Key John: Questions for Oral Answer — Questions to Ministers 
Key John: Questions for Oral Answer — Questions to Ministers 
[Volume:626;Page:21126] 
2.  
JOHN KEY (National—Helensville) 
 to the  
Minister of Finance 
: Have any State-owned enterprises engaged in structured finance deals that could have reduced the New Zealand tax liability of the investing counter-party in the previous 5 years; if so what are the details of those arrangements? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 To the best of my knowledge checks having been made with all the larger State-owned enterprises the answer is no. The smaller ones are probably too small to enter into such transactions. 
John Key 
: If New Zealand financial institutions have not engaged in structured finance deals to reduce their tax base in New Zealand can the Minister explain the logic of why two financial institutions yesterday refused to rule out any involvement in those transactions? 
Hon Dr MICHAEL CULLEN 
: I assume it is for the same reason that Ministers sometimes decline to comment. For example when questions are asked of the Minister in charge of the New Zealand Security Intelligence Service as to operational details— 
Hon Dr Nick Smith 
: Come on come clean. 
Hon Dr MICHAEL CULLEN 
: The member who has asked me to come clean is the member who went to court and was found to be very dirty indeed I might say. The Minister in charge of the New Zealand Security Intelligence Service always refuses to comment on operational details because once one starts commenting then clearly one is backed into a blind corner. I am sure that the banks took the same attitude. 
Rt Hon Winston Peters 
: Can I ask the Minister to outline now what the two deals in 1996 that were mentioned by the Prime Minister yesterday were; deals that she accused me of being associated with and about which one Jane Clifton in today’s paper describes me as being “in a similar deal when he was in government”? What exactly were those two deals that the Prime Minister was talking about? 
Hon Dr MICHAEL CULLEN 
: I am not responsible for Jane Clifton. All I can say is that— 
Rt Hon Winston Peters 
: Nobody is! 
Hon Dr MICHAEL CULLEN 
: That is not my understanding. All I can say is that Transpower certainly entered into a lease-out and lease-back arrangement in 1996. 
John Key 
: If the Minister is so confident that everything is above board with these Transpower deals why could neither his office nor Transpower answer in detail direct questions that were put to them last week about these deals and why could he not answer the simple question I put to him in the House yesterday despite the fact that he had 4 hours’ notice? 
Hon Dr Nick Smith 
: Because it’s dodgy. 
Hon Dr MICHAEL CULLEN 
: No it is not dodgy at all. The deal is perfectly legal in the jurisdiction in which it occurred. Indeed for reasons that are well beyond me that particular jurisdiction actually designs tax loopholes to be exploited by a variety of companies. 
John Key 
: I raise a point of order Madam Speaker. I wonder whether I can ask that the Minister answer the question. It was quite a straightforward question: why could not either Transpower or the Minister answer those questions we put to them last week? 
Madam SPEAKER 
: That is not a point of order. The Minister did address the question. If the member wishes to ask another supplementary question he may do so. 
John Key 
: If it is proven that a New Zealand State-owned enterprise has engaged in structured deals that have allowed other entities to reduce their New Zealand tax base will the Minister demand the resignation of the State-owned enterprise’s chief executive officer and board and what responsibility will he personally assume? 
Hon Dr MICHAEL CULLEN 
: State-owned enterprises are allowed to enter into structured financial deals subject to certain considerations. Final decisions are for the individual State-owned enterprise boards subject to the usual consultation requirements. All transactions should be legal in all jurisdictions in which they have effect and they should have sign-off from legal advisers and appropriate tax authorities. Ownership risks arising from the tax transactions should be remote. The normal expectations regarding the “no surprises” rule etc. should apply. In the particular case to which the member refers I am completely satisfied that there was no tax loss to New Zealand as a result of the structured finance deal. Indeed there was a tax gain to New Zealand as a result of the structured finance deal. I have more information on that I am sure than Dr Richard Worth does. 
John Key 
: I raise a point of order Madam Speaker. I want to clarify that the Minister’s answer is that if a State-owned enterprise undertakes a structured finance deal here in New Zealand and it reduces the tax base of New Zealand entities he is happy with it. 
Madam SPEAKER 
: That is not a point of order. It is a supplementary question. The member is entitled to a supplementary question. 
Rt Hon Winston Peters 
: I seek leave to table the  
Hansard 
 record of the Prime Minister’s answer to question No. 1 yesterday which alongside the statement of the Minister of Finance today demonstrates that when she made that allegation she did not have a shred of evidence to back it up. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection.