The revelation that hundreds of world leaders have been storing assets in offshore accounts shows the need for more relaxed banking laws, New Zealand’s prime minister said on Wednesday, and is also an argument for that country to become the “Switzerland” of the Pacific.
“I think there’s a role for New Zealand to play in providing financial services,” Prime Minister John Key said in an interview with the New Zealand Herald. “We … have very strict obligations around disclosure and we meet those obligations.”
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More than 11 million documents leaked from Panamanian law firm Mossack Fonseca over the weekend showed the firm had surreptitiously set up 250,000 offshore accounts for world leaders over the last four decades. That stoked global outrage and resulted in the resignation of Iceland’s prime minister, but Key, who previously worked as the head of global foreign exchange for Merrill Lynch, said he doesn’t see the problem.
He pointed to Switzerland as a model for what New Zealand should do, but said it was “going through a significant change in terms of its disclosure regime … From New Zealand’s point of view, we’ve got all these tax treaties, we disclose information where it’s required in terms of trustees, and other countries can follow that up.”
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Key, who also sat for two years on the Foreign Exchange Committee of the Federal Reserve Bank of New York, has been making the case for New Zealand to reform financial service laws for more than a decade. He said in 2005 that he would like to see it become the “Jersey of the South Pacific,” a reference to a British Crown dependency off the coast of France that has a reputation for being a popular tax haven.
Speaking in parliament on Wednesday, Labor Party finance spokesman Grant Robertson condemned Key’s push for reform. “We want an economy in which people aren’t serving coffee to the one percent, [where] we’re actually making and building the things that will help people have a share in prosperity,” he said.
