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Ministers grilled during rowdy session

NZ NewswireNZ Newswire 12/04/2016 By Peter Wilson and Sarah Robson
Prime Minister John Key © Getty Images Prime Minister John Key

During a rowdy session in parliament ministers have defended the appointment of tax expert John Shewan to review the rules around foreign trusts.

Labour, the Green Party and NZ First used question time on Tuesday to demand a wider inquiry.

They peppered Prime Minister John Key and Finance Minister Bill English with questions about the scope of the review, why the public won't have any input and why Mr Shewan was chosen.

NZ First leader Winston Peters asked Mr Key: "Can he confirm that Mr Shewan was a longstanding partner and chairman of PricewaterhouseCoopers New Zealand, the same accounting firm that was directly implicated in the 2014 Luxembourg leaks scandal?"

Mr Key said he didn't know what Mr Peters was talking about.

© Getty

"The member can come into the House and abuse and bag Mr Shewan if he wants, but Mr Shewan has a glittering career," Mr Key told Mr Peters.

Mr Peters then asked: "Is this highly independent John Shewan the same John Shewan (who was) at National's caucus party, held at Premier House, hosted by the prime minister?"

Mr Key said Mr Shewan probably was at the party.

"So were the parliamentary press gallery and many other people - they love coming to a National Party function."

Labour leader Andrew Little wanted to know why the "tax dodging review" was limited to foreign trusts and doesn't include tax paid by multinationals.

"I think the review undertaken by John Shewan will be quite comprehensive when it comes to disclosure and the issues around tax," Mr Key replied.

"Where that will ultimately go is a matter of us working with the OECD, and our officials are going to Paris on Wednesday to be part of a global meeting on that."

Green Party co-leader James Shaw asked Mr English how he was going to ensure transparency when the public would be excluded from the review.

"Should legislative change be required public submissions will be invited in the usual way through the select committee process," Mr English said.

Earlier on Tuesday Mr Shewan said there was enough scope in the review's terms of reference to ensure that if there was a problem with New Zealand's foreign trust rules, recommendations could be made for the government to act on.

The independent review of foreign trust rules is a response to the global uproar over the Panama Papers - 11.5 million documents leaked from secretive law firm Mossack Fonseca which specialises in setting up foreign trusts for its wealthy clients.

New Zealand has more than 11,000 of them and is reported to be mentioned 60,000 times in the documents.

There are many legitimate reasons for wealthy people to set up foreign trusts, but they're also used for tax avoidance and money laundering.

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