Monthly Archives: Jun 2016

Foreign trusts could damage New Zealand’s reputation

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For months now we have been hearing about the Panama papers that were leaked from the offices of a legal firm. In them New Zealand was mentioned thousands of times. Not surprisingly the Opposition in Parliament were quick to jump on the Government and rightfully so, trying to make the case that New Zealand is a tax haven.

Against a backdrop of growing inequality, with public sentiment moving against tax evasion, the Government is trying to give the impression there is no problem. Prime Minister John Key insisted that there would not be any reform of tax evasion laws and may use the review of the report into allegations of New Zealand being sympathetic to tax evasion to  advance  his case. That report written by former PriceWaterhouseCooper Chairman John Shewan found no serious evidence of New Zealand being a tax haven, though he said that the disclosure laws are not good enough.

However it also found that the term “Tax Haven” is viewed as obsolete by the Organization for Economic Co-operation and Development. And Mr Shewan pointed to the significant debate about whether New Zealand should be labelled one as a useful illustration of the reasons for the O.E.C.D. view of the term. Mr Shewan’s report made numerous recommendations, the major ones being:

  • Establishing a register of foreign trusts searchable by regulatory agencies
  • Trust beneficiaries be declared

Although the Government appears to come out relatively unscathed on the foreign trusts issue so far, it needs to implement all of the recommendations before the 2017 election to have true credibility. It needs to aggressively pursue money laundering and offer to help South Pacific nations whose legal systems are not so robust with resourcing. As I have mentioned in previous posts the penalties for money laundering are nowhere near high enough, not only in terms of severity but also in terms of preventing individuals carrying out further such acts in the future. Whistle blowers who notify the authorities of illegal happenings also need to be granted protection – this is a separate issue in that whistle blowers are covered by separate legislation, but relevant because not being protected increases the risk of abuse.

 

The growing list of inept Labour Party leaders

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Seven and a half years have now passed since Labour left office in 2008. After a period of economic prosperity, the likes of which New Zealand had not seen, dark days ahead with the Global Financial Crisis, big earthquakes and – in the last few days – a Brexit were ahead. Mr Little has turned out to be as weak and spineless as his three Labour Party predecessors.

In fairness to the first one, Phil Goff, he was leading Labour after nine years on the Government benches. Mr Goff had a party that was looking to find its feet in the post-Helen Clark age and had to find his own feet as Leader of the Opposition. It was never going to be easy and few seriously expected with the sky high popularity of Prime Minister John Key that a Phil Goff-led Labour would spend just three years on the Opposition benches. Although Mr Goff might have expected a bit of lift in Canterbury where National’s attitude to post-earthquake housing in Christchurch and the sacking of the Environment Canterbury Regional Council was frustrating people, it would not have been enough to win the 2011 election. That was a resounding National Party victory.

More was expected of his replacement David Shearer, who unfortunately effectively went A.W.O.L. as Leader of the Opposition. His failure to unite Labour by the mid-way stage of Labours second term on the Opposition benches, and equally notable failure to score any big hits on the National-led Government soon had Labour Members of Parliament sharpening their knives. A failure to come up with any comprehensive policy about anything at all and the need to retire some of the older Members of Parliament to make way for newer members, which still to some extent has not been done, left Labour stuck in first gear. Grant Robinson, David Cunliffe and Nanaia Mahuta were all thought to be potential leaders should a back room coup take place.

Mr Shearer resigned in September 2013, giving his replacement who turned out to be David Cunliffe 12 months to haul Labour back from the brink of catastrophe. Despite the first signs of major crises looming on the horizon for the Government, Mr Cunliffe was only able to score modest hits on the Government, the effect of which wore off  after a few weeks. Despite angst growing about a range of issues on which a centre-left party such as Labour would have normally pounced, perhaps terrified of National to the point of being paralyzed, Mr Cunliffe was unable or unwilling to announce anything substantive.

The 2014 election was – to put it mildly – a catastrophe for Labour, and a bad time for the centre-left on the whole. The knives were drawn and sharpened a second time. Only because Labour’s Green Party allies retained all of their seats and New Zealand First picked up three, was National denied an outright majority. Unionist (or at least former unionist)Andrew Little was appointed to lead Labour. For the first few months, he had the good will of the party on his side and the knives twice sharpened were sheathed. He announced a policy of paying for the undergraduate study of tertiary education, signalling a boldness in announcing policy his predecessors had failed to do. The rout in the polls was halted and the party finally found its feet on the Trans Pacific Partnership Agreement – or so we thought.

Now, for a fourth time, I am not so certain Labour has found its feet. The Trans Pacific Partnership Agreement looks like it might have Labour backing after all,  which would signal a massive climb down from the party that was supposed to put the needs of workers and the marginalized first. And if that is the case then a fourth term on the Opposition Benches is beckoning.

Why re-electing Malcolm Turnbull will not help New Zealand

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Yesterday I blogged about the trouble with the Liberal Party of Australia over the last three years under former Prime Minister Tony Abbott and current Prime Minister Malcolm Turnbull. It would be an understatement to say I think that the Liberal Party winning the 2016 Australian election would be a bad thing for New Zealand. The Liberal Party of Australia under Messrs Abbott and Turnbull has caused unprecedented damage to the A.N.Z.A.C. legacy with its attacks on asylum seekers, contempt for international law regarding refugees and support for questionable wars overseas. Let us have at look at how the re-election of the major conservative party in Australian politics would be a bad thing for New Zealand.

The Ministers under their watch, especially but not limited to Minister of Immigration Peter Dutton and Minister for Foreign Affairs Julie Bishop have been responsible for much of the damage, but cameos by both Prime Ministers have not helped either. Whereas New Zealand has progressed steadily with equality for the L.G.B.T.Q. community, Australia has continued to lag behind with both Mr Turnbull and Mr Abbott seeking to derail initiatives to help. Given the large number of New Zealanders living in Australia and vice versa, it would be nice for same sex relationships to have the same rights before a Court of law.

Australia has also deported New Zealanders for committing criminal offences despite some of them having lived in Australia for so long that they have no connection to New Zealand whatsoever. This happens whilst deportations of Australians living in New Zealand who commit criminal offences do not seem to be an occurrence. It is also true that some of the New Zealanders deported have been sent to Nauru detention centre where human rights that are recognized on both sides of the Tasman Sea are regularly broken by private security guards with little understanding or care for international law.

A Labor Government is quite capable of helping New Zealand on the subject of providing New Zealand nationals living in Australia with a path to permanent residency, and – if they wish to go further – citizenship. It was a Liberal Government in 2001 under Prime Minister John Howard, struggling to win an election that introduced changes that made a path to citizenship for New Zealanders all but impossible.

A path to citizenship is not the only thing that would assist New Zealand interests. Over the last 30 years since we left the A.N.Z.U.S. treaty, which I regard as a Cold War relic that needs to be replaced, Australia’s pivot towards the United States has meant that it has devoted less time and resources to assisting South Pacific Island nations. This pivot has tended to be strongest under Liberal-National coalition Governments. This has enabled China to develop significant influence in the region, which has small island nations such as Samoa, Fiji, Tonga but also Papua New Guinea in a dangerous Catch-22 situation. On one hand China’s need for goods and services from the region provide significant growth opportunities, but on the other, China’s callous disregard for human rights, local issues and the environment means that locals could get a raw deal which may lead to conflict.

Any long term decline in the true values and well being of Australia and Australian society at large is not going to be beneficial for New Zealand. When the former is governed by a Government with no more vision or substantial policy than the tired National-led Government in New Zealand after only three years of governance compared to  seven and a half here, and wants to be seen unwinding any progressive policies it can, who will gain? Not Australia.

And subsequently not New Zealand.

 

Liberal Party of Australia damaging “the Lucky Country”

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As the world struggles with the fallout from Brexit, another political decision is looming, which New Zealand is going to find itself having to pay attention to in the next few days. For nearly two months now since Australian Prime Minister Malcolm Turnbull called a double dissolution election to deal with the inability to pass workplace legislation, the Labor Party and its Green allies have been fighting the Liberal National coalition for the votes of Australians. Now with election day looming, will Australia benefit from the re-election of the Liberal Party?

In a word: No.

The last 10 years in Australian politics have seen a period of considerable turmoil in both the Liberal and Labor Party of Australia. The infighting in both parties has been as damaging to Australia as it has to the Liberals and Labor, with an astounding lack of communication about policies and their implementation amongst senior Ministers and Members of Parliament in both camps.

Despite being marred by infighting, Labor to its significant credit managed to get some good things done:

  1. It made an historic apology to Aboriginal people acknowledging the wrongdoings of previous Governments, the existence of the Stolen Generation of Aborigines forcibly plucked from their homes and placed with foster families
  2. It acknowledged that climate change is a problem and passed a carbon tax into law
  3. In 2012 the then Prime Minister Julia Gillard took a stand against misogyny in a speech that was widely reported around the world

 

In 2013, the Australian people voted to get rid of Prime Minister Kevin Rudd who had just reclaimed the leadership from Ms Gillard (who then retired from politics). He was replaced by Liberal Prime Minister Tony Abbott.

In the slightly less than two years that Mr Abbott was Prime Minister, his Government caused widespread embarrassment amongst Australians, perhaps best reflected in the media polls showing plunging support for his Liberal Party. The polls plunged so low that just days before current Prime Minister Malcolm Turnbull toppling him in a backroom coup, the Liberals would have been decimated had an election been held that day. His gaffes are too many to list here, and many were actually caused by slip ups by his Ministers – notably first Minister of Immigration Scott Morrison and his successor Peter Dutton, Minister for Foreign Affairs Julie Bishop, his Attorney General George Brandis and Minister for Environment Greg Hunt. Mr Abbott’s Government appears to have the following priorities and nothing else:

  1. Repeal the carbon tax – this was done within the first hundred days of his tenure, and since then the Abbott Government has steadfastly denied climate change is a problem, going so far as to deliberately open new coal mines despite a significant drop in demand
  2. Stop the boats bringing asylum seekers and refugees – this has been done to the tune of non-stop fear mongering that refugees will come and take Australian jobs; that asylum seekers will make Australia a more dangerous place; that human rights organizations have no right to advocate for refugees
  3. To shirt front nations that try to hold Australia to account – a play on the language Prime Minister Tony Abbott used when confronting Russian President Vladimir Putin over the downing of a Malaysian Airlines flight over Ukraine with a missile probably fired by a Russian anti-aircraft unit
  4. Acquiring the F-35 Joint Strike Fighter at a cost of $24 billion despite the significant cost overruns in the United States and questionable performance of the aircraft

The polls have narrowed somewhat since that one just days before Mr Abbott was dumped. This is a shame because a clean out might be the best thing that has happened to the Liberal Party in decades. And Australia.

A not so surprising Brexit

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When I got home from work on Friday, aside from being tired, I had drawn the conclusion that trying to write a blog article on this would just lead to a muddle of thoughts that would not be altogether coherent, but would probably also not get the right message out. Thus this was deliberately set down for today, and those who read the daily article for Saturday would have been treated to some nice news instead.

I am not altogether surprised that this happened. I have however been surprised by the immediacy of some of the reactions – the resignation of British Prime Minister David Cameron, who has announced he will step down in October and numerous senior E.U. officials in the United Kingdom. I thought that Mr Cameron might have waited until Monday to assemble his Cabinet and discuss the most immediate steps. Perhaps he was bothered by the spectacular plunge of the Pound to a 31 year low and the wiping of hundreds of billions of Pounds from the value of the market.

Nations have always sought to retain their identity and probably always will. The idea of a basic economic union is good in theory, and to a limited extent in reality. By opening borders the freedom of travel throughout the continent and Britain was significantly improved, especially once Cold War restrictions began to be eased and former Soviet Bloc nations were allowed to apply to join. It also enable easier flow of goods from one country to another and passport requirements were waived for those moving between member nations in the E.U.

However when nations start thinking that their people are being forced by politicians in another country that they cannot control to, anti-____________ sentiment is going to start rising. In some parts of major British cities, high levels of youth unemployment especially among immigrants who are becoming disaffected with British society, create ghetto-like environments that have elevated levels of crime and undesirable activity. Relaxed controls on immigration have meant that large numbers of migrants who have not been properly screened, or provided for are able to arrive. This in turn leads to separatist parties beginning to form like United Kingdom Independence Party, but also hard line parties and movements like Britain First and the National Front who openly despise minorities. In some respects this was a necessary correction to stop the more rabid elements gaining a foot hold, or heaven forbid, access to high office.

For New Zealand the only thing we can do is wait and see. Most of my political contacts were absolutely delighted with the result, thinking that it was a great day for British democracy and that by parting ways with the E.U., Britain will get its sovereignty back. However almost to an individual my U.K. contacts and U.K.-based contacts were very much against Britain leaving.

It is too early to tell what kind of repercussions a Britain outside of the E.U. will mean for New Zealand in terms of issues across the board from travel visas, to doing business, to geopolitical relations. The volatility will last for a few weeks whilst markets readjust, and the scale of the losses is assessed. Further high level political resignations may follow as politicians who banked much or all of their careers on staying weigh up whether to stay on. If one is planning to travel like I am next year, perhaps buy up a few hundred Pound whilst the New Zealand dollar is higher against it – it could be awhile before another such spectacular rise happens again.

So now as the dust begins to settle on what probably felt like a magnitude 8.0 earthquake in terms of the political changes wrought, and the aftershock sequence clearly well underway, these are some very interesting – though possibly not for the right reasons – times for the United Kingdom.