass. “Hopes are rising that multinational companies operating in New Zealand may soon be paying a fairer share of tax. The French official leading the global clampdown on multinational tax rorts says the scrapping of the notorious ‘double Irish’ tax loophole shows aggressive tax planning is on the way out. OECD Tax Director, Pascal Saint-Amans, said tax planning had become the core strategy of some companies, which were competing on how much tax they could avoid rather than on the quality of their products”….

“The BEPS project appeared to chalk up an early victory recently when Irish Finance Minister Michael Noonan announced the country would call time on the ‘double-Irish’ rort by 2020... Ireland's decision showed the BEPS project was being taken seriously and a game-changer, Saint-Amans said. ‘It is a recognition that the environment has changed and that tax planning will not be as it used to be, in the future. Companies should of course optimise and should plan, but to reduce marginally the tax burden, not to massively reduce it as the core element of their strategy’, he said”…

“Saint-Amans said the OECD was on track to complete the BEPS project next year (2015) and told Fairfax he believed it could force Ireland to plug the ‘double-Irish’ loophole earlier than 2020. But he said that belief should be seen in context. ‘The overall tax planning of companies and what has been happening in the past 20 years is coming to an end, so it is not just about phasing out the ‘double-Irish’; it is about rethinking the overall strategy and do they need to rethink the overall strategy before six years? Oh yes’”.

“He downplayed suggestions multinationals might simply switch to lesser-known loopholes, arguing that would not be simple. The same week Ireland moved on the ‘double-Irish’, Switzerland announced it would also put an end to tax regimes that had been considered harmful, he said. ‘The Secretary of State of the Netherlands has written to the Dutch Parliament to say it would have to make changes in 2015. Luxembourg is under tremendous pressure. It is not the case that there's one thing closing down, so they will shift to another country. All the countries are changing’”.

“Saint-Amans said that assuming the BEPS project was successful and put an end to tax loopholes, that would still not mean countries would stop competing with one another by offering lower corporation tax rates in a bid to attract multinational business. Ireland's standard corporation tax rate is 12.5%, half the OECD average, while New Zealand's rate is 28%, for example. ‘What I would foresee is, if we put an end to double-non-taxation, tax competition will not go away. A number of countries may reduce their tax too, which is fine, so long as activities are taxed where they take place’, Saint-Amans said” (Press, 27/10/14, “Multinationals Feeling Heat On Tax Rorts”, Tom Pullar-Strecker, http://www.stuff.co.nz/business/industries/10665249/Multinationals-feeling-heat-on-tax-rorts).

Where Has BEPS Actually Got To?

“The Frenchman spearheading the OECD's unprecedented global crackdown on multinational tax rorts expects success will result in lower rates of company tax, benefiting smaller firms. The Organisation for Economic Cooperation and Development (OECD) finalised recommendations (in October 2015) aimed at preventing an estimated $US100 billion to $240b of corporation tax earned by the likes of Google, Apple and Facebook slipping through tax departments' fingers each year”.

“The publication of the OECD's recommendations, which PwC New Zealand tax partner Geoff Nightingale labelled an ‘amazing achievement’, marks the culmination of a two-year drive by major economies to bring about the biggest change in international tax law for nearly a century. Former Google Chief Executive, Eric Schmidt, infamously defended the accounting tricks that had allowed it to funnel billions of dollars of profits to Bermuda each year to the British media in 2012, saying it was ‘called capitalism’”.

“…OECD Tax Policy Director, Pascal Saint-Amans, denied the crackdown represented a crusade by ‘high-tax countries’ to defend their ways of life against Silicon Valley's libertarianism. ‘I think this has been a bipartisan project from both Rightwing conservative people thinking ‘small government is good', to indeed the Leftwing’, he said. Saint-Amans believed the effort to stamp out ‘non-taxation’ was likely to be followed by many countries reducing their rates of corporation tax”.

“That meant tax departments would not become $U100b-$240b better off as a result of the OECD's work. But it would mean a ‘positive spillover for small and medium-sized enterprises which will see their tax burden reduce because they will now share it with multinationals’, he said. ‘Today, you have the choice of paying 40% tax in the US, 12.5% in Ireland or 0% in Bermuda. Well, you just pick up the right tax lawyer and you get zero in Bermuda. That will change. These types of schemes are over and then you are back to fairer tax competition between countries’".

“The OECD's highly technical recommendations to address tax ‘base erosion and profit shifting’ (BEPS) will still need to be implemented by member states. New Zealand’s (then) Revenue Minister, Todd McClay, said he expected to introduce the necessary legislation in New Zealand before the end of next year (2016) after what he promised would be extensive consultations. McClay said people were ‘always going to look for holes’ but he was optimistic the rule changes would have their desired effect, which is to prevent multinationals exploiting differences between country's tax laws to avoid paying tax anywhere”.

TNC Lobbyists Called For Funding To Be Cut Off From OECD

“Both McClay and Nightingale said the OECD had delivered its mammoth package of reforms more quickly than almost anyone expected. Saint-Amans said multinationals had been lobbying behind the scenes, noting the OECD received ‘12,000 pages worth of comments’ prior to finalising its proposals. ‘On “the Hill” in the US there are a number of people advocating for de-funding the OECD which is a pretty strong lobbying exercise’ he said”.

“But the pace of progress does seem to have caught critics somewhat on the hop. ‘It is true (the lobbying) came a bit late because most people were sceptical anything would happen’, Saint-Amans said. ‘Many people have bet against the delivery of a significant package’. He said it didn't yet feel like ‘job done’. A few ‘small leftover issues’ still need tying up next year (2016). …The OECD and G20 (Group of 20 countries) have agreed to ‘extend their cooperation’ on BEPS to 2020, which gives some indication as to the timeframe in which they believe the results of the OECD's endeavours will become evident”.

“OECD Secretary-General, Angel Gurria, said in a statement that profit-shifting had been ‘eroding the trust of citizens in the fairness of tax systems worldwide’. It seems no-one expects that trust to be restored overnight. Saint-Amans admitted it was a good question how taxpayers would know the BEPS project had been successful. The OECD's reforms were complex ‘precisely to avoid loopholes’, he said, and that meant the proof of the pudding can only be in the eating”.

"’We are going to have indicators that should measure the impact. Secondly, I think we are going to see a number of restructures from businesses; these may be under the radar for the public but it will be seen by tax administrations’. Indeed, Saint-Amans said that latter process had already begun. Some of the multinationals that have copped the most criticism for aggressive tax planning, such as Amazon and Starbucks, have already begun changing their ways, he said”.

"’These are two iconic companies that have already announced a deep restructuring of their tax planning to be much less aggressive. Starbucks has dismantled its Dutch entity to locate all its activity. Amazon has declared permanent establishment in most of the countries in which it operates where it had not done so before. You have many more companies in discussion with tax authorities to redesign their tax planning’" (Press, 8/10/15, “OECD Rort Clampdown ‘No Crusade’, Tom Pullar-Strecker, http://www.stuff.co.nz/business/72770546/oecd-tax-boss-pascal-saintamans-forecasts-company-tax-rates-will-fall-as-multinational-rorts-are-stamped-out).

Make The Rich Pay

The fact remains that New Zealand’s government has, thus far, done SFA to its own domestic laws in relation to cracking down on TNC tax dodging in this country. I’ll quote the 2015 Roger Award judges again, because it’s worth emphasising the point: “It is up to our lax, inactive Government to take action on tax dodging and avoidance. Companies are just going to make the most of the Government's negligence”.

The last time I wrote about this subject (Watchdog 138, April 2015 (“Dodge City: The Transnationals’ Favourite Place To Do Business”, http://www.converge.org.nz/watchdog/38/01.html), I concluded: “At least it’s (i.e. the BEPS Action Plan) a start, a first step to deal with something that is such a huge international scandal that even the world’s richest countries (including New Zealand, as an OECD member) have finally got pissed off about it”.

“This whole thing illustrates the fact to which sovereign governments have wilfully turned a blind eye: namely that transnational corporations, some individually but certainly as a collective economic/political entity, are more powerful than States, even the biggest and richest ones. TNCs are simultaneously stateless and a State unto themselves. Nobody gets to vote for them, but what they do adversely affects all of us, both nationally and internationally”.

“Belatedly, sovereign governments, who are, at least theoretically, answerable to their people as voters and taxpayers, have decided to start doing something about it. What is required is a practical domestic and international enforcement of that self-evident, time honoured maxim: ‘Make the rich pay!’ That’s where the money is going to come from, and about bloody time too”. That conclusion is still 100% valid today.

I started this article by citing the two “inevitable things” in life, namely death and taxes. The latter are certainly not inevitable for TNCs, but let’s take the optimistic view and hope that current moves – internationally, if not nationally (or, rather, Nationally) – will lead to the death of the tax dodging rorts and scams these transnational corporate bastards have shamelessly used everywhere to privatise their profits and socialise their costs. They depend on nations, states and societies for their existence and profit, yet contribute next to nothing to the costs of running them. May these Scrooge McDucks drown in their own moneypits.

Panama Papers Expose Foreign Trusts’ Tax Dodging Racket

The global revelations exposed by the 2016 hacking of the Panama Papers (so named because the hacked law firm, Mossack Fonseca, is based in Panama) are about tax dodging by foreign individuals but not transnational corporations (that’s where the real money is, and TNCs are CAFCA’s core issue). But this country (among many, many others around the world) being used to stash and hide the wealth, including ill-gotten gains, of the super rich 1% from the tax authorities in any country is definitely of interest to us.

The revelations caused uproar around the globe, with its victims including national leaders and a whole raft of other high profile people (all of whom were very keen to keep their loot very low profile). It exposed that fact that New Zealand had developed a cosy little multi-million dollar cottage industry of foreign trusts, which were kept 100% secret (only Australia had insisted on being told about its nationals hiding their money here. The result was a marked drop in Aussies using NZ-based trusts).

Such trusts are a perfect vehicle for money laundering and hiding the proceeds of crime and corruption. It was a nice little earner for the NZ lawyers specialising in foreign trusts – they touted NZ as a safe, tax free and “no questions asked” haven for their clients’ money. Prime Minister John Key adopted his standard response i.e. “I’m pretty relaxed about that, there’s nothing to worry about”. But his credibility on the subject was undermined, in April 2016, when it was revealed that his personal lawyer had lobbied the Government to advise against a crackdown on foreign trusts.

Anyone who called New Zealand a “tax haven” was told to wash out their mouth with soap by John Key and Bill English, but if it walks like a duck and quacks like a duck, then it is a duck. And as it became an increasingly embarrassing duck for the Government, Key adopted the next standard response of all politicians when caught with their pants down – order an inquiry. This was conducted by one of the neo-liberal ideologues’ safest pair of hands, namely tax expert John Shewan.

To his credit, Shewan did a quick and damning job. His report, released in June 2016, concluded that NZ’s foreign trusts regime was “not fit for purpose” and was inflicting damage upon the country’s reputation for financial transparency and clean government. He made a number of recommendations which included radically expanded disclosure rules (although not to the NZ media or public) and tightened up rules on registration, anti-money laundering rules and more information-sharing between Government agencies. In the space of a few months the Government had gone from dismissing the whole thing as nothing to get excited about, to announcing (in July) that it would speedily implement all of Shewan’s recommendations. Funny, that.

Thank You, Nicky

And TVNZ and Radio NZ are to be congratulated for their work on the Panama Papers, and, most importantly, their openly acknowledged collaboration with Nicky Hager. For far, far too long Nicky has been a prophet without honour in his own land and routinely sneered at as “a conspiracy theorist” by both politicians and their media glove puppets. At long bloody last Nicky is now described as an investigative journalist (one of the best in the world) and is credited as a partner with TVNZ (and Radio NZ) every time they break another Panama Papers story. Let’s have more of it.