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Hooton and Farrar slag Key – With friends like these…

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The Panama Papers continue to simmer and National’s greatest fear is that the public will link tax-dodging to the current government. (Up-coming political polls will be interesting to see.)  But that is not all that National’s hierarchy has to worry about.

Closer to home, National is facing “Third Termitis” and an increasingly cynical view of  the government and it’s leading figures – even from within.

Some recent ‘digs’ at  Dear Leader John Key by right-wing commentators – ostensibly friendly to National – are either miscalculations, or a subtle hint that respect for Key’s leadership style is waning.

Case in Point #1 – David Farrar

On 2 May, National Party pollster and  apparatchik, David Farrar made a guest appearance on Jim Mora’s afternoon Panel (hosted that afternoon by Jesse Mulligan), on Radio NZ. Along with lawyer Mai Chen, they discussed the issues of the day;

“…foreign Trusts and how much the Prime Minister was involved in our tax laws.”

The issue of what Key’s lawyer – Ken Whitney –  said to then-Revenue Minister, Todd McClay arose amongst the Panelists, and host.

Ken Whitney, the executive director of tax-trust specialist, Antipodes Trust Group, wrote to McClay on December 3, 2014, over concerns Inland Revenue were reviewing the sector;

“We are concerned that there appears to be a sudden change of view by the IRD in respect of their previous support for the industry. I have spoken to the Prime Minister about this and he advised that the Government has no plans to change the status of the foreign trust regime.

The PM asked me to contact you to arrange a meeting at your convenience with a small group of industry leaders who are keen to engage to explain how the regime works and the benefits to NZ of an industry which has been painstakingly built up over the last 25 years or so.”

Key refuted that he had “advised that the Government has no plans to change the status of the foreign trust regime“;

“One of the members of the tax, that group, the foreign trusts, asked me about it. I said I haven’t got a clue what you’re talking about, I don’t think that’s right that there are changes, but go and take it up with the minister.

Subsequently there’s miles of paperwork that shows all the stuff he did, I had no other involvement other than that – it happens every day to me, people come up to me all the time and say ‘what about x or what about y?’ and I say take it up with the relevant minister.”

Bear in mind when this conversation took place: December 2014.

Key is clear in his recollection of the conversations he had with his then-lawyer, Ken Whitney, and then-Revenue Minister, Todd McClay;

Mr Key was insistent he made clear to McClay the connection between himself and Mr Whitney, when he alerted his minister to the approach from his lawyer about the trust rules regime.

“I’ve seen his comments, what he basically said was he couldn’t absolutely recall but it was two years ago but I absolutely told him – 100 percent.  It’s a few years with an oral conversation that lasted a few seconds but I definitely told him.”

Which is intriguing, as Key has a somewhat dubious reputation for having a shockingly bad memory of events that are uncomfortable for him to recall and discuss. Especially when journalists are present.

A particularly extraordinary example of Key’s inability to retain recollection of events took place in November 2014, when Key “forgot” a txt-conversation he had had with right-wing blogger, Cameron Slater;

“He sent me a text one time, but I can’t remember when that was.”

In fact, the txt-conversation with Slater took place only eighteen hours previously. Which resulted in headlines like this one;

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John Key 'genuinely couldn't recall' text messages - mediaworks - Cameron Slater

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When the issue of John Key’s memory and reputation for lapses arose, Farrar made this revelation;

@10.06

“Oh I’m not sure I quite accept the assertion there. I found in my experience the Prime Minister has a remarkable good memory on things. There was – I had a conversation with him the other day on something, where he referred to ‘Oh I think there was something in January, um, 2007’, and he was right. It took me half an hour to look it up, but he remembered this thing, from what was it, nine years ago. So I think actually he generally has a very good memory, just not a perfect one.”

Farrar’s willingness to share this aspect of  John Key’s mental state is reassuring. It means our esteemed Dear Leader is not suffering on-set Alzheimers  Disease or any similar brain-debilitating condition, when he insists he cannot re-call an inconvenient event.

It just means Key is lying.

Thank you, David Farrar, for clearing that up.

Case in Point #2 – Matthew Hooton

The next person to offer a singularly unflattering insight into Key’s personality was right-wing commentator and a member of the neo-liberal cadré, Matthew Hooton.

Hooton has a regular 11am appearance on Radio NZ’s Nine to Noon show, where he offers his views from a right-wing, free-market perspective. He speaks frankly on a variety of issues-of-the-day and can be as highly critical of National; it’s policies; and leadership, as he is on the Left.

Hooton’s own investigation into  Murray McCully’s corrupt Saudi farm-in-the-desert deal should be required-reading for all New Zealanders, regardless of their political persuasions. As political scientist, Bryce Edwards wrote in May last year;

Perhaps the strongest views are from Matthew Hooton, who has two columns in the National Business Review (which have just had their paywalls removed). The first column, Gulf games fail to deliver, gives the background to the fallout between the New Zealand Government and Saudi Arabia, with Hooton largely blaming John Key. According to Hooton’s story, the Saudi businessman was led to believe that the incoming National Government of 2008 would resume live sheep exports.

Once in power, however, Hooton says that Key changed his mind on hearing that TVNZ would broadcast “a programme critical of live sheep exporting. In a panic, and fearing further criticism from the Green Party’s Sue Kedgley, Mr Carter was ordered by Mr Key’s media staff to go on TV and rule out any resumption of the trade, ever. This was later confirmed to the Saudis as New Zealand’s new position and negotiations ceased. Furious, Mr Al-Khalaf used his influence with the Saudi royal family to ensure the FTA was put on ice”.

Hooton’s second must-read column, Flying sheep endanger McCully, turns the focus to the Minister of Foreign Affairs, suggesting that his subsequent handling of the mess could lead to his sacking. Hooton suggests the whole deal is “implausible” in terms of the bizarre farming arrangements and partnership that the Government has established.

He doubts that the promised innovative “agrihub” will actually eventuate and “If not, people might start comparing Mr McCully’s dealings with Mr Al-Khalaf with those with Mr Roberts 15 years ago. For which Mrs Shipley sacked him”. Hooton says “Key’s nervous ‘yup,’ when asked if he had confidence in his foreign minister, betrayed concern over where the story may head”.

On 9 May, filling his regular slot on Nine to Noon’s political panel, Hooton voiced his views on the Panama Papers and how – in his view – our Esteemed Dear Leader was handling the growing scandal.

As Hooton discussed cleaning up the trust sector in New Zealand,

“That is despite his government’s obvious negligence in not legislating for greater transparency around the trust industry years ago, when reputable trust lawyers themselves were lobbying for it.”

– one particular remark caught my attention,

@ 2.19

“… From talking to the people in the industry, is that some of the people I’ve been talking to, who’ve been using other consultants up till now I should say, they’ve been trying to lobby John Key on this issue since when he was Leader of the Opposition. And they’ve been wanting him to make the industry more transparent. And Robin Oliver [former head of IRD] was on Morning Report this morning and talked about this. And the people that I’m talking to anyway, they tell me that John Key’s consistently said to them, ‘Oh yeah, absolutely, totally agree, we must sort that out, yep, yep, the government will do that’.

But absolutely nothing has happened. And I don’t think that’s necessarily – there’s nothing corrupt about that. It’s how John Key rolls. It’s a refrain I hear from people in the business community, the education sector, the health sector, you name it, John Key always just sez to people what he thinks they want to hear, and there doesn’t seems to be any follow up.”

“John Key always just sez to people what he thinks they want to hear…”  – a very brief, off-the-cuff remark – but one which goes some way to perhaps explaining Key’s popularity with the public. Even those who might stand to be disadvantaged by his policies.

An example of occurred in 2008, during the PSA Conference, when Key made a firm committment resiling National from any future asset sales;

“There’s no agenda to sell assets. There will be no asset sales in the first term – in fact there may never be asset sales in the year’s ahead.”

His speech can be viewed here.

In the same video clip, Key also resiled from weakening Union power;

“Yes, I support Unions, and I support New Zealanders’ rights to join unions. And no, we’re not proposing to change the Employment Relations Act in a way that weakens unions…”

Seven years later, amendments to the Employment Relations Act were pushed through Parliament. The amendments weakened Union power;

National has highlighted employment law changes as one of its key priorities in the first 100 days in Government. Proposed changes will affect collective agreements, the 90-day trial period, strike action and rest and meal break provisions.

[…]

The changes will give employers more power during the bargaining process.

As Hooton pointed out, “John Key always just sez to people what he thinks they want to hear…” – and Key was speaking to the 2008 PSA Conference.  Union delegates were told precisely what they wanted to hear.

Coupled with Farrar’s comments about Key’s “very good memory” (and by a process of elimination, therefore a liar) – and we have two right-wingers close to our esteemed Dear Leader  who have shared their personal observations with “how John Key rolls“.

However, the public may not be as gullible to Key’s duplicitous charms as many would think.

In October 2009, Key’s popularity rating (3News/Reid Research Poll) was at a staggering height of  55.8%.

By July 2015, his popularity rating had fallen to 38.3%.

Whether consciously or sub-consciously, perhaps the public are coming to the same realisation that Farrar and Hooton are at; our Prime Minister is a con-artist.

And a damned good one.

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References

Radio NZ: The Panel with Jim Mora – 2 May 2016

NZ Herald: The Antipodes email – John Key, his lawyer and foreign trusts

Radio NZ: PM’s private lawyer lobbied government on foreign trusts

Radio NZ: I told McClay about lawyer, says Key

Fairfax media: How is John Key going to spin this one?

TV3 News: John Key ‘genuinely couldn’t recall’ text messages

Radio NZ: The Panel with Mai Chen and David Farrar – Part 1 (alt. link) (audio)

NZ Herald: Political roundup – The bizarre ‘bribery’ and flying sheep scandal

Radio NZ: Key ends week deeply satisfied

Radio NZ: Nine to Noon – Political commentators Mike Williams & Matthew Hooton

Radio NZ: Nine to Noon – Political commentators Mike Williams & Matthew Hooton (alt. link) (audio)

TV3 News: Labour: Key promised no job cuts, asset sales in 2008 speech

TV3 News: Highlights from Key’s 2008 ‘no job cuts’ speech (video)

MoBIE: Amendments to the Employment Relations Act 2000 (March 2015)

Radio NZ: National’s proposed labour laws

Other bloggers

The Paepae: John Key is getting a reputation as a liar

Previous related blogposts

The slow dismantling of a Prime Minister continues

The Mendacities of Mr Key # 16: The sale of Kiwibank eight years in the planning?

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This blogpost was first published on The Daily Blog on 17 May 2016.

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Panama Papers: Matthew Hooton’s Alternate Universes on Twitter and Radio NZ

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ft-paraisos-fiscales

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On 8 May, Martyn Bradbury posted the below screenshot, with an associated story (<a href=’http://thedailyblog.co.nz/2016/05/08/matthew-hooton-and-the-panama-papers-why-does-he-sound-so-frightened/’>Matthew Hooton and the Panama Papers – why does he sound so frightened?</a> ) .

Reading Matthew Hooton’s “tweets” and his re-Tweets of other comments – many of which seemed to verge on the hysterical  – it was apparent that our favourite right-wing commentator was beside himself at what the Panama Papers had uncovered (and continues to uncover);

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Matthew Hooton - twitter - panama papers

[Image courtesy of Martyn Bradbury]

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There is a preternatural volcanic fury from the Right – many, if not most, of whom  view taxation as “theft” and tax-havens as a legitimate counter to governments  who cheekily demand tax from it’s citizens and corporates.

The same Right believe that taxation is “wasted” on “frivolous” matters such as public health, public education, welfare, environmental protection, housing the poor, etc. Only funding for Police and the Armed Forces is considered justified. (To protect their hoarded wealth from increasingly poor , frustrated, and angry workers.)

Rather surprisingly, Hooton’s comments were toned-down for Radio NZ’s Nine To Noon political panel on 9 May;

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Political commentators Mike Williams & Matthew Hooton - radio nz - nine to noon panel - 9.5.16

 

(alt. link)

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Listen to Hooton’s participation on the panel, and compare his measured commentary on Radio NZ versus his  irrational sniping on Twitter.  It’s almost as if we’re seeing and hearing two completely different Matthew Hootons from Parallel Universes; our Earth and Earth 2.

Earth 2 must be a lovely place to live, if Matthew v2 is anything to go by.

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References

Twitter: Matthew Hooton

Twitter: Mark Hubbard

Libertarianz: Taxation

Libertarianz: Justice

Libertarianz: Defence

Radio NZ: Nine to Noon – Political commentators Mike Williams & Matthew Hooton  (alt. link) (audio)

Previous related blogposts

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This blogpost was first published on The Daily Blog on 11 May 2016.

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Foot in Mouth award – Former ACT MP exposes flaw in free-market system

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Foot In Mouth Award

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Meet Ken Shirley;

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ken shirley ACT MP

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Most folk won’t remember who Ken Shirley was, prior to his current ‘gig’ as  CEO of the Road Transport Forum (RTF), representing road transport interests since July 2010.

From 1984 to 1990, Shirley was nominally a Labour Party MP. He was closely aligned with the likes of Roger Douglas, Richard Prebble, and other right-wingers who had seized control of the party during the 1980s.

From 1996 to 2005, Shirley was an ACT Party MP. As such, he was an acolyte of  the neo-liberal school of economics and a strong adherent of free market forces. Part of ACT’s policies is to scrap the minimum wage.

Indeed, to under-score ACT’s abhorrence of the minimum wage, ACT’s current leader (and sole MP), David Seymour, condemned a recent rise in minimum wage levels. On 26 February this year, Seymour was scathing;

“The new $15.25 minimum wage will hit regional employers especially hard… In Auckland, $15.25 might not sound like much, but small businesses in the regions who generally charge less will struggle to bear the cost. Hikes to the minimum wage will discourage new employment, and lead to more lay-offs and business failures.

The first employees to suffer will be young, low-skilled workers who won’t be offered a chance to prove their worth. Pulling up the jobs ladder will only add to poverty in low-income areas.

This is a wage set for the distorted Auckland economy. Why should the rest of the country have to bear the same costs?”

[Fun Fact: As a Parliamentary Under-Secretary, Seymour is currently a taxpayer-funded beneficiary on a salary of $185,098 p.a. – which equates to nearly $89 per hour. One wonders if “small businesses in the regions who generally charge less will struggle to bear the cost” of Seymour’s salary?]

But returning to Ken Shirley; as an ex-ACT member of Parliament he is still most likely an  advocate for the abolition of the minimum wage.

On 5 May, Shirley was invited to be a commentator on Radio NZ’s afternoon Panel, hosted by Jim Mora;

 “Ken Shirley of the Road Transport Forum discusses what’s behind logging truck crashes and what needs to be done.”

At one point in the discussion, a suggestion was made that low wages in the trucking industry is not attracting the most highly-skilled and experienced workers;

@ 7.50

Jim Mora: “How bad do you think, Ken, is this situation with truck driving?”

Ken Shirley: “Oh, the spate we’ve had in Northland is just unacceptable. There’s no excuse for roll-over[s]. We know we have some difficult roads in New Zealand with topography, Northland’s is particularly difficult.

But there’s an obligation on the drivers and the forestry companies who hire the drivers to make sure they drive to the conditions. That’s the obligation on all drivers, and the spate we’ve had is just unacceptable, and I think inevitably it seems it’s not mechanical failure, it is driver error.

Whether it’s speed, inattention, or fatigue.”

Jim Mora: “So, it’s a…what, is it a hiring of drivers problem, hiring the wrong drivers, or is it a keeping-costs down problem, Ken? What do you think?”

Ken Shirley: “Well, the two are related of course. We have a chronic shortage of H5 drivers in New Zealand. That’s the heavy combination driver, the truck and trailer. It’s a global problem, but it’s particularly severe in New Zealand at this time. We’ve had it for many years, but with the activity in the economy now, that we are currently having, there is a chronic shortage of drivers.

Many of our members throughout the country are just saying they simply cannot get drivers. And I guess inevitably, you can, in that situation, such a tight situation, out of desperation, you can perhaps hire someone who’s not as skilled as you would like or need, out of sheer necessity. But at the end of the day, there’s no excuse. This should not be happening. We’re taking it very seriously.

We’ve actually instigated a series of roll-over prevention seminars in conjunction with NZTA around the country. They started some six weeks back. And these are actually very good seminars. But we have to educate the drivers, the loaders, the dispatchers, the transport operators themselves, but we must not have this level of roll-over.”

Jim Mora: “Ken, is it the… what is it deep down? Is it the meager wages paid, as some people are saying? You’re just not attracting the skills to the industry?”

Ken Shirley: “Ah, no, you do, it’s, you know, you can have a driver error. But it’s, it’s… you have to have better training, better awareness, that has to be the answer.”

Jim Mora: “So, there was this work-force development strategy, wasn’t there, ah, put into place a wee while back to try and try to entice more people to become truck drivers because of that shortage. But what is the point of a work-force development strategy if we know what the problem basically is, which I’m interpreting as maybe a lack of training and a lack of procedures put in place in the industry – [garbled].”

After a further exchange between Jim More, Peter Elliot (one of the panelists), and Ken Shirley, the host returned the discussion to the matter of wage rates;

Jim Mora: “It does seem though, with the wage rates that we see talked about, that you might not be getting the optimum recruits for the job? Is that a fair criticism, or not?”

Ken Shirley: “Well we know that the skilled labour market across the economy, whether it’s a diesel mechanic, a skilled driver, all of of those industries are, are, reporting severe chronic shortages. And because they are so highly skilled, reliant on a high level of, of, of, experience, when there is a chronic shortage, there is a temptation to often, out of desperation [to] take what you can get. And, and, that’s, that’s when you start to get into issues that like we are seeing and that’s when you start introducing potential road safety problems.”

Jim Mora: “I understand, but would you solve your chronic shortage if you paid higher wage rates?”

Ken Shirley: “Well, indeed, and all the members I speak to want to, but there’s been a race to the bottom, it’s –

[panelist scoffing (?) noise]

such a fiercely competive industry…”

Shirley’s admissions are astounding.

His comments appear to be a frank admission that the free market has experienced a spectacular  failure on a key point in the Northland logging industry;  that if there is a shortage of  skilled labour, the price of that labour (heavy-truck drivers in this case) should rise – not fall – to attract skilled labour. That is a basic tenet of supply and demand in the free market system.

As the guru of free market economics, Milton Friedman put it;

“But when workers get higher wages and better working conditions through the free market, when they get raises by firm[s] competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. “

And Investopedia described a free labour market thusly;

Assuming there are a large number of employers in a region, or that workers are highly mobile geographically, the wages that a company will pay workers is dependent on the competitive market wage for a given skill set. This means that any company is a wage taker, which is simply another way of saying companies must pay competitive wages in order to obtain workers.

None of which seems to be happening in Northland at present.

To the contrary, logging companies – according to their own spokesperson, Ken Shirley – are engaged in a “a race to the bottom” with drivers’ wages.

To compound the problem, in April of this year, Shirley specifically opposed and condemned outright any attempt to increase the wages of drivers;

“The link between remuneration and road safety is highly questionable and as a recent PWC report highlights, the system will result in a net cost to the Australian economy of more than A$2 billion over 15 years.

It is therefore very concerning that the Labour Party here advocated for the same policy and campaigned on it during the last election.”

National awards and government-imposed orders are not the way to lift industry wage rates or make the industry safer. All they do is saddle the industry with inflexible and time-consuming obligations and additional costs.

Let’s not repeat Australia’s mistake in New Zealand. It has been proven that national awards burden the economy and cost jobs and I hope that Labour and other political parties here will accept that reality and ditch the concept once and for all.”

Shirley’s comments last month are in stark contrast to his public lamentations on Radio NZ.

Not only has the free market failed in one of it’s key tenets – but Shirley is actively opposed to raising wages by any means necessary, to attract skilled, experienced truck drivers.

This should serve as a clear lesson that the innate contradictions of the free market ideology – many of which are little more than articles of faith – will eventually become more and more apparent.

Shirley has inadvertently helped with the slow dismantling of the neo-liberal fantasy.

Appendix1

Unfortunately, knowing how the system operates  in this country,  it will takes catastrophic events with several tragic deaths, before the government acts on this growing problem.

That’s how we roll in New Zealand.

Over bodies.

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Tourist dies in logging truck crash near Matamata

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References

Wikipedia: Ken Shirley

ACT NZ: Welfare and family

ACT NZ: Minimum wage hike whacks regional employers

Parliament: Current MPs – David Seymour

Parliament: Salaries payable under section 8 of Members of Parliament

Radio NZ: The Panel with Peter Elliott and Susan Guthrie

Good Reads: Milton Friedman

Investopedia: Breaking down ‘Demand For Labor’

Scoop media: Government imposed remuneration orders have no place in NZ

NZ Herald: Tourist dies in logging truck crash near Matamata

Additional

Road Safety Remuneration Tribunal: About road safety remuneration orders

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John Key says I'd like to raise wages but I can't

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This blogpost was first published on The Daily Blog on 10 May 2016.

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Letter to the editor – Dear Leader loses the plot in Parliament

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Frank Macskasy - letters to the editor - Frankly Speaking

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from: Frank Macskasy <fmacskasy@gmail.com>
to: NZ Herald <letters@herald.co.nz>
date: Thu, May 12, 2016
subject: Letter to the editor

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The editor
NZ Herald

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The Prime Minister’s recent responses to revelations from the Panama Papers are becoming more unpredictable and bizarre by the day.

According to John Key, NZ is “only a bit player” when it comes to foreign trusts, even though we are mentioned 61,000 times in the Panama Papers.

John Key’s former lawyer, Ken Whitney, assured the Prime Minister that he had no connections to tax-haven promoter, Mossack Fonseca. The Prime Minister was satisfied with those assurances.

Then we learn that Whitney did indeed have close links to Mossack Fonseca. Which Key still refuses to accept.

Whitney was also part of a group of lawyers, with working connections to Mossack Fonseca, who lobbied Revenue Minister Todd McLay to “persuade” the IRD to discretely drop it’s review of foreign trusts in NZ.

On 11 May, Key’s hysteria forced the Speaker of the House to remove the Prime Minister from the Debating Chamber. This was after Key falsely accused the Red Cross, Amnesty International, and Greenpeace of having trusts with Mossack Fonseca.

The Prime Minister has lost the plot on this issue.

All New Zealanders are required to pay their taxes.

Why is Key assisting the wealthy to avoid paying their taxes, to their respective countries?

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-Frank Macskasy

[address and phone number supplied]

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References

Radio NZ: Panama Papers hotly debated in Parliament

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Panama Papers cartoon

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Dodgy tax havens and even dodgier Peter Dunne’s memory

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“To put it bluntly, if the label ‘tax haven’ is being bandied about now as it is, sticks, then that’s extremely damaging. You think of the way we perceive other countries that we’ve historically labelled as tax havens. We don’t view them credibly, and I think that’s the big risk to New Zealand.” – Peter Dunne, TVNZ’s Q+A, 2 May 2016

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Against a swirling back-drop of revelations surrounding the Panama Papers, Mossack Fonseca, John Key’s lawyer, Ken Whitney, then-Revenue Minister Todd McLay,  the IRD dumping a review into foreign trusts, and New Zealand’s reputation for offering secret trusts as part of the tax-haven industry,  TVNZ’s Greg Boyd interviewed former Revenue Minister, Peter Dunne for Q+A on 2 May;

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peter dunne interviewed on Q+A by Greg Boyd

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Boyd’s first question to Dunne seemed innocuous enough, setting the basis of the interview. Dunne’s response appeared unremarkable;

Greg Boyd: “When you were in the job, if the IRD had concerns about this country’s international reputation, how seriously would you have taken that?”

Peter Dunne: “Very seriously. And the way it works is that they report on a series of issues that are both current in the New Zealand tax environment or the international tax environment, and clearly the Government would be foolish not to take heed of that advice. I have to say that at the time I was minister, the big issue of concern that was just beginning to bubble related to the Googles and the big multinationals and the share of tax they were paying. The issue of foreign trusts was on the edges of that, but I didn’t receive any specific advice from the IRD at that time that they were a problem.”

To put some context to Dunne’s response above, first bear in mind that Dunne was Revenue Minister across two governments, Labour and National, from October 2005 to  June 2013, when he abruptly resigned

…after an investigation into how a top-secret report on the GCSB was leaked to media pointed to him.

Eighty-six emails were sent between Mr Dunne and Dominion Post reporter Andrea Vance in the lead up to the leak but Mr Dunne turned down requests to make them public.

Edited copies of the emails from Mr Dunne show 44 of them discussed the GCSB report, and he planned to meet with Ms Vance the day before she went public…

But how credible was Dunne’s assertion on last week’s Q+A that;

“…The issue of foreign trusts was on the edges of that, but I didn’t receive any specific advice from the IRD at that time that they were a problem.”

– when in May 2012, New Zealand and Russia had been removed from the  European Union banking and corporate “white list” over this country’s frighteningly inadequate  money-laundering controls?

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New Zealand removed from EU 'white list' - money laundering - tax havens

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As reported by Fairfax’s Michael Field, Latvia’s Deputy State Secretary on financial policy issues in the Ministry of Finance, Arina Andreicika, stated;

“I would like to inform you that Latvia has intended to exclude New Zealand and Russian Federation from the list of countries whose legal requirements of money laundering and terrorist financing prevention are equivalent to legislation of the European Union.”

Our removal from the EU “white list” had put New Zealand in the same league as the corruption-ridden Russian Federation.

Gareth Vaughan, from Interest.co.nz, reported;

New Zealand’s dumping from the list also comes amid growing publicity around New Zealand registered companies being linked to crime overseas. This includes a report by the Organized Crime and Corruption Reporting Project on how Tormex Ltd, a New Zealand registered company, allegedly laundered US$680 million through a Latvian bank account. It’s just one of many examples of entities exploiting New Zealand’s simple company registration regime. Another is the General Equity Building Society, which claims to hold about US$5.5 billion of equity through unnamed mines, gold, silver and granite ore.

In the same story, Vaughan added,

The World Bank and International Finance Corporation rank New Zealand the easiest of 183 countries surveyed in which  to start a business. Commerce Minister Craig Foss told interest.co.nz in April the Government had no plans to tighten company registration rules.

In the previously mentioned Fairfax story, Michael Field reported;

On the Auckland shell company accused of laundering $680m at a Riga bank, Foss said it was removed from the register in 2010 because it failed to file an annual return.

Too late. The damage to our reputation had been done.

In May 2012, when the European Union’s announcement became public, Peter Dunne was still Minister for Revenue. (His resignation after his alleged involvement in the leaking of the GCSB report was still thirteen months in the future.)

In November 2013, then co-leader of the Green Party, Dr Russel Norman, warned;

“Our secretive foreign trust regime and lax company registration requirements are damaging our international reputation.  Anonymous shell companies and secret trusts are one of the most common ways of moving tainted money into the banking system.”

Yet, only months earlier, as the full implications of the EU’s moves were becoming clear, evidently then-Revenue Minister Peter Dunne “didn’t receive any specific advice from the IRD at that time that they [foreign trusts] were a problem“.

However, whilst  then-Revenue Minister Peter Dunne had not received “any specific advice from the IRD at that time that they [foreign trusts] were a problem“, the Tax Justice Network had, by November 2013, “ranked New Zealand for the first time on its Financial Secrecy Index [at number 48 – see page 17 here]. New Zealand features on the Index due to our lack of transparency around foreign trusts and registered companies, and our below-average levels of co-operation with other countries when it comes to fighting international tax evasion”.

Is it Dunne’s  assertion on Q+A, really credible;

“…The issue of foreign trusts was on the edges of that, but I didn’t receive any specific advice from the IRD at that time that they were a problem.”

No, it is not credible.

As far back as October 2012, Dunne was certainly aware of the problem of secret trusts in New Zealand;

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Dunne dismisses tax haven suggestions

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The Herald report goes on to state;

Mr Dunne today dismissed the idea that New Zealand was a tax haven for foreign trusts.

“The key identifying characteristics of tax havens are secrecy and lack of transparency. Those are simply not factors here in New Zealand. Our legislation for taxing trusts is fully transparent.”

Dunne’s dismissive attitude toward tax havens and foreign trusts is starkly summed up in this excerpt from 60 Minutes on TV3’s website;

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Govt rejects tax haven claim - peter dunne - revenue minister - 60 minutes

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However, Dunne’s defensive assertions were made to look foolish and mendacious when Herald reporter, Matthew Backhouse , added;

The trusts must be registered with Inland Revenue, but are not required to pay tax and their ownership is effectively anonymous.

At the time, our esteemed Dear Leader also supported New Zealand’s involvement in secret foreign tax trusts;

Prime Minister John Key was today unconcerned by Mr Dunne’s comments.

He had not seen the 60 Minutes interview but Mr Dunne would have been using “the absolutely correct technical terms”, he said.

Mr Key said servicing foreign trusts in New Zealand was a strong and legitimate business that employed a lot of professionals and added to the New Zealand economy.

“It’s a very sensible place to house a trust.”

It is difficult to believe Dunne’s assertion that he “didn’t receive any specific advice from the IRD at that time that they [foreign trusts] were a problem“.

Especially as revelations on 60 Minutes clearly revealed that a problem with tax evasion existed; trusts were central to the rorts; and Dunne was responding to it.

Even Key referenced foreign tax trusts as he rushed to defend his then-Revenue Minister;

Key who said Dunne was right. “He’ll be using the absolutely correct technical term. There are two things, going back to my days at university – tax evasion and tax avoidance. There is actually quite legitimate business in New Zealand for servicing foreign trusts”.

In response to Dunne’s denials, Labour’s then-Revenue spokesperson, David Clark, showed amazing prescience when he warned;

“We are in danger of losing our hard-one reputation as an ethical and respectable country. Peter Dunne’s relaxed attitude to overseas tax avoidance and National’s failed attempts to create a foreign funds hub shows the Government has no concerns about us becoming the Cayman Islands of the South Pacific.”

And Dunne is now telling us that he did not know that foreign trusts were a problem?

In 2012, Dunne stated;

“The key identifying characteristics of tax havens are secrecy and lack of transparency. Those are simply not factors here in New Zealand. Our legislation for taxing trusts is fully transparent.”

The legislation may be “transparent”.

John Key, Todd McLay, and Peter Dunne are not.

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References

TVNZ: Q+A – Peter Dunne Interviewed by Greg Boyed (video)

Radio NZ: Further revelations don’t blunt PMs faith in lawyer

TVNZ: Q+A – Peter Dunne Interviewed by Greg Boyed (transcript)

Wikipedia: Peter Dunne

Southland Times: Taxing Times – New Minister of Revenue still has work to do

NZ Herald: Key’s Government

TV3 News: Peter Dunne resigns as minister

Fairfax Media: New Zealand removed from EU ‘white list’

Interest.co.nz: How NZ needs to overcome ‘deficiencies” in bank and financial institution regulation to get back on EU anti money laundering and counter terrorist financing ‘White List’

Radio NZ: NZ struck from EU list over money-laundering controls

Scoop media: Foreign trusts earn New Zealand tax haven status

Tax Justice: Financial Secrecy Index 2013

NZ Herald: Dunne dismisses tax haven suggestions

TV3 News: Govt rejects tax haven claim

Scoop media: Dunne evades tax haven questions

Additional

Liberation: New Zealand cartoons about tax, transparency and the Panama papers

Parliament: The Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011

Dept of Internal Affairs:  AML/CFT Act and Regulations

NZ Herald: Fran O’Sullivan – Key chases luck o’ the Irish

Converge: New Zealand – A Tax Haven For Super-Rich Foreigners

Previous related blogposts

When National is under attack – Deflect, deflect, deflect!

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scott cartoon - panama papers - tax havens

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This blogpost was first published on The Daily Blog on 6 May 2016.

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2016 – Ongoing jobless tally

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Unemployment logo

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Continued from: 2015 – Ongoing jobless tally

So by the numbers, for this year;

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Events

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January

February

March

April

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Statistics

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jobless rate in New Zealand 5.7 percent April 2016

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Source

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December 2015 quarter – Employment & Unemployment

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unemployment - december 2015 quarter - Statistics NZ

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Labour market at a glance

  • Unemployment rate falls to 5.3 percent.
  • Labour force participation rate falls for third consecutive quarter.
  • Employment growth rises to 0.9 percent for the quarter.
  • Annual wage inflation lowest since March 2010.

Source

Additional analysis;

However, there was also a fall in the number of people looking for work, which also contributed to the lower jobless rate.

The jobless rate fell to its lowest level since 2009, with strong growth in the construction, retail and hospitality sectors.

Job growth was strong in the Auckland region as well as Wellington and Manawatu.

But the data also showed 14,000 people had stopped looking for work for various reasons, even though the size of the workforce had increased, driven by record immigration.

This led to a fall in the participation rate – the number either in work or looking for work – which Statistics New Zealand said also reflected people who had left the labour force, such as the retired.

But an economist said the fall in participation did not tally with growth in jobs and raised doubts about the reliability of the jobs data.

“The HLFS (household labour force survey) has long had questions over its accuracy given that there have often been cases where large ‘surprises’ such as today’s outcome are thrown up. Those questions will linger today,” ANZ senior economist Philip Borkin said.

Source

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March 2016 quarter – Employment & Unemployment

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march 2016 quarter employment at a glance

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Labour market at a glance

  • New Zealand’s labour force grows 1.5 percent, the largest quarterly growth since December 2004.
  • Employment growth exceeds population growth over the quarter.
  • The unemployment rate increased to 5.7 percent, from a revised rate of 5.4 percent last quarter.
  • Wage inflation remains subdued.

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Unemployment – Decadal Comparison

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unemployment decadal comparison 2006 2016

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2006 Source

2016 Source

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Addendum1: Under-employment

The  under-employment stats;

People who are underemployed are those who work part-time, would prefer to work more hours, and are available to do so. In unadjusted terms, the number of underemployed grew by 12 percent over the year. While the number of part-time workers increased over the year, the ratio of people underemployed to employed part-time also rose – from 17.1 percent in June 2013 to 18.7 percent this quarter.

Official under-employment: up

Definitions

Jobless: people who are either officially unemployed, available but not seeking work, or actively seeking but not available for work. The ‘available but not seeking work’ category is made up of the ‘seeking through newspaper only’, ‘discouraged’, and ‘other’ categories.

Under-employment: employed people who work part time (ie usually work less than 30 hours in all jobs) and are willing and available to work more hours than they usually do.

Employed: people in the working-age population who, during the reference week, did one of the following:

  • worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment 

  • worked without pay for one hour or more in work which contributed directly to the operation of a farm, business, or professional practice owned or operated by a relative 

  • had a job but were not at work due to: own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.

Source

Addendum2: Other Sources

Statistics NZ:  Household Labour Force Survey

Addendum3: Definitions

“Labour force participation rate”  –   the total labour force expressed as a percentage of the working-age population. Labour force participation is closely linked to how the working-age population is defined.

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To  be periodically up-dated.

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Climate Change Minister Paula Bennett revealed

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70 percent pure NZ

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TVNZ’s Q+A on Sunday 24 April featured an interview with Climate Change Minister Paula Bennett. Her responses were further evidence that  National was  increasingly  unable (or unwilling) to cope with the growing threat of climate change.

Posing a series of surprisingly incisive questions and follow-ups, the ever-youthful-looking Jack Tame held Minister Bennett to account in a way that few other interviewers have done;

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paula bennett - climate change - Q+A - 24 april 2016

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Up untill now, Jack Tame’s presence in the US focused mainly on the theatrics of the  Hollywood entertainment industry or the equally-theatric Presidential primaries. They were for the most part light, breezy stories – even with the increasingly bizarre and somewhat menacing nature of the rise and rise of  Lex Luthor Donald Trump, as the potential Republican candidate.

However, on this occassion,   Tame’s Q+A interview was a masterful deconstruction of Minister Bennett’s waffle, revealing  how woefully unprepared for Tame’s skillful probing she really was.

As the thirteen minute segment progressed, it rapidly became apparent that, aside from platitudes and rhetoric,  Bennett had no real answers or  any actual, meaningful commitment to addressing New Zealand’s increasing emissions of  greenhouse-gas pollution of our atmosphere. It was as it she were still Social Welfare Minister, patiently explaining how National would be “helping” solo-mums with contraception, all the while sounding like an overly-concerned, benevolent, tough-loving  nana.

In fact, not since 2 May 2015 – when Corrections Minister Sam Lotu-Iiga was interviewed and demolished by seasoned interviewer, Lisa Owen, on TV3’s The Nation – has a government minister had their ineptitude so publicly paraded for the entire country to witness (if they so decided to tune in on a Sunday morning, at 9am.

Unfortunately, we should not be surprised that National is luke-warm on the looming crisis of climate change. Despite making very clear promises, National has broken one of it’s prime committments to the Emissions Trading Scheme – to eventually  include agriculture.

The time-line to this act of duplicity clearly illustrates National’s early promises and then reneging;

13 May 2007

In a speech by  then Opposition-leader, John Key;

In particular I’m going to speak about the biggest environmental challenge of our time: global climate change.

The National Party will ensure that New Zealand acts decisively to confront this challenge.

The scientific consensus is clear: human-induced climate change is real and it’s threatening the planet. There are some armchair sceptics out there, but I’m not one of them…

… National is committed to growing our economy. Confronting climate change will be a vital part of the policy mix for fuelling that growth…

… In the decades ahead, peoples’ perceptions around climate change will affect the brand image of New Zealand and its exports. New Zealand must take credible steps to reduce greenhouse gas emissions or risk becoming a trading pariah…

… National will have policies that reflect the fact that living on a diet of carbon will be increasingly bad – bad for the world and bad for our economy. We will have policy that encourages ‘climate friendly’ choices like windmills, hydro power and tree planting, and reduces the desire for ‘climate unfriendly’ behaviours, like burning coal…

… National will bring all Kiwis – industry, energy producers, farmers, mums and dads – closer to a shared and well-understood goal. We need to be united in our pursuit of a ’50 by 50′ target.

8 April 2010

Prime Minister John Key rejects demands  to amend the  Emissions Trading Scheme before it takes effect on the energy and transport sectors in July despite calls from business groups, farmers, and ACT.

Key tells reporters at the launch of the Global Research Alliance’s inaugural meeting on agricultural greenhouse gas emissions,

I’d say it’s unlikely it would be amended.”

6 June 2010

Climate Change Minister Nick Smith announces that whether or not agriculture comes into the emissions trading scheme  in 2015  will depend on technological advances and what other countries do.

9 November 2011

Environment Minister Nick Smith announces,

… It is not in New Zealand’s interests to include agricultural emissions in the ETS yet.“

2 July 2012

Then-Climate Change Minister, Tim Groser,  announces four amendments to the Emissions Trading Scheme;

  • Keeping the ‘one-for-two’ obligation in place until after this year. This means participants in the scheme will continue to surrender units for half the carbon they emit;
  • Maintaining the $25 ‘fixed-price option’ until at least 2015, which caps the price firms will face if carbon prices begin to rise internationally;
  • Introducing off-setting for pre-1990 forest land owners, and allocating the full second tranche of compensation where off-setting is not taken; and
  • Leaving agricultural emissions out of the ETS until at least 2015.

20 August 2012

National introduces  “Climate Change Response (Emissions Trading and Other Matters) Amendment Bill 2012”, which will remove agricultural emissions indefinitely, and will,

remove a specified entry date for surrender obligations on biological emissions from agriculture”.

National’s repudiation of it’s 2007 committment to include agriculture was complete. Despite a clear promise by our esteemed Dear Leader, agriculture was permanently omitted from the ETS.

As I pointed out in October 2012;

During National’s four years in office, they have broken several promises and the weakening of the ETS is simply one more on the list. It also further highlights  John Key’s ability to say one thing – whilst knowing full well that he has no intention of fulfilling committments, or will do completely the opposite.

An editorial in the Dominion Post, on 20 April, was no less scathing in it’s condemnation of National’s inertia;

The Government’s climate change policy has been a failure and will have to be rebuilt. There needs to be a fundamental change in the Emissions Trading Scheme, the subject this week of a damning report by the Gareth Morgan Foundation.  But other changes are also needed.

[…]

Bennett concedes, however, that the ETS was “not perfect”, and is now being reviewed. In fact the ETS has been a fiasco. What’s more, it continues to cast its dirty shadow. 

The Government has banned the purchase of  foreign credits, but it could still use the bad credits to meet its climate change targets up to 2020.

It must not do so. Instead, it needs to revamp the whole scheme, starting by ending the subsidies it gives to polluters such as the oil industry. The “one for two” scheme introduced in 2009 allows businesses to pay only half the cost of their greenhouse gas emissions.

It also needs to reverse its decision to keep agriculture, which produces half the country’s emissions, out of the ETS. National argues that making farming pay for its pollution would be unfair because there is no workable way yet of reducing animal emissions and our export industry should not be penalised. 

Farmers, however, are not exempt from the country’s global environmental duties, and will also respond to economic signals – even if this is a pledge to bring agriculture into the scheme within, say, five years

Jack Tame’s superb interview on 24 April merely confirms pathetic National’s track record on this issue and it now appears that  Minister Bennett will simply follow in the footsteps of her do-nothing-predecessors, Ministers Smith, Groser, et al.

Bennett certainly has no intention of adopting any of the bold, radical – but much-needed – policies as advocated by Professor Jim Skea, co-chairperson of the IPCC Working Group III, and interviewed by Radio NZ’s Kathryn Ryan on 27 April;

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How do we wean ourselves off fossil fuel - Radio NZ - Kathryn Ryan - Prof Jim Skea - IPCC

(alt. link)

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Listen to the two interviews and judge for yourself which person is seriously committed to combating climate change – and which person is a politician who has plenty of empty platitudes to offer, but little else.

In her previous role as Social Welfare Minister, Paula Bennett had much to say about welfare-fraud.

Her empty words on  addressing climate change is a fraud on a much grander, and ultimately vastly more destructive,  scale.

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Postscript1: Memo to TVNZ

Jame Tame’s interview with Minister Bennett reveals a young man with considerable journalistic skills. He should be given every opportunity to make full use of his under-utilised talents.

TVNZ (and TV3) should maximise the talents of their journalistic and production staff by shifting Q+A and The Nation to prime time viewing slots during the early evening.

Why hide excellence early on weekend mornings, where it is not easily appreciated and valued by the general public?

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Postscript2: Memo to Paula Bennett

Ms Bennett, your performance on 24 April was a dismal failure. You are either unwilling to seriously confront the challenges of climate change or, apparently, you are in way over your head on this issue.

Either way, you should resign your Climate Change portfolio. This job is too important to be left to your glib inanities.

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References

TVNZ: Q+A – Climate Change Paris Agreement signed

NZ Herald: NZ’s greenhouse gas emissions soar

Fairfax media: Beneficiary contraception plan ‘intrusive’

Scoop media: John Key Speech – Climate Change Target

NZ Herald: ETS changes ‘unlikely’ despite pleas

NBR: ETS may exclude agriculture – Climate Change Minister

Interest.co.nz: National would phase in ETS obligations for transport, electricity, industrial sectors; Will review Agriculture in 2014

Beehive.co.nz: Government announces ETS amendments

Parliament: Climate Change Response (Emissions Trading and Other Matters) Amendment Bill 2012

Dominion Post: Editorial – Big changes are needed in the Government’s climate change plan

Radio NZ: How do we wean ourselves off fossil fuel ? (alt. link) (audio)

Previous related blogposts

Johnny’s Report Card – National Standards Assessment y/e 2012 – environment

John Key – more pledges, more broken promises?

As predicted: National abandons climate-change responsibilities

National ditches environmental policies

ETS – National continues to fart around

Dear Leader – fibbing again?!

National – what else can possibly go wrong?!

National’s moving goalposts on climate change targets

“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga

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398892_377203895674181_229780468_n

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This blogpost was first published on The Daily Blog on 28 April 2016.

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