Little AndrewANDREW LITTLE (Leader of the Opposition): I move That the House take note of a matter of urgent public importance. John Key and the National Government have had to be dragged kicking and screaming to do anything about the dodgy foreign trusts regime that they have set up and to ensure that at last New Zealand gets to preserve—or at least try to restore—its international reputation on tax matters. This is not a question or matter of recent occurrence; it has been going for some time. The Government was told in 2013 that there were problems that the Inland Revenue Department and Treasury saw with our foreign trusts regime. They did not like what they saw. It is interesting to note that by 2013 we had 7700 of these foreign trusts operating in New Zealand. They had more than doubled since 2008—more than doubled since this Government took office. That was between 2008 and 2013. I have to say that since 2013 they have nearly doubled again. They are nearly up to 12000—they have nearly doubled again. This Government has had repeated advice from the Inland Revenue Department and from Treasury saying that our foreign trusts regime is not good and it is not adequate. The disclosure rules are hopeless they do not know what is going on and they cannot assure the Government that the regime that is in place is not harbouring ill-gotten gains and dodgy people—which might be the company that the National Party keeps from time to time. But that is not the point. When you are in Government your foremost duty is to preserve the interests of New Zealand. That is what New Zealand Government Ministers are meant to do: to put the New Zealand people and their Government and their sovereign interests first. That is what was demanded of them but starting in 2013 they got these reports and they did not want to act on them. Finally the Inland Revenue Department decided it would make it part of its work programme and it told the Minister: We are making this part of the work programme." The Minister obviously let it go because the Minister then received a couple of updates saying that it was on the work programme and that work was under way reviewing and having a look at our foreign trusts regime because of the concern that good honest hard-working public servants at the Inland Revenue Department and Treasury for that matter had about the regime—because they did not like it. Then what happened? Mysteriously the Inland Revenue Department review was stopped in its tracks. Oh! It stopped in its tracks. No notice; just a report from a deputy commissioner saying—for whatever reason—"We no longer are devoting resources to this review." Something had happened. And we now know what happened thanks to the Panama Papers. Oh the Panama Papers. They have shone a light on our tax system and its administration. They have shone a light on what Ministers in the National Government knew but did not want anybody else to know. Those papers have shone a light and have shown that New Zealand has been operating a dodgy foreign trust regime. How did the Inland Revenue Department review come to a grinding halt? We now know that the chap described as the Prime Minister's "close personal adviser"—because he does not have a practising certificate any more although he was qualified in the law—and sometime investment manager of some of the Prime Minister's personal funds wrote a letter representing a thing called the "foreign trust industry". Who knew we had that? It has not appeared in any New Zealand Trade and Enterprise report about economic development or any Ministry of Business Innovation and Employment report about the way to a bounteous growth in the future. Anyway we do have this thing called the foreign trust industry and it wrote to the Minister of Revenue and the Minister of Finance and said "You shouldn't really touch this." or words to that effect—that is not a direct quote. They stopped it. The then Minister of Revenue within days of having received this letter stopped the review. It was that quick. Has there ever been a lobbying effort that has had an effect that efficiently?Grant Robertson: Ordinary people in the Koru lounge.ANDREW LITTLE: Ordinary people in the Koru lounge were talking to the Prime Minister about it too—ordinary Kiwis middle New Zealand—because of course they want a foreign trust regime where there is no disclosure and people can hide their ill-gotten gains and they can rip off the countries that they come from! Of course we all want that. It is just rubbish—it is just rubbish—and Chris Bishop the sometime representative of the tobacco industry who sits in his corner up there looking like he has been quaffing on nicotine for centuries is not disturbed about it. He does not care about it. He is waiting to launch the assault on plain packaging—that is what he is here for to make sure that plain packaging does not proceed. In the meantime the rest of New Zealand is concerned about the reputation that our country is gaining abroad for being the host for dodgy tax regimes. It is not who we are. It is not who we are as a country. We are better people than that. New Zealanders to a person are hard-working honest and expect the same of others. But not this Government—not the wide boys in the National Government. Not those people who rub shoulders with the rich and the powerful from overseas and grant any favour going. That is because it is the grace-and-favour Government. It does not care about that. It was John Key's dream to have a financial services industry with zero rating tax instruments and all that sort of stuff. That was his dream. He said that it was going to add billions to the New Zealand economy. What has the foreign trust regime added to the New Zealand economy? It has added $27 million and that $27 million is the billings of the lawyers and the accountants who set these things up. They are the ones with the websites that sell this stuff and say that New Zealand is a tax haven—but the Prime Minister does not accept it is a tax haven. Even the independent reviewer struggled to shuck off the label "tax haven". He said: "Oh! According the OECD definition we are not a tax haven." But then he very quickly had to say "But anyway it is an outdated term and let's not look at it too closely."—because actually the fear is that we might actually be one. We might be one. When everybody else describes us as one then we probably are one. It is the old duck test: if it waddles quacks and it has feathers then it probably is one of those that waddles quacks and has feathers—that is the duck test. This Government has been embarrassed and caught short by the Panama Papers by whichever public-spirited person hacked into Mossack-Fonseca's computer system and found this treasure trove of information that showed the world just who we are. It showed the world just who we are. The information revealed showed just how this Government operates and just how much it cares or actually does not care about those things that actually are important to our identity as a nation and our reputation abroad. We knew about this and about our Government's failure only because of international reportage particularly through the Australian Financial Review. There is one respect of the John Shewan report that I do not agree with—when he tried to analyse whether or not our reputation had been damaged. He had done a Google search or gone on to international media and said that there was not much coverage of it. But that is not the reputation we are talking about. The rest of the world—6 billion other people or however many it is—do not spend their time talking about the tax regimes of the world. I am not sure that many people in the Brexit vote last week were thinking about tax regimes of the world. But there is a cohort of people in different parts of the world—accountants lawyers and those dealing with the huge wealth of very rich people—who do think about tax systems and they do look at what happens in other parts of the world. It is our reputation amongst them that counts and amongst international bankers and amongst international organisations—Public Service organisations whose job is to keep track of what is happening with tax regimes and the flow of finance and money around the world. That is where the reputation counts. That is where our reputation has to be above board. That is where it counts most. With all due respect to Mr Shewan he got that wrong. Our reputation has suffered. We have been the subject of headlines around the world and of international reportage in newspapers and we are the subject of comments and websites around the world including websites hosted here which describe us as a tax haven. So let us not be cute about it. Our reputation has suffered. But to his credit John Shewan has had a look using his formidable technical tax brain and said that the disclosure requirements are inadequate. But of course that is directly contrary to what the Prime Minister spent weeks telling New Zealanders. He said: "There's nothing to see here; nothing to worry about. We have full disclosure; we have full disclosure." But John Shewan did not say that. He said the opposite: "The disclosure requirements are inadequate." He has now recommended a set of significant disclosure requirements that should be met. The Government has said it is not quite sure which recommendations it is going to take up. It is a pity that Mr Shewan did not go further and say that not only should the Inland Revenue Department be collecting the significant additional data but it should be publicly available. As so many business records in New Zealand for those who do business in New Zealand and are domiciled in New Zealand already face there should be public access to the details and the information applying to foreign trusts. It is not unreasonable. Why would we grant ever more privilege to the rich and the powerful of the world because they are going to set up a trust here usually to use it to avoid tax obligations in their home country. Why would we? Why would we keep it secret to our agencies here when there will be good innocent tax authorities in other parts of the world that will want to know what information our Inland Revenue Department holds about foreign trust settlors and those who are connected with them? Why should they not know? Why should they have to know the precise information before they can ask for it and get it from our Inland Revenue Department? That is not right. It is not Kiwi rules and it is not Kiwi standards. It might be Bill English's standards it might be John Key's standards but I think New Zealanders have already arrived at the conclusion that those are not standards that we ought to live by; that actually we represent something better. We represent something more wholesome. It is about openness and transparency and honesty and doing business the right way and doing good business the right way. That is what New Zealanders demand. That is what this Government in spite of its repeated opportunities to do so has singularly failed to uphold—good honest business principles. Instead it has shacked up with the world's rich and powerful. It is looking after those at the top because it has long given up on middle New Zealand and everybody else. The Government just does not care. Perhaps it never did. But it does not care now. The Government has been caught short and we have been caught embarrassed and it is not right. Good on John Shewan for coming up with the recommendations that he did. But actually if this Government wants to meet New Zealand's expectations and do the right thing for all New Zealanders do the Kiwi thing then it will go beyond John Shewan's recommendations and will follow the advice of various other independent experts who have said that there is more that is needed. Why does the Government not follow the advice of Deborah Russell a well-known tax expert at Massey University and go beyond the recommendations of John Shewan? Why does the Government not do that? That will be the test for this Government. Is it a good wholesome honest Government that believes in good wholesome honest business? Or is it just rubbing shoulders with those whom it prefers to favour—the privileged and the powerful and the elite—at the expense of everybody else? So far that is the track record the Government has set for itself. It is not good enough. We can do better but when it comes to ministerial decisions that responsibility is reposed in that side of the House in those people and in people like Bill English and the floundering Minister of Revenue whom we only expect a straight answer from. They are the people in whom we repose the responsibility of maintaining New Zealand's reputation. So far they have failed. They have a chance to get it right and to serve New Zealand better and to serve New Zealand well. Let us see whether they take it; let us see whether they take it. New Zealand expects nothing less."