Trotter on Labour and the Panama Papers

writes:

’s response to the “Panama Papers” has left me cold.

The Leader of the Opposition, Andrew Little, lacking hard evidence of criminal behaviour – of any kind – has opted to unfurl his party’s banner on the moral high ground.

He has accused the law firms involved in servicing foreign trusts of participating in a “grubby little industry”.

He’s probably right about that. Shielding rich people from their tax obligations hardly constitutes a noble calling.

My problem with this approach is that it all sounds a bit like a student union SGM, where the deployment of high-flown rhetoric is inversely proportional to the debaters’ command of useful facts.

And of course the leader and half the front bench are former student politicians!

The facts arising out of the Panama Papers are reasonably simple to summarise:

  • New Zealand is not a tax haven in the generally accepted definition of that term.
  • Changes to New Zealand legislation have put this country at risk of being perceived as a tax haven.
  • The Panamanian law firm, Mossack Fonseca, took advantage of our legislative laxity to promote New Zealand as a politically stable and corruption-free hiding place for their clients’ assets.
  • The National-led Government’s responses to IRD warnings that New Zealand was at risk of losing its corruption-free reputation were wholly inadequate.
  • The entire problem can be solved easily: simply by toughening-up the disclosure provisions of the relevant legislation.

If Labour had been willing to assess these facts dispassionately, and with an eye to presenting itself as a credible alternative government, its handling of the Panama Papers would have been very different.

From the outset, it would have made it very clear that its number one priority was to protect New Zealand’s international reputation. That being the case, it would have been very careful to avoid calling their country a tax haven.

Their treatment of the Prime Minister would also have been different. Rather than attempting to associate him with the dubious behaviour of Mossack Fonseca, they would have acknowledged that the offending legislation had evolved gradually, under both Labour and National, and offered to make its remediation a bi-partisan effort.

Having sought out and obtained the best advice available from tax lawyers and accountants about how the legislation might best be rewritten to eliminate its usefulness to entities like Mossack Fonseca, Labour would then have approached the Government with an offer to rush through the necessary changes under urgency.

A much more intelligent approach than what they did. Their obsession with Key blinds them. Hopefully they will ignore Chris’ advice.

If all of the above has a faint ring of familiarity to it, that’s because my suggested responses are modelled on the way John Key handled the so-called “Anti-Smacking Bill” back in 2007. Rather than exploiting the mounting toll of damage the issue was inflicting on Helen Clark’s Labour Government, Key arranged for the bill to be passed overwhelmingly with National Party support.

The electorate was startled – but impressed – by Key’s magnanimous gesture towards his political opponent. Here was a man who was prepared to forgo petty partisan advantage for the wider public good. As he strode into the media conference alongside Helen Clark, the television audience saw not a political opportunist, but a future prime minister.

Clark’s right-wing opponents were furious with Key for rescuing her from the anti, anti-smacking backlash. Key just shrugged. He knew that at the perceptual level that truly mattered, he had just made huge gains. In his own, and his party’s, audition for the role of wielder of state power, National was now in front.

Andrew Little preaches a mean sermon, and his finger-wagging is second-to-none. But in that all-important audition for political power, his handling of the Panama Papers has done Labour no favours.

Another own goal.

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