Home is where the heart is

Way back in 1966, the BBC in Britain screened a television play entitled Cathy Come Home. 

n what these days would be termed a docudrama, it told the distressing story of a young working class family ripped apart by homelessness.

It was fictional. But what has been described as its “gritty realism” shocked most of the estimated 12 million viewers who watched the first of many screenings.

It portrayed a much darker side of life in Britain in the so-called “swinging sixties”; one in which people could fall through gaping holes in the supposed safety net of the welfare state through no fault of their own.

It will come as no great surprise to those acquainted with his films that Cathy Come Home was directed by Ken Loach, someone who wears his left-wing politics as a badge of pride.

But in the case of Cathy Come Home, Loach’s politics were irrelevant. The work still ranks in most television critics’ minds as one of the most influential productions in television history.

Its impact was so profound that the story goes that the actor who played the role of the mother would be stopped in the street by strangers who would hand her money. That was in large part because of the mother’s fate in losing her children who were placed into state care in the drama’s harrowing finale.

Over the last couple of weeks or so, New Zealand has played out its own version of Cathy Come Home.

The blight of child poverty has bubbled away for some time as a political issue. National thought it had contained it, most notably by stealing a march on Labour by increasing benefit rates for the first time in literally decades.

But the extra $25 a week for beneficiary families, which came into effect last month, has so far paid little by way of a political dividend.

National instead has been the proverbial stunned mullet in struggling to put an end to the seemingly never-ending media exposure of the numbers of people living in cars, garages and (and if they are lucky) chronically overcrowded houses.

John Key and his ministers continue to argue there is no crisis. In doing so, they only succeed in appearing to be in denial. However, yesterday’s surprise announcement on the eve-of Budget day of a new scheme which dangles the carrot of a $5000 grant to entice state house tenants and the homeless to leave Auckland and go and live in the regions indicated a degree of panic seeping out of the Beehive..

It is a sticking plaster-like solution to a byproduct of the complexities of the Auckland housing crisis, more exactly the shortage of affordable homes for low-income earners to either buy or rent.

National has become trapped in its own dogma. Like some kind of mad scientist, Bill English is still conducting his experiment of trying to create a market whereby privately-owned or run housing organisations would compete against one another to be providers of what is now termed as “social housing”.

Such an ideology-driven reform has required the run down of the existing state provider, Housing New Zealand,. This is in order to ensure the corporation’s current dominance in the provision of housing for beneficiaries does not translate into market-distorting monopoly.

English’s Treasury-backed scheme has taken the best part of six years to reach even the pilot stage. That time-lag in itself suggests the notion  of creating a social housing market for those at the very bottom of the economic heap is fundamentally flawed and impossible implement unless you subsidise private providers to enter the market by handing them Housing New Zealand stock at knockdown prices.

Such twisted logic is compounding homelessness because the demolition of Housing New Zealand is already under way without the market alternative being in place. Little wonder people are falling through the cracks.

Making what may well turn out to be the most politically foolish statement by a politician this year, Building and Housing Minister Nick Smith argued that the idea that homelessness had suddenly happened in May 2016 was a “figment of some people’s imagination.” In other words, the poor have always been with us.

But if the answer to housing the homeless is the latter ending up thousands of dollars in debt to Work and Income for money loaned to them to stay in motels, then it must be a rather stupid question. It is the stuff of Kafka.

That there is a new category of the poor who are victims of circumstances far beyond their control and who cannot be dismissed as welfare bludgers is something which will disturb fair-minded New Zealanders, whatever their politics.

What is most puzzling is why an administration that takes an “investment” approach to social policy by targeting problem  families at an early stage in the hope of saving money in the longer term on things like prisons and mental health units,, is making it ever more difficult for such families to get access to the most fundamental driver in improving social outcomes. That driver is decent housing.

Regardless, parents and their children living in cars fits no-one’s vision of what is acceptable in what is supposed to be God’s. Own country.

The “Kiwi Dream” may have become a cliche. But the belief that everyone should be given a fair go remains embedded deeply in the nation’s consciousness. 

In  failing to acknowledge that homelessness has reached crisis levels, National risks being seen as ignoring that national trait.

Today’s Budget will provide the measure of whether National is losing its heart along with its head.

The Key Doctrine: Confuse in order to Defuse

So the Prime Minister got booted out of Parliament last week. Well, big deal. The only surprise is that John Key had not been turfed out of the chamber before now.

Speakers are reluctant, however, to eject prime ministers for bad behaviour during question-time because that only punishes Opposition parties whose job it is to hold him or her to account.

There’s no show without Punch.

Key tends to push the boundaries and tries to land as many verbal jabs — many of them not relevant to the question at hand — on his opponents as he can before the Speaker calls time and interrupts him. Sometimes Key carries on regardless.

David Carter finally lost his patience last Wednesday. Having issued repeated warnings which Key ignored, Carter ordered Key to leave for failing to “resume his seat” when the Speaker was on his feet.

Labour tried to argue that the Prime Minister had simply lost the plot. But Key never loses the plot — especially when he knew very well that he was going to get another barrage of questions from Opposition parties on the Panama Papers, the handling of which has not seen National covering itself in glory.

Others have suggested Key deliberately got himself thrown out; that it was a stunt for the benefit of the television cameras. If so, it was something a prime minister can only do once. Were it to become a habit, he or she would stand accused of running scared of the Opposition.

Key, however, did not need to create a distraction. He had already produced one by dragging Greenpeace, Amnesty International and the Red Cross into the argument over whether the latest batch of the Panama Papers further underlined the Government’s embarrassing failure to tighten the disclosure requirements of foreign trusts, ministers having ignored Inland Revenue advice to do so following lobbying from the small number of New Zealand companies engaged in the lucrative business of setting up such trusts for the benefit of overseas entries.

The papers showed that while Key has repeatedly insisted that New Zealand is not a tax haven, the country is making a very good impression of being one.

Trying to defend the indefensible, Key has continued to argue that everything is hunky dory with regard to the existing law and regulations covering foreign trusts, while at the same time giving assurances that if the official inquiry being conducted by tax specialist John Shewan found fault with the existing regime, the Government would look seriously look at any recommendations he might make for change.

With Key taking shelter under an inquiry which initially he had been extremely most reluctant to establish, the Prime Minister found himself on the receiving end of a very relevant and highly potent question from Greens co-leader James Shaw ,which showed just how weak was Key’s assertion that New Zealand did not fit the definition of a tax haven. Shaw wondered that if  New Zealand was not a tax haven, why would Mossack Fonseca—a company for whom tax avoidance by its own admission comprised 95 per cent of its business —urge its clients to use New Zealand’s foreign trust and company structures.

But Key had something up his sleeve. He replied that there were quite legitimate reasons why people had a foreign trust. He then made the startling suggestion that Shaw ring Greenpeace, Amnesty International and the Red Cross “because they are implicated in the papers”.

The notion that any of those organisations have dodgy trusts secretly hidden in tax havens is preposterous. Their good names have simply been hijacked by other entities setting up such trusts for possibly nefarious purposes.

It is a political maxim, however, that if you can define what the debate is about you are halfway to winning it. Key is a master when it comes to shifting the focus of an argument. Moreover, he is not that fussed about what means he employs to do just that.

This modus operandi has previously been described by Grant Robertson, one of Labour’s senior MPs, as a strategy of “distract, divert and diffuse”, the latter word meaning to spread the blame for something going wrong as widely as possible.

Labour has other “d” words to describe Key’s methodology for averting or stemming political trouble — words like deny, deflect, denigrate and demean.

Key’s confuse-to-defuse tactics were most visible in his accusation last November that Labour was backing “murderers, rapists and child molesters” by supporting New Zealand detainees in Australia’s Christmas Island detention centre.

This highly provocative assertion  — made in Parliament — sparked a mass walkout by Labour MPs. Key would have been confident that both major television channels’ coverage on that night’s news bulletins would focus on the parliamentary fracas, rather than on the real story — the Government’s feeble response to Australia’s outrageous, unjust and cruel decision to deport New Zealand citizens with criminal records even though they may have lived most of their lives in Australia.

Last week’s events had Andrew Little accusing Key of being up to his “old tricks”. The Labour leader acknowledged the Prime Minister had tried to divert attention away from his support for the “grubby foreign trust tax-dodging industry”. But this time — Little claimed — Key had failed to do so.

That is arguable. Both Little and Shaw ended up going some way down Key’s diversionary path to nowhere. When Parliament met on Wednesday, both leaders demanded that the Prime Minister apologise to the three organisations which he had implied had foreign trusts.

But Key’s story had changed overnight. He was now saying that what had happened to the likes of Greenpeace was an example of how the names of innocent New Zealanders had been sullied by them having unwittingly ended up on the Panama Papers database.

Ipso facto, the database should be “taken with a grain of salt”.

As it was, by mid-week, the release of that database had not proved to be quite the treasure trove that Opposition parties had been expecting. The story would have kept running if the names of many more prominent New Zealanders had been on the database. That would have provided the local angle that more and more drives New Zealand  media coverage of international events more and more.

 Instead, the story was fizzing out, thus seemingly giving more credence to Key’s assertion that the Panama Papers amounted to “incrimination by insinuation”.

The real story in the papers, is how foreigners are using New Zealand’s lax regime to avoid or evade paying tax in their home countries.

The focus will now shift to the findings of the Shewan inquiry which is due to report by the end of next month. His appointment was not free of controversy.

Whatever his findings, his report will be a political football that is going to get a lot of kicking. No pressure, Mr Shewan.

As for apologies, Key finally made one on the last day of Parliament last year for his “murderers, rapists and child molesters” outburst. Greenpeace, should not hold its breath in anticipation of likewise getting an expression of sorrow from the Prime Minister.

Jungle Boy boxes Foxes

 

No-one would want to rain on Leicester City’s parade.

RMAnd what a parade it was. One British national newspaper described the cacophony which greeted the team members as they made their way to a local Italian restaurant for a celebratory lunch as being akin to Jesus’ triumphant ride into Jerusalem.

But elsewhere not everyone is quiteh so willing to applaud the Foxes for having pulled off what was widely thought to be impossible.

Leicester’s fairytale season made a mockery of the notion that an unfashionable club without much money (relatively speaking) would never again become champions of the English Premier League.

Ray Crawford is one person who certainly doesn’t think Leicester has done something unique. Ray who? Well, once Leicester had been confirmed as Premier League champions, Crawford would have been one of the first people contacted by the sports desk at the Ipswich-based East Anglian Daily Times.

The reason? The 79-year-old Crawford was a member of the Ipswich Town team which sent shockwaves through English football by winning the First Division title back in 1962 — the equivalent of what Leicester has achieved in the Premier League this season.

Crawford thus has grounds to question the hyperbole which has gushed from the media and elsewhere in the week since Leicester’s triumph. Crawford told the newspaper he and his team mates were even bigger underdogs than the current Leicester side.

Well, he would say that, woudn’t he? Unlike Leicester, however, Ipswich had the added kudos of winning the title in the club’s first season in the top flight, having been promoted from the old Second Division the previous season.

No-one in the team had played at international level. Like Leicester, Ipswich were considered to be a collection of nobodies and a prime candidate for relegation straight back to where they had come from.

So much for the pundits. Ipswich began the season in August with a draw and two losses. The team then defied expectations and won the next five games. There was another purple patch during November, with Ipswich beating Tottenham Hotspur, the previous season’s champions, along with Manchester United and Chelsea. By February, Ipswich was in second place behind Burnley, whom were eventually overhauled, making Ipswich the new champions.

The person who was most responsible for this unexpected success was Ipswich’s manager, none other than Alf Ramsay, the man who would earn the everlasting thanks of his nation four years later when England, under his stewardship, won the World Cup for the first and so far only time.

Ramsey’s England team came to be called the “wingless wonders”. In those days, wingers were supposed to patrol the touch line and draw marking full-backs out wide before crossing the ball to the team’s centre-forward who would rise above the opponents’ centre-half and head the ball past the goalkeeper and into the net.

Ramsay pulled his wingers back into a deeper position which made them more like midfielders than forwards.This tactic had its genesis at Ipswich.

It confused opponents’ defenders. Ipswich’s strikers — Crawford and Ted Phillips — scored 61 goals between them. With a total of 33, Crawford, who was nicknamed “Jungle Boy” by the team’s fans because he served briefly with the British army in Malaya,was the division’s top equal goal scorer.

In contrast, Leicester hero Jamie Vardy has hit the back of the net 24 times this season, but from fewer appearances.

Both clubs benefitted hugely from some of their heavyweight competitors, like Chelsea  and Manchester United, being out of form and having poor or patchy seasons.

For all his success on the pitch, however,Crawford was paid the princely sum of £30 a week — which is equivalent to about $1000 in today’s money. In contrast, Chelsea’s best players who are on three-year contracts now get from between £140,00 to £185,000 a week.

The scale of such rpayments highlights the crucial difference between Leicester’s and Ipswich’s respective achievements. A handful of clubs are now awash with cash partly thanks to having (usually foreign) multi-millionaire owners. The playing squads of those top Premier League sides squads are stacked with some of the world’s best players, including internationals from Argentina, Brazil, Spain and African countries, such as Nigeria, Senegal and Cameroon. Those squads have a vast depth of talent to insure the club as much as possible is not affected detrimentally by injuries or a hectic schedule of matches. Back in 1962, there were few foreign players on the books of English clubs.

The ever-widening of the gap in the wealth between an elite few clubs and the rest makes unfancied Leicester’s winning of the Premier League more of an achievement than Ipswich coming out on top of the First Division back in 1962. But not by that much.

Ipswich slipped to 17th place in the next season and were relegated to the Second Division in the following one.

Leicester’ fans should make the most of things while they can. Next season will come around soon enough. Rumours have swirled for months that the big clubs have been sniffing around Vardy and Leicester’s other star players. Some of those are bound to be lured away by big money offers. It may sound depressing, but the brutal truth is that life at the top for such clubs is always  brief  and they have to transform themselves into outfits which are hard to beat if they are to survive in 7the Premier League.

  • As  f at as upsets in a single match go, the United States1-0 victory over England in the 1950 Worldh Cup in Brazil was of real David and Goliath proportions. The American team was comprised of unknown semi-professionals and amateurs, including the driver of a hearse. An England victory was considered to be a formality. So much so that when the result was telegraphed to the world’s newspapers, many assumed that the operator had meant to type 10-1 in England’s favour. The New York Times delayed publication of the shock outcome of the match because it thought it was a hoax.

If the Panama hat fits, you’re going to wear it

Back in the old days when Parliament was not televised and there were fewer MPs to accommodate in the House, members’ guests had the privilege of being allowed to watch proceedings from behind a low-curtained rail at the very back of the chamber, rather than with the hoi-polloi in the public galleries above them.

During the always lengthy debates on an oft-reviewed piece of law, this area was filled by a gaggle of nondescript middle-aged men, They were not present because they enjoyed listening to what passed for parliamentary oratory. They were there to ensure their bosses got value for their money.

They were the eyes and ears of the liquor barons. The latter made large donations to both Labour and National. Although MPs were supposed to get to vote on liquor legislation without being subject to a party whip, such free votes were not as free as was claimed.

This behaviour by the liquor industry was lobbying in its crudest form.

These days, things are a little more sophisticated. Obtaining the expensive advice of public relations consultants on how best to present their case to ministers, businesses either on their own behest or as representatives of one of a multitude of sector groups beat a path to the Beehive with the intention of creating the minimum of attention from outsiders.

Such careful lobbying makes it easier for ministers to change their minds and those of their Cabinet colleagues if they are not being seen as pressured to do so.

All of this  is why National has had such an embarrassing few days with regard to the reform (or rather the lack of it) of the law covering the setting up of overseas-controlled trusts in New Zealand.

A stack of emails, letters, official reports and industry submissions obtained by the Greens under the Official Information Act has shone a torch on the dark underbelly of the Body Politic.

It is not a pretty sight. It shows the National-led Government caving in almost immediately to the trust industry once the latter got wind of a possible review of law and regulations covering foreign trusts.

It is a reminder that while John Key is busy charming the huge number of voters who straddle the centre of the political centre — and not just a few others who might normally consider themselves to be slightly left of centre — National never forgets its more loyal friends.

The benefits of having a New Zealand-based foreign trust include exemption from New Zealand tax on foreign sourced income, minimal compliance and reporting requirements, and no requirement for public disclosure of the beneficial owners.

Some tax experts go as far saying the lax rules coupled with little monitoring of compliance effectively make New Zealand a tax haven.

The Inland Revenue Department does not go that far. But in late 2014, senior IRD officials — and not for the first time — tried to gently prod the Government to allow them to conduct a much-needed review of the legal regime covering foreign trusts.

Instead, the shutters immediately went down in the Beehive. There was some brief, but intense lobbying of ministers by the handful of companies who make a pretty generous crust from advising and helping international clients to set up a foreign trust in New Zealand.

Within a matter of weeks, those companies had received a written assurance from ministers that there would be no-such review because the IRD now had “higher priorities” to handle. It was all done quickly and easily. Given that international tax law is almost always horribly complex and that most people are totally devoid of even the slightest interest in the subject, National would have been confident in the extreme that blocking any review would be an absolute doddle when it came to the politics of the matter.

This dreamy state of affairs suddenly turned into the stuff of nightmares with the  leaking of more than 11.5 million financial and legal records hidden in offshore companies by the rich and famous.

The  Panama Papers instantly turned something which operated well below most people’s radar into a burning issue in terms which the public could well understand.

 Moreover, there were New Zealand connections in the papers. Two high profile figures in Malta and Muscat had used New Zealand’s trust laws to set up offshore trusts.

When questioned about the adequacy of New Zealand’s trust disclosure requirements, the Prime Minister was the very model of discomfort.

He insisted this country was not a tax haven. With pressure for an inquiry building relentlessly, however, Key finally conceded there would have to be one.

Key’s defensiveness was understandable. Having reassured those involved in the foreign trust industry only 12 months earlier that there would be no review, here he was effectively announcing one.

The degree to which National had hoist itself on its own petard only became apparent last week. Having long sought a tightening of the rules covering foreign trusts, the Greens struck gold with their well-timed Official Information Act request.

The party received 46 pages-worth of documents. Some material was blacked out. But there was enough left to join the dots.

Much attention has focussed on a conversation between Key and his personal lawyer Ken Whitney, who is also executive director of the trust-formation company Antipodes, which was one of the firms which lobbied against an IRD review.

In raising the matter, Whitney risked compromising Key by creating a perception of a blurring of the lines between the professional and the personal.

There are also questions about whether an email sent by Whitney to then Revenue Minister Todd McClay in which the former said Key had told him there would be no review unduly influenced that minister.

As far as Opposition parties were concerned, it all added up to one thing — cronyism. Key took an unusually long time to sought out who had said what, thereby allowing that accusation to linger.

Such conversations occur all the time, however. Easy access to politicians is one of the major pluses of the New Zealand political system.

Whitney’s mistake was to mention his chat with Key in an email which was discoverable under the Official Information Act.

But attempts to sully Key’s reputation by highlighting apparent inconsistencies in what he did or did not do about something or what he did or did not know about something or what he did or did not say to someone have cut little ice with swinging voters.

Even so, not for a long time has National looked as flummoxed as it now does in its handling of the foreign trust imbroglio.

That sudden mini-crisis of confidence was evident in the Official Information Act release to the Greens.

In an unusual move, Michael Woodhouse, the current minister in charge of the IRD, attached a lengthy memo to the documents.

This document attempted to play down the significance of the otherwise embarrassing contents of the material he had released.

Woodhouse noted that the IRD had never recommended that the foreign income of foreign trusts should be taxed. The current system had been in place since 1988 and had not been changed by previous Governments including the last Labour-led administration.

He referred to a report produced by IRD in late 2014 which had stressed New Zealand was not a tax haven because real tax havens were all about secrecy.

However, the preceding paragraph in the report acknowledged there was concern in other countries with much tighter regulations to minimise tax avoidance that New Zealand’s rules were not good enough.

Funnily enough, Woodhouse’s memo failed to mention all that — just as it ignored the following paragraph which was even more damning.

It warned that there was a perception that New Zealand might be a tax haven was damaging the country’s “clean” international reputation. That could only get wors as other OECD nations took further steps to curb harmful tax practices

If Woodhouse thought his spin and selective quotes would have any impact on the Greens — or anyone else for that matter — then he had to be the ultimate optimist.

Much now hangs on the inquiry being conducted by tax expert John Shewan. He says he will be investigating whether the relevant legislation is still “fit for purpose”. He is required to present his findings and any recommendations by the end of next month.

That might have given the Government some much needed breathing space. However, the International Consortium of Investigative Journalists, which is co-ordinating the release of the Panama papers, is planning early next week to make a searchable database available which will contain information on some 200,000 offshore companies.

National just can’t wait.