Robertson GrantGRANT ROBERTSON (Labour—Wellington Central): The question that New Zealanders should be asking when they look at the John Shewan report is: whose side is this Government on? Is it on the side of hard-working New Zealand taxpayers who pay their tax out of their wages every week and who do the right thing or is it on the side of the mega-wealthy who want to find places in the world to shelter their income to not pay their fair share and to put that burden on to those hard-working people?What we have seen consistently throughout the process of the raising of concerns about foreign trusts and the Panama Papers is that the Government has chosen its side. It has chosen to be on the side of the mega-wealthy. It has chosen to be on the side of tax-evaders and it leaves hard-working New Zealanders questioning their commitment to the tax system. It is human nature—if someone else is getting away with it why should I do my fair share? It is this Government that is enabling—facilitating to use John Shewan's word—tax evasion by the rules that it has put in place on foreign trusts and by ignoring the advice that it has been given consistently since 2013 that something needs to be done. So the answer to whose side this Government is on is clear: it is not on the side of hard-working New Zealanders; it is on the side of the mega-wealthy.If we go through the history of this we start in August 2013 when the Inland Revenue Department (IRD) said to finance Ministers and the Minister of Revenue that there were concerns about our foreign trust rules. The rules continued to attract criticism including claims that New Zealand was now a tax haven in respect of foreign trusts. IRD went on to say: This is largely because 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 is the IRD saying that in 2013. It was concerned because the number of foreign trusts was growing and growing fast.If we look today there are 11671 foreign trusts—that has doubled since 2011. Mr Woodhouse and others are keen to say: "Oh this is the regime that's been in place since the Labour Government brought it in in 1988 and then it was updated in 2006." The first time the IRD raised a problem was in 2013. It raised a problem because the problem was growing under National's watch. It had changed other rules around look-through companies it had changed other rules around investment entities and the system was starting to be gamed. The number of foreign trusts grew.So IRD officials continued to voice their concern and they raised it in papers in August 2014 again in November 2014 and again in December 2014. In November 2014 they actually had a table in that document that listed off the work that was already under way. It included the review of foreign trusts and it included a paper on that review due to be with the Minister of Revenue in December 2014. That was a critical moment in this time line because it was that report when it was reported on that led the foreign trust industry to think that it was under threat. Its little game of being able to sell itself into the world as being a place with loose disclosure arrangements where people could hide their money was starting to be called on.So what does the foreign trust industry do? It uses its inside influence on the National Government. Ken Whitney—the Prime Minister's close adviser his lawyer his funds adviser—writes in to the then Minister of Revenue. He says: "I have spoken to the Prime Minister about this"—the review of foreign trusts—"and he advised that the Government has no [current] plans to change the status of the foreign trust regime [applying in New Zealand]. The PM asked me to contact you to arrange a meeting at your convenience with a small group of industry experts." That is how it works under this Government—the inside influence. The review that the officials knew was merited had already got under way and then the inside influence of the foreign trust industry comes along. Ken Whitney comes along and uses his contact with John Key. Todd McClay says: "The Prime Minister wants this. I'll respond to it." The meeting happens and the review is cut dead.The officials knew. They were concerned about New Zealand's reputation as a tax haven in respect of foreign trusts. They were concerned as we went out into the world and asked other countries to be part of a crackdown on multinationals not paying their tax that people would laugh at us if we were part of facilitating tax evasion because of our foreign trust rules. They were concerned—the IRD officials—because it does not matter whether it is a Mexican taxpayer a Brazilian taxpayer or a New Zealand taxpayer who has been ripped off by somebody. We need the whole world working together on this and if we are part of facilitating tax evasion then we are on the wrong side.All of those things were known and the Government stopped the review stone dead so that when it was raised again in light of the Panama Papers in April this year what could we expect from the Government at that point? Well what we heard from the Government was: "There's no problem. We have full disclosure of our foreign trusts." We were told that the trust regime was broad and deep and as Julie Anne Genter said people who raised concerns were described as being "barking mad". That was the first reaction of this Government. At his press conference when the Panama Papers first came out John Key's instincts were to protect the foreign trust industry and the mega-wealthy—Ron Mark: His default. That's his default position.GRANT ROBERTSON: —instead of protecting New Zealand's reputation and the integrity of our tax system. And it is Mr Mark his default position to look after the people that he grew up with—Ron Mark: Corporates.GRANT ROBERTSON: —in the corporate world. That is what John Key's default position was—not to protect hard-working taxpayers but to say: "The foreign trust industry that's who we've got to protect." But the pressure came on and it is pretty rich of Michael Woodhouse to blame Opposition parties for reputational damage. Mr Woodhouse the reputational damage comes from a system that people can see is a tax haven for foreign trusts. Exposing that is actually a public service and that is why the Panama Papers forced the Government to act. Mr Woodhouse cannot claim that there would have been any action on tightening the disclosure rules on foreign trusts because he spent 3 years not doing anything. Then the Panama Papers came out and the Government was forced to act.Then John Shewan's report comes out and it tells us that our foreign trust regime is facilitating the hiding of funds and the evasion of tax that the system is inadequate and not fit for purpose and that the risks are high of it being exploited. That is not full disclosure. That means the Prime Minister was wrong. It means Bill English was wrong when he said that anyone who said we had limited disclosure arrangements was wrong. This is a Government that has deliberately not acted on these issues. It is a Government that chose the side it is on and it chose to protect the interests of the mega-wealthy.People have asked why we should care. We should care because today we learned that inequality in New Zealand is growing; 60 percent of the wealth in this country is in the hands of the top 10 percent. We have a massive problem with inequality in New Zealand. We have a massive problem with every New Zealander getting the one thing we thought everyone in New Zealand would get: a fair go. That is not on the table if you are in a household in that bottom 40 percent of New Zealand taxpayers who own only 3 percent of the wealth. We need a tax system that supports those people—the people who want to get ahead; the people who want their families to be able to buy a home their children to be able to buy their first home; the people who want their children to get a decent education. We need a tax system that backs that up and that is a tax system where every New Zealander pays their fair share. This Government has let New Zealanders down. It does not have its priorities right. It is a Government that is on the side of the mega-rich of the wealthy and it has been caught out. John Shewan's report forces it to act. It could go further. There should be a public register. We need a public register so that it is not needle in a haystack territory to try to find out what is happening with these trusts. We have got a public register for companies; we have got a public register for land; why can we not have one for these foreign trusts?The Government could go further than John Shewan's report but it will not. It will not because it does not care about those hard-working New Zealanders. It has chosen its side: the side of the tax-dodgers and the tax-evaders. On this side of the House we have chosen our side: New Zealanders—hard-working New Zealanders who deserve a fair go."