Genter Julie AnneJULIE ANNE GENTER (Green): The Government has been caught out. This National Government has been caught out helping an industry that exists only to help the global wealthy elite hide their assets so that they can avoid paying taxes and potentially engage in even more nefarious activities. I have to congratulate the Minister of Revenue and the Prime Minister on accepting the very reasonable recommendations of the Shewan report because when those recommendations were made by Opposition parties like the Green Party the Government described them as barking mad". It is amazing that when something comes as a proposal from the Opposition the National Government refers to it as barking mad but when it is in a report that it has commissioned from a tax expert it is willing to accept it. So that is great. But I have to say that the Minister is being a little bit misleading when he says that the Opposition parties are the ones making scurrilous attacks when in fact it has been the National Government that has been accusing everyone else of making attacks on it—when in fact the truth is it was wrong and it has been caught out.Let us start at the beginning. At the beginning when the Panama Papers were released and a number of tax experts were saying that in fact New Zealand has a number of loopholes and our foreign trust regime could be used for tax dodging purposes if the settlors were not resident in New Zealand and Australia what did the Prime Minister say? The Prime Minister said there was nothing to worry about that "New Zealand has full disclosure of information." In fact the Shewan report says disclosure is "inadequate" "not fit for purpose" "light-handed" and therefore likely to be abused. That is from this report—it is right here in paragraph 1.2 of the conclusions in the executive summary: "The Inquiry concludes that the existing foreign trust disclosure rules are inadequate." How Minister can they be inadequate and yet full disclosure at the same time? How can they be inadequate and not fit for purpose and yet be "broad and deep" at the same time? Well the truth is they cannot be all of those things and I suppose it is very indicative of this National Government that it cannot own up to its mistakes—that it would prefer to mislead the New Zealand public rather than be honest about the fact that there were—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! One has to be very careful when one uses the word "misleading". When one says that someone "prefers" to do it that means that they are doing it deliberately and that of course would be a breach of privilege. The member cannot imply that in the House in that way.JULIE ANNE GENTER: Key then said that the requirements on form IR 607 were broad and deep. The Shewan report says that the IR 607 registration requirements are absolutely "minimal" "extremely limited" and tell nobody anything. Minister Woodhouse said our foreign trust laws are "world class" but the Shewan report says "the risk of use of foreign trusts for inappropriate purposes is high." Minister Woodhouse says the Inland Revenue Department (IRD) can get the information at any time from the trustee; the Shewan report says: "Foreign tax authorities will typically not know how to ask for information about a New Zealand foreign trust … because they have no way of knowing if it exists."So I congratulate the Government on accepting the findings of the Shewan report which are very very close to what Opposition parties—like the Green Party—have been saying for the last few months. Our goal is not to damage New Zealand's reputation it is to identify a serious deficiency within our law and provide some constructive solutions because we know that New Zealanders do not think it is right or fair that New Zealand's foreign trust laws should be used by wealthy people from overseas to avoid paying taxes in their home countries. I would be the first to say that I do not think this National Government is entirely responsible for those loopholes—because they have existed for a very long time—but it was under the National Government's watch that the loopholes really started to be exploited and the number of New Zealand foreign trusts registered in New Zealand went through the roof.Then there is the whole issue of whether or not it knew it was a problem at the time. If we go back in the time line we have a report from August 2013 where the IRD warned the Government about the high risks of New Zealand foreign trusts. The report says: "our foreign trust rules continue to attract criticism including claims that New Zealand is now a tax haven in respect of trusts. … the mismatch between our rules and those of other countries may result in income not being taxed either in New Zealand or offshore. To protect our international reputation it may be necessary to strengthen our regulatory framework for disclosure and record-keeping." That was in August 2013.In December 2014 an unnamed person from the Antipodes Trust Group wrote to Minister McClay on behalf of the foreign trust industry concerned about the IRD's change of view of their industry. He claimed that he had spoken to the Prime Minister and the Prime Minister said he had no plans to change the status quo—pretty typical of this Prime Minister. That person also claimed the Prime Minister encouraged a meeting with a small group of foreign trusts and the Minister at the time who was Todd McClay. The attached industry briefing paper claimed that 300 people work in the industry and this was a big risk for jobs here in New Zealand so what they would like was for the Government not to make any changes around disclosure of foreign trusts so they can continue to make money from those wealthy individuals from offshore who want to hide their assets in a New Zealand foreign trust. The very next day Minister McClay expressed his concern to IRD officials that their report might include removal of the foreign trust regime—so it is pretty clear where the direction to not pursue reform of the rules came from and it was not coming from IRD. It came from this Government because it was lobbied by the foreign trust industry. I think that is something else that New Zealanders should be very concerned about. This National Government is open for business and it is quite open to being persuaded by members of that wealthy elite class of New Zealanders but it is not open to the interests and values of your average New Zealander who would say: "Actually we don't want New Zealand being used as a tax haven."About 9 days later—12 December 2014—we have an IRD report on foreign trust rules. The IRD found that our approach to taxing trusts differed from the international norm and had attracted criticism internationally. Our regulation is not good enough and it is difficult to enforce compliance with the rules. Being perceived as a tax haven is damaging our international reputation. IRD questioned the adequacy of our disclosure and record-keeping requirements and suggested that perhaps they did not have the ability to ensure compliance. Just a few days later Minister Todd McClay met with representatives of the foreign trust industry in Auckland. On the agenda: that the industry feared moves to have greater disclosure of foreign trusts would close the industry down and they sought commitment from the Government as soon as possible that it would not conduct a public review of foreign trust tax laws. And that is exactly what happened.It took the Panama Papers and it took that enormous public exposure and scrutiny for this Government to undertake the review that should have been done several years ago. It took that exposure and the continued scrutiny from Opposition parties demonstrating that the Government was not being completely transparent about how our foreign trust rules work in their answers to questions—that is what it took for this Government to undertake a review and to propose the sorts of recommendations that the Green Party proposed in our bill and in my Supplementary Order Paper to one of the tax bills. All that we recommended was that there was a register and that it was required for the settlors to disclose their foreign address country of tax residence information about non-resident trustees and information about who the beneficiaries were. That is exactly the strengthened disclosure that has been recommended by the Shewan report.I think the issue here that should really concern New Zealanders is the fact that the National Government is willing to turn a blind eye to activities that most New Zealanders would consider unfair and wrong. It is willing to do that when the right people with the right money and the right connections lobby it and it is only when there is persistent scrutiny from international and domestic media and the Opposition parties that this Government will actually listen to reason and start to do the right thing."