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Labour wants inquiry into lobbying

NZ NewswireNZ Newswire 28/04/2016
John Key © Getty Images John Key

John Key says when his personal lawyer asked him about IRD's attitude to foreign trusts he referred him to the revenue minister, but Labour wants an inquiry.

It was revealed on Thursday that the prime minister's lawyer, Ken Whitney, dropped Mr Key's name when he lobbied against tightening the rules around foreign trusts in 2014.

Mr Whitney runs a specialist trust company, Antipodes, and after talking to Mr Key he emailed then Revenue Minister Todd McClay expressing concern about what appeared to be a change of attitude by tax department.

"I have spoken to the prime minister about this and he advised me the government has no current plans to change the status of the foreign trust regime applying in New Zealand," he said in his email.

The Greens disclosed the email, and co-leader James Shaw says that within a day of Mr McClay receiving it the minister warned IRD not to close down the foreign trust industry.

Mr Shaw says it seems the lobbying was successful in stopping a change in the regulations around foreign trusts.

no caption: <p>Green Party co-leader James Shaw</p> © RNZ / Alexander Robertson

Green Party co-leader James Shaw

Mr Key says there was nothing unusual about his conversation with his lawyer.

"This happens all the time, people ask me about particular issues," he told the New Zealand Herald.

"I don't live in a vacuum. I do what is absolutely the correct thing to do, which is send them off to the minister."

Mr McClay says the assertion that he was influenced by Mr Whitney's relationship to the prime minister is insulting.

He says IRD thought about reviewing foreign trust rules but didn't have the capacity to carry it out.

Labour's Grant Robertson says an independent inquiry, headed by a judge, must take place.

Grant Robertson was the favourite to win the Labour leadership. © Getty Images Grant Robertson was the favourite to win the Labour leadership.

He says Mr Whitney gained privileged access to a minister on behalf of an industry that officials had identified as a cause of concern.

"The review that officials had wanted to conduct was the right thing to do," he said.

"Now the need for an independent inquiry is even more urgent."

The government earlier this month appointed tax expert John Shewan to review the laws covering foreign trusts.

That was in the aftermath of the Panama Papers scandal, which revealed details of thousands of foreign trusts around the world.

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