Page 1240

Across the Ditch: Housing Bubble Sees People Living Rough + Planet Key May Play Again

In this week’s Across the Ditch bulletin Australian radio FiveAA.com.au’s Josh Sampson and EveningReport.nz’s Selwyn Manning discuss how the soaring costs of housing in New Zealand has driven prices beyond the reach of most Kiwis, and rents well beyond what is affordable for thousands of people. PLUS: The song that was released a month before the 2014 New Zealand election, and then immediately banned by the Electoral Commission, has had its creators back in court, this time the Government’s Electoral Commission has sought to justify it banning the song in the 2014 General Election – this after the High Court decided the song did not fall foul of New Zealand’s electoral law. ITEM ONE: The soaring costs of housing in New Zealand has driven prices beyond the reach of most Kiwis and rents well beyond what is affordable for thousands of people. The problem is at its worst in the cities, particularly Auckland where the average home sale price is almost $1million. The demand for rental accommodation has seen landlords renting out tin garages for around $400 per week, and a 28 square metre chicken-coop apartment will cost you $330.00 per week. Last year, we reported on FiveAA’s breakfast programme that the imbalance in the New Zealand economy, led by a hot property market in Auckland, had worsened and had been in evidence for over a year. We also reported that the Reserve Bank had warned in 2015 that the housing market had ballooned out and posed a significant risk to the entire New Zealand economy. This year, on May 11, the New Zealand Reserve Bank issued another warning, suggesting that if the housing bubble bursts, the impact on the New Zealand economy will be dire: “The Bank remains concerned that a future sharp slowdown could challenge financial stability given the large exposure of the banking system to the Auckland housing market. Further efforts to reduce the imbalance between housing demand and supply in Auckland remain essential.” (ref. http://foreignaffairs.co.nz/2016/05/11/housing-and-dairy-risks-to-financial-stability) Beyond the wider domestic economy, the impact on every day life for thousands of Kiwis is already dire. For weeks now the news has been filled with real life examples of people living beneath the breadline. The state broadcaster, Radio New Zealand, has been leading almost continuously with reports about families living in cars, in tents, in garages, shacks, caravans, sleeping rough. Many of these people are women with children, and many have jobs but simply cannot afford a roof over their heads and have been squeezed out. (ref. http://www.radionz.co.nz/news/national/304179/where-do-homeless-go-when-help-runs-out) Early this week the Prime Minister John Key said people who are sleeping in their cars should contact Work and Income New Zealand – the state social provider that is tasked with assisting families in dire economic circumstances and getting people back into work. But the Minister in charge of Social Housing, Paula Bennett, admitted on Radio New Zealand this week that in Auckland there simply is not enough accommodation available to house those who have nowhere to sleep. She did say her department would be able to put people into motels as a short term fix. However, this week it was revealed, every person placed into a motel by WINZ is then charged at the market motel rate per night. The people who cannot afford rent, are placed into this form of the government’s temporary accommodation find themselves thousands of dollars in debt to the Government. Debt the Government charges interest on. (ref. http://www.radionz.co.nz/news/national/304122/homeless-borrow-thousands-for-motels) ITEM TWO: https://youtu.be/p8_B6CqCLb4 Meanwhile, a song that was released a month before the 2014 New Zealand election, and then immediately banned by the Electoral Commission has had its creators back in court. The song is a parody of the Prime Minister’s comments, a vision of his ideal New Zealand. John Key said: “I do not know so much about Planet Key, but my expectations are that it would be a lovely place to live, it would be beautifully governed. Golf courses would be plentiful, people would have plenty of holidays to enjoy their time. And what a wonderful place it would be.” Kiwi musician Darren Watson and video maker Jeremy Jones released their song in the early stages of the 2014 General Election. Immediately, there was an outcry by those passionate who were that John Key should not be the subject of satire during an election campaign. Then the Electoral Commission moved swiftly to ban the song and initiate legal proceedings against Darren Watson and Jeremy Jones. The two creators decided to take the song off the internet rather than risk facing a $40,000.00 fine. Since then, in the High Court, they have defended their right to create and release such a song, even should it be satire, should it focus on the Prime Minister, and even if the song should be released during a political campaign. The Electoral Commission argued before the High Court that it considered, under New Zealand law, that the song was an election advert (even though no politician or party paid for it to be created or released). But the High Court judge ruled that the song was ok, and did not come under New Zealand’s electoral act, and as such, should not have been banned. While the Government’s Electoral Commission is fighting that judgement in the Court of Appeal, it has conceded that it now does not want to hold the two creators of the song to account, but just wants the courts to clarify the law before the 2017 election year begins. The Court of Appeal will now consider the two arguments. In the meantime, Kiwis can enjoy the parody of John Key’s vision for New Zealand.

]]>

TPPA Ministers issue bland statement, serious pressures behind the scenes

Ministers from the 12 countries that negotiated the Trans-Pacific Partnership Agreement (TPPA) have just met in Arequipa, Peru. [caption id="attachment_6181" align="alignleft" width="150"]Professor Jane Kelsey. Professor Jane Kelsey.[/caption]‘The four paragraph ministerial declaration (so far only available in Spanish) is as bland and uninformative as their previous statements, reiterating how great they say the deal is and how eager other countries are to join’, according to University of Auckland law professor Jane Kelsey. ‘What they don’t tell us about their meeting is what really matters’, she said. ‘The fate of the TPPA is captive of US politics. President Obama will have stressed the need to provide assurances to gatekeepers in the US Congress who want stronger protections for new generation biologics medicines, oppose the protection of tobacco control measures from investors’ rights to sue, and to stop governments from requiring that financial data is held inside the country’. ‘This is make or break time for Obama, whose “legacy” deal is in jeopardy if he can’t get the TPPA through Congress during the “lame duck” period between administrations’, Kelsey said. ‘In reality, the timeline under the Fast Track law makes a vote during the lame duck period virtually impossible. Then the supposedly final text will be subject at least to renegotiation on those key points, if not blocked altogether, under a new administration.’ ‘There are high risks of countries agreeing to more concessions now, especially a side letter setting out a strong interpretation of the vague compromise wording on biologics, and facing new demands for more concessions, whichever party wins the presidential race and/or control of the Congress.’ Professor Kelsey called on new trade minister Todd McClay not to sell New Zealand further down the road for a deal that imposes unacceptably high costs for New Zealanders for very little return.]]>

Across the Ditch: Tax Haven Qs See Prime Minister Chucked Out of Parliament

Across the Ditch – Australian radio FiveAA.com.au‘s Peter Godfrey and EveningReport.nz‘s Selwyn Manning deliver their weekly bulletin, Across the Ditch. This week: The Prime Minister John Key was chucked out of Parliament yesterday (Wednesday) after a series of questions probing into what his government is going to do about New Zealand’s foreign trust/tax haven debacle. BACKGROUND: [caption id="attachment_10203" align="alignleft" width="300"]Panama Papers: Mossack Fonseca and the tax haven graphic. Panama Papers: Mossack Fonseca and the tax haven graphic.[/caption]New Zealand was named in the Panama Papers leak as a tax haven alongside 20 other countries, including the Cook Islands, Niue, Samoa, Singapore and Hong Kong. This week, a joint investigation between Television New Zealand, Radio New Zealand and internationally regarded investigative journalist Nicky Hager revealed New Zealand was referenced more than 61,000 times in the latest release of documents – information leaked from the Panamanian company Mossack Fonseca. Mossack Fonseca specialises in foreign trusts and taxation services. In the last two years, the company has actively promoted New Zealand to its clients, particularly those from Latin America, as a place to park their money. Since then, there has been a spike in money flowing into foreign trusts and look through companies set up in New Zealand. When John Key became Prime Minister back in 2008, and on numerous occasions since, he openly spoke about a desire to see New Zealand become the Switzerland of the South Pacific, the Singapore of Australasia – in essence, a place where foreign currencies, wealth, goods, services, transactions, could be traded or transacted freely, with first-world security, and when it came to foreign trusts… with a minimum of public disclosure… and a high degree of confidentiality. PUBLIC OPINION: Since the Panama Papers were released, John Key has found himself on the wrong side of public opinion. Two weeks ago, a UMR poll found 57% of those polled were concerned NZ foreign trusts were being used by people overseas for tax evasion purposes. (ref. Scoop.co.nz) Only 21% thought John Key’s Government was handling the tax haven problem well. 52% believed a full independent enquiry was needed. Women in particular are upset, with 63% of those polled being concerned about New Zealand being used as a tax haven. POLITICAL SENSITIVITY: Since the poll, the news has been all bad for John Key as, initially, he attempted to play down the problem. Last week, Kiwis found out that when Inland Revenue sought to review the laws surrounding foreign trusts in New Zealand, it quickly became a sensitive political issue. John Key’s personal lawyer, who operates a trust for the Prime Minister, quizzed John Key about whether the Government was going to crack down on the secretive industry. John Key said he didn’t think so, and told him to ‘go talk to Todd McLay’ (the then revenue minister). Then, the Prime Minister’s lawyer and a host of other accountants and lawyers who specialise in foreign trusts got a meeting the very next day and in an email the lawyer told McLay that the Prime Minister John Key had told him he didn’t want changes made to foreign trusts compliances. A short time after the meeting, the Revenue Minister told Inland Revenue not to pursue a review of foreign trusts. Then in April, while under pressure to act, the Prime Minister agreed to a review of how Inland Revenue Department handles foreign trusts, and whether New Zealand complies with the OECD guidelines on foreign trusts. However, the Prime Minister has refused to initiate an independent inquiry into the matter, something that would essentially reveal whether the perception is justified… that New Zealand has become a tax haven. HOW IT WORKS: According to information sourced from the Panama Papers, the word around Mexico, Columbia and latin America in general, is that New Zealand is seen as a ‘respectable’ jurisdiction, a perfect place to park your wealth, hide it from the wife or your colleagues. New Zealand has become a prized place that ultimately provides enough secrecy as to be an attractive jurisdiction where money obtained from dodgy and/or criminal deals can be laundered. And if you are looking to avoid paying your proper share of tax, then New Zealand’s trust set up is literally gold. Since John Key’s National-led Government was elected in 2008, it has brought in a law where foreign trusts in New Zealand are taxed at zero percent, as long as the money held within the trust was not earned in New Zealand. Once here, the wealth can then be declared to the country of origin that the money has been taxed in New Zealand. The administrators then get a tax waiver from the country of origin, and the money can then be cabled back home. This zero-tax loophole permits the owner of the wealth to avoid paying any tax. Additional to this zero tax loophole, unless the entities or principles whose wealth is held within a New Zealand foreign trust live in Australia or New Zealand, a high degree of secrecy can be applied, in essence people and entities of good or dodgy character, can stash their loot in a secret, safe, and fairly respectable place right here in New Zealand… And, the question is, does the Prime Minister think that is ok? WHERE TO FROM HERE: By the weekend, the Prime Minister began to insist, that no New Zealander has avoided paying tax. But that comment diverts attention away from the real problem, that the system John Key’s Government has in part created:

* allows people and companies from other countries to avoid paying millions, potentially billions, of dollars in tax

* and due to the degree of secrecy that the law provides to foreign trusts, John Key’s Government has built a system that is attractive to those who have accrued wealth through corrupt practice, drug dealing, arms trading, and possibly terrorist activity (revelations justifying this comment are now emerging through questions under privilege in Parliament).

And all this brings me back to the opening line in this bulletin. This week (Wednesday) the Prime Minister was chucked out of Parliament by the Speaker after he continued to shout down the opposition, continued over the top of the Speaker as he stood there attempting to bring the Prime Minister’s exchange and Parliament back into order. The Finance Minister Bill English was left to limp on answering on the Prime Minister’s behalf. What’s clear this week is, Kiwis do not like their country being used as a ticket clicker for dodgy deals and tax avoiders. And, for some, the Prime Minister is seen as part of the problem rather than the initiator of a solution.

Across the Ditch was recorded live on 12/05/16 and broadcast live on Australia’s FiveAA.com.au and webcast on New Zealand’s EveningReport.nzLiveNews.co.nz and ForeignAffairs.co.nz.

]]>

West Papua: The crackdown aftermath – finding a dignified solution

Report by David Robie. This article was first published on Café Pacific

The arrests of more than 1600 protesters in West Papua earlier this week are part of a broader systematic oppression of Papuans by the Indonesian government. Pictured are many detained protesters in the Mobile Brigade compound at Kotaraja, Jayapura.  Photo: Tabloid Jubi OPINION: By Rev Benny Giay   LAST MONDAY, Indonesian police arrested more than 1600 people in Jayapura, Papua. They were

]]>