New Zealand is not a tax haven. John Key, Michael Woodhouse and the rest are right about that. We are no Jersey or Panama or Bahamas. But we do display a few tax haveny characteristics. Think of it like the Henderson Countdown. The Henderson Countdown is not a pharmacy. That's a ridiculous suggestion. Plain as anything, the Henderson Countdown is a supermarket. But it does have a pharmacy in it.
For confirmation of the not-a-haven-but-with-haveny-bits status, take a look at the numerous websites, ranging from the clumsy to the slick, that advertise our foreign-trust set-up to the world. An outfit called Offshore Simple, for example, in promoting a Vanuatu-NZ hybrid package, announces, "New Zealand is not well known as a tax haven, and this is a major advantage." For the "low, low price of just US$1499" up front, Offshore Simple can deliver "a tax elimination structure from a reputable country that is not regarded as a tax haven".
As for the Mossack Fonseca uber-leak, it is a safe bet that the reported 60,000 references to New Zealand in the documents are not all conversational asides about Kane Williamson's prodigious batting form.
The Prime Minister has dug in his heels this week, refusing to countenance any rule change around foreign trust disclosure, despite the IRD flagging the issue as a potential reputational problem in 2013.
There is nothing in the Mossack revelations to make Key squirm like his counterparts in Russia, Iceland and the UK. But it does cast an awkward light on his earlier flirtations with the prospect of turning New Zealand into a global financial services hub " an idea he'd abandoned by 2012, when he told media it wouldn't be a sensible investment of public money.
It is a little surprising, therefore, that this week he defended old remarks about transforming New Zealand into a tax avoider's paradise. In a 2005 interview with this newspaper, the then opposition finance spokesman told Fran O'Sullivan about his enthusiasm for the low-tax Irish approach and more. "As a former money-man, he is also interested in how Jersey built its economy on the back of offshore trusts," O'Sullivan wrote then. "Key gets a gleam in his eye when he starts talking about New Zealand becoming the 'Jersey of the South Pacific'." Now, more than ever, that is a deeply unappealing idea.
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