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Peters - Speech On Winebox

Extracts from an address by Rt Hon Winston Peters to Greypower, at Rugby League Clubrooms, Fitzherbert Road, Wainuiomata

Theme: “The Mission is no longer impossible – collec the hundreds of millions owed to New Zealand!”

About five and a half years ago in Parliament, I produced a box full of papers that covered the transactions of a group of New Zealand companies in the Cook Islands tax haven.

This later became known as the Winebox case, and this is what you have been hearing and reading about over the past five days.

Some of you are probably wondering why this case has gone on for such a long time. I have asked myself that same question many times.

Others of you are probably wondering why I am persisting with this issue – and why the case did not close years ago.

And some people are probably just confused about the whole issue.

It is very complicated – but to put it in simple terms – a group of rich and powerful people decided to do some tax dodging.

In one case for example, they set up complex systems under which the Cook Islands government was paid to issue tax receipts.

These companies then claimed on these tax receipts back in New Zealand.

The one that you have been hearing about was called the Magnum case. We concentrated on only the one case in the Court actions because it was an EXAMPLE of what was happening.

In the Magnum case, the Cook Islands government issued tax receipts for two million dollars in return for a payment of fifty thousand dollars.

The High Court last week said the Winebox Commissioner got it wrong when he said that this was not fraud.

This Magnum case was only one of dozens of such transactions.

The New Zealand people lost hundreds of millions of dollars through these schemes, and no action was ever taken against the companies involved.

This money was desperately needed for the country’s social spending.

Recently, the Government decided that national super should be slashed from 65 per cent to 60 per cent of the average wage - because there is no money.

Why should the elderly live in poverty while the Government’s friends don’t pay their taxes?

There is no money for a national diabetes screening programme – despite the fact that it is a growing problem for particularly our Maori people.

There is no money to fund the nuclear veterans case against the British government.

There is no money for a national register for recording the immunisation of our children against Third World diseases.

There is no money to fund all the operations needed by New Zealanders in public hospitals.

Many students have huge debts because there is not enough money to pay for their education – and they can’t get jobs when they graduate.

So, the reality is that we need to collect the taxes, that these corporate tax dodgers avoided paying through the use of very dubious schemes.

The Labour Party has recently said that it will raise taxes on incomes above sixty thousand dollars.

There is no need to raise any taxes in New Zealand.

All the IRD needs to do is to ensure that what is owed gets paid. It’s as simple as that.

If we forget about the tax money that is owed as a result of the Winebox transactions, we are sending a signal to the world that if you want to set up a company and come and plunder New Zealand and not pay your lawful taxes – we won’t stop you.

This is why the back taxes have to be paid – and this is why the Winebox case won’t go away.

When we try to get some action, and some tax paid, the problems start.

The people behind these tax schemes have a lot of friends in Parliament.

These people felt that they were above the normal rules that the rest of us have to live by.

The Inland Revenue Department apparently thought the same, and ignored the rules IT was meant to work to as well, despite receiving clear guidance from the High Court, the Appeal Court and the Privy Council.

The decision on Friday means that the Winebox Report is not worth the paper it was written on – and the people of New Zealand are still owed hundreds of millions of dollars in lost taxes.

The time has come for that money to be paid.

It is only fair that we all work and pay our taxes by the same rules.

That is one of the major problems with our country.

We once had a sense of fair play – and we were all equal in the eyes of state agencies.

Unfortunately Inland Revenue believes it can batter the “little people” into submission, but when it is up against the big players it just walks away.

A number of politicians have leaped to the defence of these tax dodgers and are dragging all sorts of red herrings across the trail.

But sometimes the arm of coincidence reaches out to help.

In the Wellington District Court yesterday, a Wellington lawyer called Gordon Ralph Stewart was called to give evidence as a witness in a fraud case.

Under cross examination he said that he had been the company secretary of European Pacific, “the most famous tax avoidance facilitator in New Zealand” – and had been involved in complex legal documents which had baffled the Winebox inquiry.

He also said in evidence that a piece of paper that the defence wanted was probably still in his MONACO office.

Why would he want an office there ? For the view?

It was European Pacific which did the Magnum deal.

Why doesn’t the Inland Revenue Department ask Mr Stewart what went on?

He’s just down the road!

This case is an affront to all decent New Zealanders and it has to be cleaned up.

As a result of the Winebox case, $140 million has been reassessed, but there are still huge sums outstanding.

Across the Tasman, the Tax people believe that tax clawed back from the corporate clients of the Cook Islands might top one point five billion dollars.

In Japan, the tax officials believe that tax revenue list from the so-called JIF deals alone was almost $200 million New Zealand dollars.

In this country, it is conservatively estimated that up to half a billion dollars is still outstanding from Inland Revenue wrongfully interpreting the law.

We respectfully suggest that the cost of an economy air fare from France or Zurich is only $1320.

Some people should be getting on a plane immediately and they should be publicly explaining to New Zealanders what they did.

And they should be bringing some tax money with them.
And if you want to know why certain politicians are out there defying legal gravity, arguing that nothing went wrong, and that we should stop pursuing these corporates, then I suggest that you should go to their meetings and ask them to open their books on corporate donations to their party funds.

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