Greens: Super tax havens 'double standard'

  • Breaking
  • 25/09/2013

The Greens have accused the Government of a double standard in allowing the New Zealand Superannuation Fund to invest through overseas tax havens.

But Finance Minister Bill English says he's not at all concerned.

The Cayman Islands are known for white sand beaches, Caribbean diving and, of course, tax avoidance. It's one of four tax havens where your superannuation dollars are invested.

"On the one hand the New Zealand Government is saying we should crack down on these international tax havens, but on the other hand the New Zealand Government is effectively using these tax havens to minimise some of their tax," says Green Party co-leader Russel Norman. "There clearly is a double standard."

The Superannuation Fund manages $23 billion – $3.4 billion is invested in New Zealand and $1.6 billion, or 7 percent of the fund, is channelled through tax havens the Cayman Islands, Isle of Man, British Virgin Islands and Mauritius.

"The Super Fund is always looking for opportunities that will give a good return," says Mr English. "No, we're not concerned about [tax havens]. It's not going to have any impact on New Zealand's reputation."

Reputation is important here. By law, the Superannuation Fund can't make investments that prejudice New Zealand's international reputation.

"I don't think the OECD would look fondly on the New Zealand Government using tax havens," says Dr Norman.

The money's invested through a joint fund, which pays tax in the US and on profits in New Zealand but goes through the havens to avoid paying more to the taxman.

"If it was such a big advantage I'd presume they'd invest everything there, but they don't," says Mr English.

"It means we're supporting an international system of tax avoidance, which is bad for regular taxpayers," says Dr Norman.

The Government's talked tough on tax havens in the past, but says in this case there's no problem. As for the Superannuation Fund, it wasn't interested in doing an interview but insists there's no secrecy here – it's a common and legal practice.

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source: newshub archive