Thursday, 12 May 2016

Engaging in corrupt behaviour.

What is the main lesson to come out of the information revealed to us via the Panama papers?
“Many in the New Zealand mainstream media have been wondering, why the fuss if New Zealand laws facilitate rich foreigners to avoid their fiscal obligations in their own countries. Why is that our concern, they ask? - See more at:
Keith Rankin went on to say, “Non-payment of taxes by the rich is severely detrimental to the global economy. New Zealand is a part of the global economy, so international tax-avoidance detriments us. If we encourage others to legally cheat on ‘their own’ people, and encourage our people to help them cheat on their people, then the global market system fails (or, at minimum, becomes inefficient and unstable). When systemic failure happens, we all stand to lose: the aiders and abettors, the innocent bystanders who pay their taxes but also look the other way, and the billions of foreign victims whom too many of us care too little about. –
I believe we owe it to our fellow human beings that if we see people ripping off their populations then we should not facilitate that behaviour. I’m sure that where ever the money comes from the local people, the working men and women have to pay more for their services or whatever. These tax dodges are stealing from the State, in the US it is considered that over a trillion dollars is lost to the state because of tax avoidance.
When confronted with the evidence that NZ is facilitating the misuse of our overseas trust processes we saw the angry and typical male bully behaviour from our PM. This is what The Daily Blog said on the subject:
“Offensive, abusive and needlessly antagonistic, the boorish behaviour of Key in Parliament is a disgrace. His screaming at the Opposition last year that they were on the side of rapists and murderers was topped yesterday as he lashed out at Amnesty International, Greenpeace, Red Cross and the very kind Mojo Mathers to distract from the increasing heat he is facing over aiding and abetting the creation of a Tax Haven here. - This isn’t left or right, it isn’t boorish grand standing that’s required, we need real leadership to crack down on these vested interests. - See more at:

The divide between the rich and the poor over this subject is huge. The poor pay tax on the first dollar earned and GST on anything else they buy. Whereas the super-rich or very well off believe they are taxed too much and use others to create tax avoidance schemes for them. And our government helps them achieve that goal especially the mega rich based outside of New Zealand. Frank Macskasy wrote:
There is a preternatural volcanic fury from the Right – many, if not most, of whom view taxation as “theft” and tax-havens as a legitimate counter to governments who cheekily demand tax from its citizens and corporates.
The same Right believe that taxation is “wasted” on “frivolous” matters such as public health, public education, welfare, environmental protection, housing the poor, etc. Only funding for Police and the Armed Forces is considered justified to protect their hoarded wealth from increasingly poor, frustrated, and angry workers. - See more at:

This from Australia:
Australian Prime Minister Malcolm Turnbull has been named in the Panama Papers:
The Australian Financial Review reported that in the 1990s the Prime Minister and former NSW Premier Neville Wran were on the board of Star Mining NL and its subsidiary in the British Virgin Islands, Star Technology Service, which had been incorporated by Mossack Fonseca two years earlier.
Star Mining is an Australian listed company which hoped to develop a $20 billion Siberian gold mine called Sukhoi Log.

In response to allegations Star Technologies had made donations to Russian politicians, Mr Turnbull's spokesman said the Prime Minister was not aware of any such donations in the time before or after he was a director.
The newspaper reports stress that there's no suggestion of impropriety on Turnbull's part. At the same time, it leaves him tainted. It is one thing to be "in business" but quite another to be in business via a tax haven with a company alleged to have engaged in corrupt behaviour.
One last item from the No Right Turn blog:

So far the tally of New Zealanders caught up in the Panama Papers is thin - as you'd expect. Culturally, ultra-rich kiwis are hardly likely to go to Panama for their tax-dodging needs. Instead, they'd go to London, Sydney, or just Auckland. But there has been one interesting catch:
Deborah Pead is well known in the Auckland PR scene and became the benefactor of a trust for a sick friend, which unwittingly landed her in the files of Mossack Fonseca.
In 2014 she enlisted the help of Chesterfield, a financial management company, to help take care of her friend's money.
Chesterfield in turn asked Mossack Fonseca to set up three trusts in the blacklisted British Virgin Islands.
Documents show when the companies were established using "business profits" they had a total value of $220,000.
Ms Pead told ‘ONE’ News she had no idea Mossack Fonseca was involved or how the law firm structured finances.
Riiigghhhtt, this sounds... implausible. In fact, about as credible as "the dog ate my homework" or "the money was just resting in my account".
But stranger things have happened. Maybe Pead really does have a wealthy sick friend, who magically entrusted her with hundreds of thousands of dollars of (perfectly legitimately obtained and surely properly taxed) "business profits". And maybe the financial management company went to a lot of expensive effort setting up multiple trusts in the Bahamas for that money because that's what they always do for their clients, even for those with relatively small (in a financial management sense) amounts of money who have expressed no desire for such structures (such diligence!). Maybe it is all just a terrible, suspicious and implausible-looking series of events with a perfectly reasonable, legitimate explanation. Surely the word of a PR consultant - a polite euphemism for "paid liar" - is enough for us to believe that.

The real question, I guess, is whether it’s enough for the IRD.

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