Sunny Hideaways For Shady People: Tax Havens are a very big news right now, but how big a deal are they for New Zealand? Much has been made of the 60,000 references to this country in the Panama Papers. That sounds like a lot. But in a dump of 11.5 million documents, 60,000 references is actually a very small number indeed. Assuming there is only one reference to New Zealand per document (which hardly seems likely) our country’s name is to be found in just 0.005 percent of the documents leaked.
THE PANAMA PAPERS are a big deal. No sensible person would attempt to argue otherwise. Thanks to the leaking of upwards of 11.5 million electronic documents the world is now in possession of incontrovertible proof of the global elite’s perfidious allergy to paying tax. What had been the stuff of thrillers by John Le Carré and John Grisham, has become the substance of nightly news bulletins.
But how big a deal are the Panama Papers in New Zealand? Much has been made of the 60,000 references to this country in the leaked documents. That sounds like a lot. But in a dump of 11.5 million documents, 60,000 references is actually a very small number indeed. Assuming there is only one reference to New Zealand per document (which hardly seems likely) our country’s name is to be found in just 0.5 percent of the documents leaked.
I would hazard a fair amount on there being a considerably larger number of references to the Cayman Islands, the Virgin Islands, the Turks and Caicos Islands and the Cook Islands in the Panama Papers than there are to the islands of New Zealand.
It is also important to note that the warnings that have been issued to the New Zealand Government by an assortment of both public and private bodies have tended heavily towards the contingent. If the powers-that-be do not act quickly, there is a risk that New Zealand’s reputation as one of the world’s least corrupt and most transparent countries might be damaged. Which suggests we’ve still got quite a way to go before we get to count ourselves among the Caymans, the Virgins and the Turks and Caicosses.
Which is not to say that the 12,000 overseas trusts currently availing themselves of this country’s less-than-robust disclosure regime are all squeaky clean. On the contrary, there’s a better than even chance that a newsworthy number of shady characters have been using these instruments to hide a whole lot of even shadier goings-on.
As the International Consortium of Investigate Journalists and their colleagues in the global news media pore over the Panama Papers, we are bound to discover a disappointing number of New Zealand individuals, businesses and organisations in the frame.
Will our own Prime Minister be among them? Is John Key about to suffer the same fate as the erstwhile Prime Minister of Iceland, Sigmunder Gunnlaugsson, or the present, increasingly beleaguered, Prime Minister of the United Kingdom, David Cameron?
Well, John Key is a very wealthy man, and if the Panama Papers have shown us anything it is the extraordinary lengths to which very rich people will go to protect their financial affairs from the scrutiny and criticism of those who are not very rich. For years, rumours have circulated that Key is worth considerably more than the $NZ55 million he publicly acknowledges. If the rumours are true, then the rest of his fortune may well have been salted away where the sun shines and the trade-winds blow. But by whom? Mossack Fonseca isn’t the only law firm that specialises in keeping prying eyes away from very rich people’s financial information. And you can bet that the others are working day-and-night to beef-up their security.
Personally-speaking, I’d be surprised if our Prime Minister goes the way of Gunnlaugsson or Cameron. Key has spent his whole life working towards the position he now holds, and all along the way he has been extraordinarily careful to avoid doing anything that might come back to bite him when he was Prime Minister. While the other London currency traders were winging their way across the Atlantic for a weekend of drug-fuelled debauchery in Las Vegas, John Key was heading home for a quiet weekend with Bronagh and the kids. Would he put everything he’s worked for so carefully at risk by squirrelling away millions in some Caribbean tax haven? I can’t see it, myself.
Then again, who among the very rich could have foreseen the acute danger into which this age of digitalised information storage, retrieval and communication was leading them? John Key? Many New Zealanders have wondered at their Prime Minister’s interest (some would say obsession) with cyber-security, and noted his extreme hostility towards individuals and groups accused of abusing and/or violating the supposedly secure zones of cyber-space. Exactly what was driving Key’s inflated disquiet about the security of secret information has never been very clear.
As the tens-of-thousands of secrets contained in the Panama Papers are revealed to the world, however, there will be more than a few Kiwis who will insist on ending the above paragraph with the words – until now.
This essay was originally posted on The Daily Blog of Tuesday, 12 April 2016.