Demands for inquiry into NZ trust laws

  • 08/05/2016

Opposition parties are repeating their demands for an expanded inquiry into the New Zealand's trust laws in the wake of Prime Minister John Key being singled out by the Panama Papers whistleblower.

Mr Key was the only world leader criticised in the anonymous leaker's first public statement, and was accused of being quiet about New Zealand's role in enabling financial fraud in the Cook Islands.

The Cooks are self-governing in "free association" with New Zealand. Investors in the Cooks pay no income tax or capital gains tax.

But Mr Key said yesterday the whistleblower was confused as New Zealand only had defence and foreign policy responsibilities for the Cooks.

"I have as much responsibility for the tax in the Cook Islands as I do for tax in Russia."

The Cook Islands accusations also may no longer be relevant, with tax loopholes now tied up.

"A lot of the Cook Islands issues were changed post-1988. These (Panama) papers go back 40 years," he said.

But his political opponents want changes to an inquiry into trust laws by tax expert John Shewan.

Green co-leader James Shaw says Mr Key should clean up the foreign trusts industry to restore the country's good name.

"This shows why the Shewan inquiry needs to be led by a panel, not just a single industry insider," he said.

Labour deputy leader Annette King also repeated calls for a full independent inquiry while NZ First leader Winston Peters said the country was suffering serious damage to its reputation.

"Mr Key's decision to turn a Nelsonian eye to activities happening on his watch will be regretted by right-thinking New Zealanders," he said.

The Panama Papers - millions of documents leaked from Mossack Fonseca, a Panamanian law firm that specialises in helping clients minimise their tax exposure - have exposed more than 11,000 trusts in New Zealand being used by foreigners.