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.
