What did the PM tell his lawyer about foreign trusts?

The Government stopped the IRD from reviewing New Zealand foreign trusts shortly after the Prime Minister’s lawyer wrote to the Revenue Minister claiming John Key had promised him the regime would not be changed.

Correspondence obtained by the Green Party shows that the Prime Minister’s lawyer Ken Whitney initiated a lobbying campaign that started with the Prime Minister and appears to have successfully stopped the IRD from reforming the foreign trust regulations in 2015.

“This shows how powerful vested interests can get the ear of the Government who will then change its plans to suit them,” Green Party Co-leader James Shaw said.

“I want the Prime Minister to tell New Zealand whether he gave Mr Whitney an assurance that the foreign trusts industry would not be reformed and if so, why he hasn’t been upfront about the assurances he gave.

“Ordinary people, those who care about child poverty or about the environment and want the Government to change its policies, do not get this kind of access or this kind of immediate response to their concerns.”

Within 24 hours of Mr Whitney writing to then Revenue Minister Todd McClay claiming to have got an assurance from the Prime Minister, Mr McClay had emailed the IRD warning that he didn’t want it to close the foreign trusts industry.

Five months later, despite IRD expressing serious concerns about risks to New Zealand’s reputation as a perceived tax haven, its review of foreign trusts was over.

“Today’s revelations point to the need for the new John Sherwin investigation into foreign trusts to be broadened to include a panel of experts, and with the opportunity for the public to have a say.

“Ultimately, this is about the integrity of our political system. New Zealanders need to be able to trust that our political system works for them, as well as those with power and influence,” Mr Shaw said.

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