2. Tax System—Overseas Trusts and Disclosure RegimeANDREW LITTLE (Leader of the Opposition) to the Prime MinisterTax System—Overseas Trusts and Disclosure Regime2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that tax havens are where there is non-disclosure of information. New Zealand has full disclosure of information" given the Shewan report "concludes that the existing foreign trust disclosure rules are inadequate" and "not fit for purpose in the context of preserving New Zealand's reputation"?Rt Hon JOHN KEY (Prime Minister): Yes and I note that Mr Shewan this morning confirmed that New Zealand does currently have full disclosure of information. As he explained records are required to be maintained by trusts and if they are asked to exchange that information they must do so. Mr Shewan has recommended extra measures that will see that information provided to the Inland Revenue Department (IRD) through a searchable register.Andrew Little: Does he agree with the Shewan report that "there is a reasonable likelihood that the regime is facilitating the hiding of funds or evasion of tax"; if so why has he consistently denied that there is a problem?Rt Hon JOHN KEY: I cannot confirm that one way or the other because I do not have any access to the source document and Mr Shewan himself was unable to find any evidence that that was the case.Andrew Little: Does he agree with the Shewan report that "under current law and enforcement practices the risk of detection by authorities is low."; if so why has he consistently claimed there is no problem?Rt Hon JOHN KEY: I certainly agree with Mr Shewan that there can be improvements because by having that information at the IRD's level in the searchable register it makes it easier. But New Zealand has complied with every request it has had. The same information will still be collected and in fact under the changes that the Government has made including the extension of the automatic exchange of information the rules around the Foreign Account Tax Compliance Act and others have shown that actually New Zealand by the way does have that information and it does give full disclosure. Tim Macindoe: What does the independent Shewan report have to say about claims that New Zealand is a tax haven?Rt Hon JOHN KEY: It concludes that such claims are wide of the mark. The report says: "The tax treatment of foreign trusts follows New Zealand's long established and principled policy of not imposing New Zealand tax on foreign source income derived by non-residents." The report goes on to say: "It does not result in New Zealand being a tax haven under established OECD criteria."Andrew Little: Does he agree with the Shewan report that "… New Zealand is part of a global tax police force … to clamp down on aggressive tax practices."; if so why has he allowed New Zealand trusts to dodge other countries' tax?Rt Hon JOHN KEY: New Zealand's primary purpose from an IRD perspective is to preserve our own tax base. Of course it is also to have good international tax practice and we do. As the Shewan report quite correctly says New Zealand ranks right at the top for best international tax practice.Andrew Little: Which is true: his claim that we provide full information to other Governments or the Shewan report's finding that "the paucity of information currently disclosed … appears to limit IRD's ability to proactively provide assistance to foreign revenue authorities."?Rt Hon JOHN KEY: The member is selectively trying to quote from John Shewan when this morning he made it quite clear on Morning Report that in fact actually the situation is that New Zealand does have full disclosure. Mr Shewan is not recommending a significant widening of the amount of information collected; what he is recommending is that there should be a searchable register held at IRD's level.Tim Macindoe: What reports has the Prime Minister seen on the appointment of Mr Shewan to lead the independent inquiry into foreign trust disclosure rules?Rt Hon JOHN KEY: I have seen several reports. The first was the joint statement from the finance Minister and revenue Minister describing Mr Shewan as "a highly regarded tax expert". A second report claimed Mr Shewan had advised the Bahamas on how to preserve its status as a tax haven. This led to a third report—interestingly enough actually released 2 hours before an All Blacks test match—where the same source admitted he was completely—Mr SPEAKER: Order! I thank the Prime Minister but I do not see any ministerial responsibility. [Interruption] Order! I want substantially less interjection from members to my right.Andrew Little: If at least one member of the House is capable of accepting when he has got it wrong and publicly acknowledging that when is he going to acknowledge to the public of New Zealand that he misled them about the state of our foreign trust tax laws? Rt Hon JOHN KEY: I have not misled the New Zealand public. We certainly commissioned a report and made sure that that report comes up with some recommendations. But if I had misled the New Zealand public I would not hide behind the liniment bottles and try to release that apology 2 hours before an All Blacks test match and pretend no one saw it. I would have the courage of my convictions.Andrew Little: Why did he block efforts to fix foreign trusts in 2013 when the Shewan report finds that they helped tax evasion that the risk of getting caught is low and we do not give assistance to countries trying to stop tax-dodgers?Rt Hon JOHN KEY: In answer to the first part of the question the member is incorrect. In answer to the second part of the question the Shewan report makes it quite clear that New Zealand has a very high international reputation. In fact it says that the only damage done is by misguided New Zealand politicians trying to score domestic political points and in fact internationally there was virtually no coverage of New Zealand because it is well respected for what it does.Andrew Little: Is it not time for him to stop playing silly buggers and admit what the IRD told him in 2013 what John Shewan told him last week and what every New Zealander knows: that his Government has been harbouring foreign tax-dodgers for far too long?Rt Hon JOHN KEY: The member if he wants to look at responsibility should get out a mirror and stop apologising to John Shewan 2 hours before an All Blacks test match and have the guts to get up and say it in this Parliament—that he is sorry."