Paradise lost

Written By: - Date published: 8:04 am, November 7th, 2017 - 19 comments
Categories: Economy, labour, tax - Tags: , ,

Another mass leak of a law firm’s private information has occurred.  And just like the Panama Papers the details are eye watering and show there are two classes of people on this planet, the uber rich and the rest of us.

From the Guardian:

The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.

The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.

The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times.

The project has been called the Paradise Papers. It reveals:

The video of Panorama trying to interview Lord Ashcroft would be very funny if the whole situation was not so sad.  Why do the really wealthy refuse to contribute to the collective good?  After all they have more than enough to spare.

Lord Ashcroft will be well known to Standard readers. He seemed to have a rather cosy relationship with John Key. In this most networked of worlds it is not surprising that people who want to trash the state in the United Kingdom so they and their friends can have even more wealth are friendly with and supportive of people who want to trash the state in New Zealand so they and their friends can have even more wealth.

He was a peer of the House of Lords but was a foreigner in terms of his tax status.  This meant that he only paid tax on UK earnings.  How patriotic.

Another controversial entity mentioned in the Papers is Serco.  But it appears that even law firms setting up structures to rob Sovereign Nations of tax have standards.  Again from the Guardian:

Serco first approached Appleby through a London law firm on 1 September 2015, asking for help to “establish a subsidiary in Mauritius to acquire 49% of a company in Abu Dhabi”.

It would later use the Mauritius company solely to facilitate part of a major sale of its business interests in the Middle East and India.

Serco has flatly denied that the structure was used to help it avoid tax, and the Guardian is not suggesting the company acted unlawfully in any way.

The request prompted a flurry of activity within the Appleby compliance arm. The team began running its standard checks on the risks Serco could pose as a client.

The results were less than convincing. Appleby’s compliance team found what they described as a “history of blunders and controversies surrounding many of its contracts”, including through its involvement in Obamacare and the running of prisons in Australia and New Zealand.

“It has a history of problems, failures, fatal errors and overcharging,” a senior Appleby compliance officer wrote.

And Bernie Sanders has warned that the world is rapidly becoming an international oligarchy which is controlled by a tiny number of billionaires.

I suspect that the shock and horror from this release will be more subdued from that caused by the Panama Papers.  Not because the sense of disgust was overplayed last time, but because this is become an increasingly apparent reality.

So what should progressives do?  We are up against some of the cleverest and most well resourced people on the planet.  But if we want sovereign nations to have a future then we have to sort this out.

And what is important?  Brave policies enacted by a progressive Government.

Tax reform is complex and the wealthy will throw everything they have at it in the hope of stopping or watering it down.  But the proposed tax review this Government will be setting up has just become even more important.

19 comments on “Paradise lost”

  1. Carolyn_nth 1

    I think the NZ connections haven’t yet been discovered, and I believe some NZ journos are working on it – according to a Stuff editorial.

    Many of the documents are from the Asiaciti Trust Group, based in Samoa, but which has an office in Auckland.

    Asiaciti also made submissions to the government in 2014, to not tighten NZ regulations on overseas trusts, as some of us discussed yesterday on Open Mike

    PS: I have seen a screenshot on twitter of a document claiming Malcolm Turnbull (Oz PM) gets a mention in the Paradise Papers, but I can’t find a link to any article on it.

  2. RedLogix 2

    Imagine NZ had no nation scale government. Just the local councils we’re familiar with. On a day to day basis local govt provides the vast majority of ordinary services that make life civilised, rubbish, roads, water, libraries, parks, building regulations, parking, animal and pest control … on and on. For ordinary people, whose lives are located in one place at a time, this scale of governance suffices for most of our needs.

    But now, absent any governance on a national scale, how would all these small councils handle entities on a scale beyond their jurisdiction? Leaving aside obvious technical problems like providing national highways and transport, communications and the like … consider the problem of handling large companies that operate across multiple council districts. Consider individuals who make themselves resident in one town for tax purposes, but locate their assets in another which imposes little or no tax. Consider a company that rips off a client in Auckland, but is immune to redress because their offices are in Hamilton. Imagine how to deal with one town that pollutes for profit, and it’s neighbours who absorb the costs. And so on.

    Such a scenario strikes us as absurd; dealing with these issues is exactly why we have a nation state.

    But wait. If the entire human population of NZ was indeed just say, two small towns, imagine maybe Kaikohe and Gore. They were separated by days of travel, barely communicated and the few traders who operated between then did so on a basis of personal trust alone. Would we then need all the apparatus of a nation state? Well no, we would think it an absurd imposition, all of the citizens of Gore and Kaikohe would resist such a notion as a dangerous imposition on their identity and autonomy.

    But in the past 180 years or so the nation states of the planet have moved from comparative isolation and autonomy, to complete connectivity and dependence on each other. And when you look at the enormous progress in building the technical, commercial and legal infrastructures that support this massive global connectivity, an astounding amount of progress has been made. Especially since the end of WW2.

    But politically we remain stuck in nation state thinking; for the most part we regard the idea of global governance with the same suspicion as might the people of Gore and Kaikohe in the example above. In reality we are a now a single global society, but politically we cannot let go the delusions the nation state is the highest form and end point of our social evolution.

    And because we baulk at this last hurdle, the establishment of effective, democratically accountable global governance, we struggle to address virtually all the big problems we face.

    Somewhere I read a while back that just the cash hoarded in Caribbean tax havens alone, not including other assets, was enough to pay the debts of all the nation states on earth. Legal only because they lie beyond the reach of the nations, but are of course pure parasitical piracy on the high seas of global finance.

    • mickysavage 2.1

      Good comment.

      Sums it up well.

      The forces of globalism have leapt at the chance to dominate the new world order. And they are busy trying to prevent sovereign nations from uniting and exerting power. Think Brexit and the scorn thrown by the right at the United Nations.

      • RedLogix 2.1.1

        Exactly mickey. Just the confusion heaped on the word ‘globalist’ is enough to make me despair.

      • Sabine 2.1.2

        but at least these guys won’t need campaign contributions from big business and are thus not ‘owned and beholden’ to anyone. Right? right?

    • Consider a company that rips off a client in Auckland, but is immune to redress because their offices are in Hamilton. Imagine how to deal with one town that pollutes for profit, and it’s neighbours who absorb the costs. And so on.
      And we’re still having serious problems with that type of shit.

      And because we baulk at this last hurdle, the establishment of effective, democratically accountable global governance, we struggle to address virtually all the big problems we face.

      Take China’s territorial grab in the South China Sea for example. International law, that they’ve agreed to by belonging to the UN, makes such actions illegal. It was recognised that if anyone could go off and make an artificial island and claim it as territory it was going to have major impacts politically.

      When China’s actions was found illegal by the appropriate court China simply ignored it and the only way to stop them would be an all out war.

      This is where global governance will always have a problem. Stopping individuals committing crime is fairly easy for a community. It’s pretty much impossible for a group of nations to stop even a small one from doing what it likes because the only option available is war. Consider what would be needed to stop the US from doing whatever it likes.

      Perhaps a global government will arise but I don’t see it happening for a thousand years or more and after capitalism has finally been removed. Until then we’re going to act as nation states that encourage better global behaviour from all countries. Unfortunately, the way many of the global institutions are set up (the IMF, World Bank, WTO, etcetera) actually does the exact opposite to what’s needed as they encourage capitalism and competition.

      • RedLogix 2.2.1

        but I don’t see it happening for a thousand years or more and after capitalism has finally been removed.

        Perhaps the other way around. I see it happening within my lifetime. Already most of the pre-conditions and building blocks are in place. Once established it would quickly suppress the robber-baron form of capitalist piracy that you so rightly object to.

        In the end I believe it will happen, not so much because people of goodwill thought it a good idea … but from fear of the consequences of NOT doing so.

        • One Two 2.2.1.1

          Once established it would quickly suppress the robber-baron form of capitalist piracy that you so rightly object to

          Hello RL..

          What might replace the ‘robbery’?

          Those building blocks you refer to, look to be larger scale ‘robbery’ foundations…

          • RedLogix 2.2.1.1.1

            DtB and I have had many conversations about this one way or another. It’s my sense that markets will remain an enduring aspect of human life. But how those markets are organised, and what purposes they serve very much depends on the values and intentions of those of participate.

            I don’t have a neat, encapsulated answer for your question; but we know that the motives of greed, social status, and overt power are not the universal human experience. If you look there are many examples of people whose life has bent to other gentler, loftier goals … so we know people are capable of this.

            The trick is not so much the ‘good individual’, but the ‘good society’.

            • One Two 2.2.1.1.1.1

              Thank You, RL.

              Essentially a case of ‘good versus evil’…

              Hope must always be retained in the heart, IMO

              Sincere and genuine, hope

  3. patricia bremner 3

    John Key’s lawyer definitely got a mention.

    • Penny Bright 3.1

      Why was there no MSM coverage of the FACT that on 1 August 2017, at Rutherford House Victoria University, the (then) Chair of Transparency International, Jose Ugaz, stated that John Key should be investigated over the Panama Papers?

      I was present at that meeting, as were about 200 others.

      Why the silence, here in New Zealand, ‘perceived’ to be ‘the least corrupt country in the world’?

      Because investigating John Key over the Panama Papers would rip the scab off a 44 gallon drum of political ‘pus’, and help expose the NZ corruption REALITY?

      I think so.

      Penny Bright

      ‘Anti-corruption whistle-blower’.

  4. Why do the really wealthy refuse to contribute to the collective good?

    They got all that wealth by stealing. Sure, it was legal but it was still theft. You don’t think that they’re going to start paying their fair share now do you?

    The rich never pay for anything whereas the poor pay for everything including for the rich to be rich.

    Paradise Papers: Apple’s secret tax bolthole revealed

    Apple said the new structure had not lowered its taxes.

    It said it remained the world’s largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes “did not reduce our tax payments in any country”.

    The point that Apple seems to be missing is that they didn’t increase the way that they should have.

  5. Darth smith 6

    At least there is no nact to act as a road block this time

  6. Darth smith 7

    It’s scandalous I will interesting to read the nz connection

  7. eco Maori/kiwi 9

    There you go John Keys only goal in OUR political system is to line his and his m8 pockets and this is the mentality of the national party . He still has the power in OUR country to manipulate thing so he can carry on lining his pockets.
    He is directly responsible for my situation giving the power to the authority’s to do what they want with no checks and balance’s so he could control everything. I felt a chill down my spine when I first seen him on TV. But I was to busy working my ass off thinking everyone would reward me for my hard work{ yea right} you are just a Maori is what my reward was 2 of the 3 company’s that shafted my whano and I come from bullshit land . Winston I’M next 1 he started mass migration 2 he attacked Maori mana by keeping our leaders out of the media 3 his 90 day employment clause there is much more for one to win in his system someone else has to lose .This does not have to be the way OUR Society works Kia kaha .

  8. Angel Fish 10

    Don’t talk about it in soft terms like, why won’t they contribute to the common good,
    speak of it as a fee that one must pay in order to live in respective nation.
    And really that’s what it is.
    It’s absurd to think that you get to live in a country for free.
    Also put pressure on consumers.
    Consumers aren’t helpless little children, they should have the integrity
    to punish companies like Apple by boycotting their products, until
    they remedy their fraudulent behaviour.

    Blame is to be shared in this case.

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