Winston Peters: There’s More Embarassment to Come in Panama Papers

New Zealand First Leader Winston Peters says there will be more embarrassing revelations to come for New Zealand and banks that operate here, in the continued fall-out from the so-called Panama Papers leak.

Mr Peters is calling for a Commission of Inquiry into New Zealand’s role as a tax haven, as suggested by the papers, and says “only a fool” wouldn’t think the reputational damage from this week’s document dump isn’t very serious for New Zealand.

“It’s got to start with the prime minister, because he has been in flat denial,” Mr Peters told Q+A’s Corin Dann.

“You are going to see enormous fallout in the next few weeks as, when the disclosure happens, with that number of references to New Zealand, we know that this country has been used as a tax haven. Now, that is an enormous reputational risk for a country like ours. Remember, the Cook Islands, we know what the Cayman Islands do, the Jersey Islands and all round the world. But we are not a country with that reputation, and that is why there is going to have to be a serious commission of inquiry.”

END

Q + A
Episode 95
WINSTON PETERS
Interviewed by CORIN DANN

CORIN Now, in New Zealand, this issue will not die away either, and that is because we do feature strongly in the same leak as a place where secretive trusts operate. In fact, one report suggested 60,000 references in those documents to New Zealand. Now, we are joined by NZ First leader Winston Peters for his take on New Zealand’s role in this scandal. Good morning to you, Mr Peters.

WINSTON Good morning.

CORIN You have called for a commission of inquiry. That seems like quite a major step. What makes you so convinced that it is so serious?

WINSTON Look, you are going to see enormous fallout in the next few weeks as, when the disclosure happens, with that number of references to New Zealand, we know that this country has been used as a tax haven. Now, that is an enormous reputational risk for a country like ours. Remember, the Cook Islands, we know what the Cayman Islands do, the Jersey Islands and all round the world. But we are not a country with that reputation, and that is why there is going to have to be a serious commission of inquiry.

CORIN 2006, there were changes to the compliance rules. You were, pretty sure, Foreign Minister at the time. Were you involved with those? Did you get asked by other countries about these changes? Were they not enough?

WINSTON I was the Foreign Minister; I was not handling the tax matters of this country. Had I been, I think we would have put more work into it. But here is the fact – briefly, back after the Wine Box, I did put in place as the primary minister and treasurer a serious committee chaired by Justice McKay. But when we got rolled, so did the committee. Now, you go forward to 2006, yes, that was past, but by 2011, Simon Power was attacking outfits like Santa Theresa, a most unusual name, a money laundering outfit out of Brazil. And then you had the TV3 – sorry to say it - 60 Minutes, 2012. And other ministries saying look, this is seriously bad for our reputation. Nothing was done.

CORIN But is it bad? I mean, the list that had come out in the last couple of days, we don’t feature in the top 10 in terms of so-called tax havens. We’re a minnow in this big global game, aren’t we?

WINSTON Look, we don’t know the following things – who the beneficiaries are, what the assets are, where the assets are going, and more importantly, whether there is any compliance with either our law or other jurisdiction laws. The fact is that secrecy is the toxin in these arrangements. And we have not got what the government keeps on arguing - and you saw Bill English saying it this week - that his government was famous for what? Transparency and accountability. Now, let’s have some truth here.

CORIN But we have got a system where the IRD does monitor the trustees who do the registering, and they do audits of those trustees. They keep them in line. They’ve got lines to follow.

WINSTON Well, Corin, I had the same denials from IRD when I launched the Wine Box. They used the whole establishment to come down and try and save this, a tissue of lies. When it was all over, the head of the IRD shot through to another country. But the man who was doing the investigation back then is the same man who is doing the investigation as to its veracity right now.

CORIN Well, with all due respect, I do not think we can place the blame at the foot of one man here. We are talking about the politicians. You guys came up with the laws here or the lack of laws.

WINSTON No, with respect, you can. You can look at it and say, ‘What is systemically wrong in New Zealand?’ And what is wrong, and it goes all the way to the prime minister, is stone-wall denial of what internationally is being written up as a very damaging reputation for New Zealand.

CORIN All right. What needs to change here? Should a foreigner still be able to set up a trust here at all? Or should it be that they have to disclose it to their home country?

WINSTON Look, I do not mind how many foreigners set up a trust here as long as there is disclosure. But the moment there is disclosure, they won’t be coming. Secrecy is the key ingredient that they want. They don’t want anyone to know what they’re doing. Now, what’s required here is for the politicians to put the politics aside. For goodness sake, a country that is only one of nine countries with a proud record of unbroken democratic elections, 158 years on, is a seriously fine country. Our reputation is being trashed now.

CORIN John Key has left the door open to a change on just what you’re talking about here. He has said he’s open to it, especially if the OECD’ll do it.

WINSTON Look, don’t worry about that.

CORIN So, you’re saying a cross-party move here. Is there actually a case here for all parties getting together?

WINSTON Well, there’s got to be, but it’s got to start with the prime minister, because he has been in flat denial. Now, unless he understands, and I’m sure his advisers say, ‘For goodness sake, get off this horse right now, because it’s only going to be damaging to you and your party,’ unless he realises that, we’ll carry on as we did with the Wine Box. We got to an inquiry then, and we will now. I honestly have got information that maybe others haven’t got, because I’ve made an attack on the present system. It tells me that we could have a political field day here, but it won’t be good for our country.

CORIN Well, can you produce this information?

WINSTON Yes, I can and will.

CORIN Can you do it now?

WINSTON Yes, I can. I can tell you that the Aussie banks are seriously implicated now. All of them.

CORIN Well, how can you prove that?

WINSTON With the greatest of ease. One’s got almost 8000 references; another one’s got almost a thousand. The parent companies of the ASB and the BNZ are all in reference as well.

CORIN But, Mr Peters, there’s nothing illegal in what they’re doing.

WINSTON Oh, no, excuse me. How do you know that unless you know what they’re doing?

CORIN But the process of setting up trusts is a perfectly legal practice.

WINSTON Look, the last thing I thought was the media of this country would start to become an apologist of a bunch of—

CORIN Well, it’s my job to keep you honest.

WINSTON Not tax avoiders. They’re tax evaders. Let’s be certain about it. This is a breach of the law, and if discovered by their country, would see them in serious trouble. When you go into money laundering as well, the hiding of drug profits and into terrorism, I kind of think round about then you and I should take it rather seriously.

CORIN So you’re saying you will produce evidence that there is tax avoidance going on here?

WINSTON Not tax avoidance. Tax avoidance is legal. That’s legitimate. Tax evasion is not. It’s substance not form that was the subject of the Wine Box Inquiry. It’s not substance not form now, and you need to the discovery and sunlight to know what’s going on.

CORIN So you’re saying this, it’s Wine Box mark two, is it?

WINSTON Oh, but it’s far bigger than that. It’s far, far bigger than that.

CORIN And when will we see details, evidence, emails, whatever it takes to back up these claims?

WINSTON Peter Bale, who is a New Zealander, who heads this group of journalists and reporters investigating this, says that you can expect a gathering storm. Now, I think that New Zealander might know what he’s talking about. He has seen the documentation, and there’s almost 12 million transactions to be looked at. We’re mentioned 60,000 times.

CORIN Well, we might be mentioned 60,000 times, but that’s because we’ve presumably had this trust system in place since 1988. Yet politicians in New Zealand have done nothing about it. Yourself included.

WINSTON Oh really? Oh, no, no, excuse me. I’m the man that brought the Wine Box to you mark one.

CORIN But you have been in government

WINSTON And I’ve brought up the attack here, because the moment I saw this, knowing that I was looking at a New Zealand version of Grisham’s novel The Firm. Only where that was tens of millions, this is billions. Make no bones about it. It would only be a fool who says this is not serious for New Zealand.

CORIN Why do you think this has resonated more than it has in the past, perhaps? It seems to have really struck a chord with people right around the world.

WINSTON Well, first of all, if it’s happening to us offshore, it means we can’t balance our budget. Or it makes it more difficult to balance our budget. And if we’re doing it to another country offshore, it means that ordinary people have got to make up the difference, whilst the tax evaders, the launderers and what have you, are getting away with it. I tell you why it resonates, because most people in the world have a sense of equity and fair play, and they know it stinks. And in our case, if it’s happening to us, as it was in the Cook Islands, then they’re revolted by it. Let’s be clear about this – it is only a unique small number who benefit from this. And in our case, the lawyers and accountants who organise it in New Zealand. But all we have to know is who they are. Nobody’s telling us who the beneficiaries, the assets are, where the assets are going, and whether there’s any auditing.

CORIN But can we actually do anything about it on our own? Or do we need to moving, though, with America, Barack Obama’s talked about it, the OECD, do we need to move in a pack, if you like?

WINSTON Well, I’ll say this to you – one of the problems with American politics is that certain aspects of it, in a financial sense, are corrupt. So I’m not relying upon the Americans to fix it up. But I can certainly see that the British and the French and the Germans are going to be moving real fast now. The Canadians are doing that as well. Now, every government overseas getting embarrassed by it, why isn’t our government embarrassed about their role?

CORIN Will you offer legislative support to the government for a Commission of Inquiry or a legislative change?

WINSTON Well, I would certainly offer every support for the thing I’ve asked for – a full-scale Commission of Inquiry with the terms of reference that get at the truth. But beyond that, what will stop this is disclosure, accountability, a bit of old-fashioned sunlight and politics.

ENDS

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