Panama leaker confused about NZ-Cook relations -- PM

Prime Minister John Key (Simon Wong)
Prime Minister John Key (Simon Wong)

The Panama Papers whistle-blower must be European and somewhat confused, says Prime Minister John Key after he was accused of being "curiously quiet" over tax havens in the Cook Islands.

The Cook Islands is a former New Zealand colony but is now self-governing in "free association" with New Zealand.

Investors in the Cooks pay no income tax or capital gains tax.

It has been branded a tax haven and was the focus of the Wine Box inquiry in the 1990s.

That was the only reference to Mr Key or New Zealand in an 1800-word manifesto by the leaker, who calls himself "John Doe".

But Mr Key says the Cook Islands accusations may no longer be relevant, with tax loopholes now tied up.

"Prior to 1988 there were issues with New Zealanders avoiding their tax by having a structure in the Cook Islands. In 1988 that all closed down and subsequently there has been no issues," says Mr Key.

"So that well and truly predates me [and] has nothing to do with me."

Mr Key believes John Doe got confused about the level of responsibility New Zealand has for the Cook Islands.

"New Zealand has responsibility for foreign policy and defence of the Cook Islands but not for tax.

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

The Prime Minister says the only time New Zealand gets involved in Cook Island tax affairs is when officials give advice on "transparency" and "best practice".

He added that if the leaker reveals any relevant, new information that hasn't been resolved, the Government would more than happy to propose changes.

The Panama Papers -- millions of documents leaked from Mossack Fonseca, a Panamanian law firm that specialises in setting up foreign trusts -- have exposed a lack of scrutiny around foreign trusts in New Zealand.

The Government has appointed tax expert John Shewan to review New Zealand's trust laws.

But both Labour and the Greens say it is not taking the issue seriously and have repeated calls to broaden the inquiry.

"John Key's failure to take this issue seriously and to commit to an independent inquiry is bad enough, but now he and New Zealand are being singled out for supporting highly unethical or even illegal behaviour," says Labour finance spokesperson Grant Robertson.

Greens finance spokesperson Julie-Anne Genter says the Government needs "a much more comprehensive inquiry into allegations New Zealand is becoming a destination of choice for ultra-wealthy people seeking to avoid paying tax in their home countries".

Newshub. / NZN