John Shewan is a name long associated with tax policy in this country and well respected for it.

But it is for that reason Opposition parties have a point when they suggest it would be better if New Zealand's rules governing tax-free trusts for foreign funds were reviewed by somebody from outside the country.

New Zealand is a small place. It can have few tax experts who have not been involved in the working parties, taskforces and policy committees that have reviewed aspects of our taxation for governments over the years.

It would be useful to hear the conclusions of someone from outside, not least because the Panama Papers call into question New Zealand's good faith as an international citizen.

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Foreigners putting wealth into an untaxed repository in New Zealand are probably avoiding tax in their country of residence.

There may be many other legitimate reasons to put money in a foreign trust, as the Prime Minister says, but it was the tax-exempt status, coupled with minimal disclosure requirements, that caused the Panama law firm, Mossack Fonseca, to recommend New Zealand to its clients.

John Key has made it clear he sees no cause for concern. He dismisses any suggestion New Zealand is a "tax haven" since we comply with disclosure requirements of international treaties.

It's fair to argue he set up the review under Mr Shewan not because he thinks there is any cause for concern but because politics required he do something in response to public comment. He came to this conclusion late last week and arranged the Shewan review in time for its approval by the Cabinet on Monday.

It has the hallmarks of a quick arrangement to assuage public criticism while the subject is alive.

The Government has the resources to tell us right now whether there is any substance to the claims New Zealand's checks on beneficiaries of foreign trusts are different from those of countries that have not been called tax havens, and that we do share this information with the beneficiaries' home states.

It does not require a 10-week investigation to find out how secretive trusts here may be. But no internal reassurances on these questions are likely to be convincing.

john Key dismisses any suggestion NZ is a
john Key dismisses any suggestion NZ is a "tax haven" since we comply with disclosure requirements of international treaties. Photo / Getty Images

The exercise to be led by Mr Shewan needs to take a fresh look at issues he has probably considered before. There is now much more concern internationally.

The greater dispersal of production chains across borders these days makes it harder to tax profits where they are made, and easier for trans-national business to shift profits to countries where they will be least taxed. Personal wealth, likewise, can be located where it is least likely to be pursued for tax, and New Zealand should not be part of that problem.

Those who profit from these personal arrangements can include public figures with their wealth in trusts. Britain's Prime Minister has already showed them how not to handle questions about their, or even their parents' arrangements.

Mr Key is confident his arrangements are "beyond reproach". May the same be said of New Zealand's foreign trusts after credible, independent scrutiny.

Debate on this article is now closed.