Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 06 April 2016. Volume:712;Page:10228. Text is incorporated into the Bound Volume.]1.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by all of his statements in relation to tax havens?Rt Hon JOHN KEY (Prime Minister): Yes and in particular my statement from question time yesterday when I said it is ridiculous to suggest that New Zealand is a tax haven. We have a strong tax treaty and information exchange network that helps discover and prevent tax avoidance through exchanging information between tax jurisdictions. New Zealand has also been a very active participant in the OECD and G20 work to combat tax avoidance. We continue to be a strong voice in this area.Andrew Little: When he says that New Zealand has “full disclosure” can he confirm that he means a system where foreign trusts do not have their names revealed in a public database do not have their trustees or settlors revealed in a public database and do not automatically supply any financial information to the Government?Rt Hon JOHN KEY: “Full disclosure” is not that something is on a public database; it is that that information is available. The IR607 requires that the trustee is listed and that the trust’s name is listed. If any one of the 40 countries that we have a tax agreement with or the 11 that we have a tax information - sharing agreement with want to come to New Zealand and ask for further information we would supply that. In fact actually 20 jurisdictions have done that and we have supplied it. In the case of Australia we automatically supply the information to them.Andrew Little: When he says the Inland Revenue Department (IRD) will supply information to any country that asks can he confirm that Governments other than Australia cannot get any information at all unless they somehow know the specific name of the trust and that those trust names are themselves secret?Rt Hon JOHN KEY: If a country with which New Zealand has a double tax agreement or alternatively has an information-sharing agreement—[Interruption] It sounds like we are being attacked by drones but anyway.Mr SPEAKER: I will have that sorted out as quickly as I can.Rt Hon JOHN KEY: OK all right. If any one of those—Andrew Little: It is trying to get the trust information.Rt Hon JOHN KEY: I think it is a bumble-bee actually. I am about to deliver the sting if you give me 2 seconds.Hon Members: Ha ha!Mr SPEAKER: Order! We will just continue with the answer to the question without interjections.Rt Hon JOHN KEY: OK. So if any one of those countries that we have an agreement with comes to IRD and asks for the information we will supply it. Of course it is for the individual country itself to decide what disclosure regime it wants to have. If it asks for the trust’s information as part of the declaration then actually it will know the name. It is up to the country to decide whether it wants to know.Andrew Little: Is it the truth that his weak rules on foreign trusts mean enforcement agencies have no idea which of the 12000 secret trusts are being used by wealthy foreigners for tax dodging?Rt Hon JOHN KEY: I would best sum it up by saying this: “The government has sought to develop policy that works for all concerned one that enables New Zealand to co-operate with other tax jurisdictions while not disrupting the legitimate financial transactions of foreign trusts.” Those words came from Michael Cullen when he put together the legislation that I might add we are talking about now which was voted for not just by Labour and National but by New Zealand First. [Interruption]Mr SPEAKER: Order! [Interruption] Order! I have called for order Sue Moroney; I expect it.James Shaw: If for example a Russian oligarch wanted to hide assets in a New Zealand foreign trust could Russian tax authorities obtain full disclosure of the details if they did not know the name of that trust here?Rt Hon JOHN KEY: I cannot tell you whether we have a double tax agreement with Russia. You would need to put that question to the Minister of Revenue.James Shaw: Is the Prime Minister saying that Covisory Partners in Auckland members of the New Zealand Institute of Chartered Accountants is wrong when it concludes that “New Zealand is actually a tax haven at least in respect of certain trusts.”?Rt Hon JOHN KEY: In my opinion yes for a number of reasons not the least of them being that the arbiter of whether there are reputational issues here is the OECD. It has not raised any issues in this area with us. In fact despite what Labour said in the House about the OECD not giving New Zealand a clean bill of health that is completely wrong. New Zealand was rated as—[Interruption] See once again you are wrong Grant—Mr SPEAKER: Order! The Prime Minister will resume his seat. The question has been answered right at the start.James Shaw: Is it not true that the same OECD report that he was just quoting saying that New Zealand had a clean bill of health also warned that improvements were needed around trusts with non-resident directors and assets and that nothing has changed in the 3 years since that report?Rt Hon JOHN KEY: That is not correct. The advice I have had is that the OECD raised a few minor points not specifically related to foreign trusts. They were raised and those have actually been addressed.James Shaw: Is he not concerned that on his watch New Zealand is building a reputation as a sunny place for shady people?Rt Hon JOHN KEY: We have in New Zealand followed tax rules that have been around for a very long time since 1988. The disclosure rules that came in brought in by the previous Labour Government are robust. We are part of the OECD and other organisations that look at these areas. As I have said publicly over the last few days if there are recommendations made either as part of the base erosion and profit sharing work we are doing with the OECD or others New Zealand is quite happy to adopt and accept those. But we have full disclosure to anybody for whom there is an agreement. And it will not matter how many times the Opposition says we do not we do and we have provided it to 20 jurisdictions.Andrew Little: Why do foreign trust owners deserve more secrecy than New Zealanders who own shares or are company directors?Rt Hon JOHN KEY: We have tax rules in New Zealand that were established for foreign trusts and as I quoted from Michael Cullen earlier—and I quote it again—“the Government’s proposed foreign trust policy is another area where we worked extensively with affected taxpayers to produce good workable tax policy.” There is nothing wrong with a foreign trust operating in New Zealand. We have a disclosure regime and we are more than happy to work with and are working with the OECD on its base minimisation policy.Andrew Little: Is it not the truth that wealthy foreigners take advantage of this special treatment to dodge tax at home and the truth is he does not worry about that one little bit?Rt Hon JOHN KEY: That is just fundamentally incorrect. Firstly we are following the rules established by the—Grant Robertson: Looking after your old mates.Rt Hon JOHN KEY: Well they are the rules established by the Labour Government voted for by Labour and New Zealand First. Secondly if any—[Interruption]Mr SPEAKER: Order! There is no point in answering a question asked by Andrew Little when I am getting that sort of barrage from the front bench of the Labour Party.Rt Hon Winston Peters: If our tax laws are—to use his words—world-leading and right why is he blaming the last Labour Government?Rt Hon JOHN KEY: Well if they are not why the hell did he vote for them in 2006? [Interruption]Mr SPEAKER: Order! My patience is weakening on this particular side of the House. If I have got to specifically name people and ask people to leave I will do so. It would be with reluctance.Andrew Little: If there is full disclosure as he claims can he tell this House which trusts are being used to dodge taxes which trusts are being used to launder money and which trusts are being used to hide stolen assets?Rt Hon JOHN KEY: The member is posing hypothetical assertions.