Pretty Unlikely because Turkey and Israel are politcal Allies – the borders are open between the two countries. When I was in Turkey I was interested to visit a city which displayed the Israeli flag and had a sister city in Israel.

Is John Key the ‘do nothing’ Prime Minister?

* Yes. Rodney Hide is right. Key needs to get on with reforming the economy and forget about remaining popular forever. (68%, 151 Votes)
* No. He’s done as much as he should have. You’re all a bunch of nervous nellies. Everything is fine (17%, 37 Votes)
* No. He’s rightly waiting for his experts to advise him on the right way to do it. (15%, 35 Votes)

Total Voters: 223

A COMPLEX and highly secretive $US125 million ($137m) deal by National Australia Bank, codenamed Project Turtle, is one of a series of transactions by local banks at the centre of a crackdown by the Australian Taxation Office.

Details of the deal, obtained by The Weekend Australian, shed light on “asymmetric swap” schemes with offshore financial institutions as possible vehicles for large-scale tax avoidance.

The ATO’s action, which has split the banking and tax communities, again puts the tax practices of NAB, Commonwealth Bank and ANZ Bank under the microscope.

It comes as the Big Four banks, including Westpac, face a hefty

$2 billion tax bill in New Zealand from soured structured finance transactions.

ANZ and CBA refused to comment yesterday on their exposure to asymmetric swaps, but NAB said its transaction was entered into as part of its fee-generating wholesale banking business, and met all relevant internal approval processes.

“NAB will of course co-operate fully with the ATO in its industry-wide review of these transactions,” a spokesman said.

The deals targeted by the ATO, which could involve revenue leakage in the hundreds of millions of dollars, feature a local bank and an offshore financial institution.

The offshore entity typically deals in equities, currencies and commodities and is keen to hedge its trading portfolio.

The local bank agrees to swap transactions, involving its domestic banking operation and its offshore banking unit (OBU), which is concessionally taxed at 10 per cent. Through an arbitrage of the lower OBU tax rate and the 30 per cent rate for the domestic banking unit, the local bank always makes an after-tax profit, after collecting a taxable flow of fees for entering into the swaps.

In Project Turtle, NAB agreed to a long swap transaction with a global investment bank over an equity index involving a notional principal of $US125m.

If the index rose, the investment bank would pay NAB a certain amount, and the reverse would occur if the index fell.

NAB, through its OBU, also agreed to a short swap over the same index for a notional principal of $US97.2m — lower to allow for the concessional tax rate. The period of the swaps was for one year. NAB was to get a fee of $US8m.

In mid-2008, the parties signed off after NAB obtained a favourable private ruling from the ATO.

Soon after, the benchmark index for the deal slumped due to the financial crisis. The parties agreed in April to an early termination, with NAB taking a $US97m loss on the long swap and a $US75.6m profit on the short swap.

After collecting a $US7m fee, the bank lost $US14m on a pre-tax basis, but scored a $US5m after-tax profit. Despite issuing seven favourable private rulings, including one for Westpac that the bank ultimately did not use, the ATO released a draft determination last month saying its preliminary view was that the Part IVA general anti-avoidance provision applied to asymmetric swaps.

By itself, the fact that the domestic bank always makes a profit is not considered sufficient to invoke Part IVA.

The ATO’s draft determination therefore split the tax and banking industries.

“Asymmetric swaps are a much better thing than betting on the Melbourne Cup — the bank makes money if equities go up, and it makes money if equities go down,” a banking industry source said.

“My guess is that the ATO will soon be issuing assessments to the banks, because, in tax, when you think it looks too good you know it probably is.”

A tax expert, who condemned the ATO’s u-turn after its private rulings, said he was still uncomfortable about the major banks benefiting from a domestic tax arbitrage.

“The indexes could have gone the other way and the ATO would have made a windfall,” he said.

“Still, it’s not a good look for the banks to engage in domestic tax arbitrage, when the OBU system was set up to make them more globally competitive.”

Greg Pratt, a partner in Ernst & Young’s financial services tax group, said asymmetric swaps had a big impact on the pre-tax profit line, so the “tax tail should not wag the commercial dog.”

“But for Part IVA to apply, an objective person has to conclude that the dominant purpose is tax avoidance, and it’s hard to see how a draft determination without regard to any particular facts or taxpayers will apply,” he said.

Corporate Tax Association executive director Frank Drenth noted that the draft determination still had to be fully implemented.

But he argued it would be “concerning” for the ATO to issue favourable rulings to the banks, and then invoke Part IVA after seeing how the transactions turned out.

The profits, he said, had ended up in the OBU, taxed at 10 per cent, while the losses went into the entity taxed at the full rate.

“I bet if it had been the other way around, then we wouldn’t be looking at undoing the private rulings,” Mr Drenth said.

In the meantime, David Butler, who as NZ tax commissioner ran the structured finance cases against the Big Four, rejoined the ATO in September last year. He doesn’t have direct responsibility for the asymmetric swaps fracas.

KEVIN RUDD has launched a blistering attack on climate change sceptics and deniers in Australia and abroad, accusing them of a systematic campaign to sabotage global talks in Copenhagen and of being contemptuous towards the interests of the world’s children.

http://www.smh.com.au/environment/climate-war-gets-personal-for-rudd-20091106-i24u.html

LOL at this part jabba

That was my email to infoline@hrc.co.nz

come on Philu .. get a grip, you might be happy to be called a white motherfucker but I’m not. I loved my mum but not that much.

Steve 5:39 .. yep, Sat nights are bbq nights .. scotch fillet with asparagus, glazed onions, broccoli/bacon and tai kumara from the supermarket and yes, washed down with a couple bottles of red (not lion red)) burp/hic

Philu, after the last few months on this blog, you will have realised that most people in this thread are relatively apolitical in the sense of following a party, there are very few out and out cheerleaders on KB, most just want the govt out of our lives and pockets, thus many (including myself) feel as disgusted by Hide’s troughing as anyone else’s.

So stop dodging the question, and tell us why “white motherfuckers” is not racist.

Hone is not entitled to make it a racist issue

i work every day..

it is a news-aggregating website called whoar.co.nz..

(didn’tyaknow..?..)

phil(whoar.co.nz)