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Labour open to ditching foreign trusts

NZ NewswireNZ Newswire 8/05/2016

Labour would look at canning foreign trusts in New Zealand in the wake of the Panama Paper leaks, leader Andrew Little says.

"I don't see any value for New Zealand, and the only argument that's been put up so far is they generate $24 million in fees for lawyers and accountants," he told TVNZ's Q+A on Sunday.

"If we want to talk about economic development, there's other things we should be doing ... I see no value in them; I'd be getting rid of them."

Leaks from the Panama-based law firm Mossack Fonseca, dubbed the "Panama Papers," have embarrassed several world leaders and shone a spotlight on the shadowy world of offshore companies and how the rich hide their wealth.

New Zealand has around 12,000 foreign trusts registered here and is reportedly mentioned 60,000 times in the Panama Papers.

"I see no value in them," Mr Little said. "I cannot see what the purpose is apart from allowing others, you know, citizens in other countries to avoid their tax responsibilities in their home countries.

"And I'm at the point now where I'm saying, 'Actually, unless I could be convinced otherwise, that we should just get rid of them'."

The person who leaked the 11.5 million documents has gone public over the weekend, and accused New Zealand Prime Minister John Key of being "curiously quiet" over allegations of tax havens in the Cook Islands.

Mr Key says the leaker is either confused or looking at historical data as he has no control over Cook Islands tax.

Mr Little said Mr Key was wrong to claim New Zealand had no responsibility for the Cooks and we did have influence there.

However, a far more worrying feature of the Panama Paper leaks was what they showed about New Zealand harbouring and sheltering tax avoidance activities, he said.

A searchable data base of the Panama Papers is due to be released on Tuesday morning (NZT).

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