Some very quick thoughts on the matter of the PM's lawyer and his lobbying efforts, written on a Friday afternoon while waiting for a taxi to take me to the airport. So don't expect anything too deep and meaningful!
Revelations that the PM's personal lawyer was active in lobbying the Government not to tighten the rules on the sort of foreign trusts fingered in the "Panama Papers" present, as they say, poor political optics. Here's some quick thoughts.
First off, the mere fact that someone could so easily get in the ear of first the PM and then the relevant Minister isn't that surprising. After all, New Zealand is a pretty small place and access to our politicians is comparatively easy. To take a pretty mundane example, every year I ask Michael Woodhouse to come and talk for an hour to the Public Law class that I teach and he unfailingly makes time to do so. That's good of him, of course, but it's also indicative of how Ministers work.
That said, getting into Ministers' ears probably is especially easy if you're speaking on behalf of a $50 million a year industry [Updated: The IRD actually estimates it to be a $24 million a year industry] and are able to waive the PM's name around when doing so. Which brings me to the second point. There's something of a discrepancy between how John Key is representing his conversation with Ken Whitney and what Mr Whitney told Revenue Minister Todd McClay about it in December of 2014.
Mr Key's claim is that he said he simply didn't know anything about any looming changes and that Mr Whitney should talk to Mr McClay about it. But Mr Whitney told Mr McClay that Mr Key had said there were "no current plans for change". Which makes me wonder how relaxed John Key is with his personal lawyer apparently misrepresenting his position in an effort to convince another Government Minister to adopt a policy stance helpful to his other clients.
Leading to a third thing. According to RNZ news:
The day after Mr Whitney's email to Mr McClay, the minister's office contacted Inland Revenue to say the minister had "expressed some concern that one of the options that will be presented in the report to him before the end of the year would be a removal of the foreign trust regime".
Inland Revenue senior official Carmel Peters responded saying they would "bear this in mind in how we write the report".
This strikes me as pretty poor on the part of both the Minister's office and IRD officials. Sure, Ministers in the end get to set Government policy and make decisions about what advice to accept or reject. But this looks like the Minister was telling his officials "I don't even want to hear about why NZ might want to end this policy, irrespective of the reasons to support it". And having been told this, the officials simply accepted that the territory was verboten.
Whatever happened to a neutral public service that is tasked with providing "free and frank advice" to Ministers? Maybe Dr Chris Eichbaum has something of a point when he suggested recently that "public servants might just provide ministers with the advice they wanted to hear, rather than what they needed to hear."
[Updated: In Matt Nippert's article in today's NZ Herald, he notes that in a briefing note to Mr McClay the offshore trust industry:
explained how the sector attracted "high wealth families" as clients, who were attracted by New Zealand's political stability, incorrupt public service and, particularly, our "respect for privacy and commercial confidentiality".
Finally, the Government's response to this whole issue seems to be to try to shrug it off as "business as usual". OK, then ... let's take that claim at face value. That means we can look at the pattern of events here and extrapolate it across the rest of the Government's decisions - this exemplifies how policy is made under John Key's National Government.
How does that make us feel?