New Zealand First Leader, Winston Peters, says the Government must know tax avoidance is occurring in Pacific nations through the use of offshore trusts.
It follows a statement from the anonymous leaker behind the Panama Papers this morning which singles out Prime Minister John Key for being "curiously quiet" about Cook Island tax affairs. It also says that in Niue, Mossack Fonseca has essentially run "a tax haven from start to finish".
Mr Key is the only world leader to be named in the 1800 word manifesto by the whistle-blower, who goes under the pseudonym John Doe.
"Prime Minister John Key of New Zealand has been curiously quiet about his country's role in enabling the financial fraud Mecca that is the Cook Islands," says the leaker.
A database of information from the Panama Papers is due to be released in a searchable digital format on Tuesday at 6am titled: "The Revolution Will Be Digitized".
Mr Peters told The Nation the statement shows John Key had to know that tax avoidance through foreign trusts was occurring in Pacific nations, and he expects more revelations to come.
"If you come from Merrill Lynch and pose as a financial wiz kid you would surely be expected to know more than most," he says
Mr Peters also says the mention of the Prime Minister by the whistle-blower is an indication of where the scandal is set to unfold in this part of the world.
"[New Zealand's] positioned here in the South Pacific, giving aid to countries who [are] at the same time running tax haven utilities or using all sorts of fancy phrases for cheating and fraud and money laundering."
Labour deputy leader Annette King says John Key is "donkey deep" in the area of foreign tax havens.
She says the Prime Minister is "very much in favour of foreign tax havens in New Zealand" and adds it's "disgusting" New Zealand allows people to avoid tax obligations in their own countries by keeping their money here.
"What would we think if New Zealanders were putting their money somewhere else and avoiding tax here in New Zealand when they take all the services; the health, the education, the roads, etc?"
Ms King adds the government must have a "full, independent inquiry" and scrap the one currently set up that's being led by John Shewan.
The kiwi at the Head of the Centre for Public Integrity, Peter Bale, says John Key being singled out is a 'bolt from the blue'.
He says New Zealand's trust laws are considered a "soft touch".
"NZ trust law has been very open to abuse and used by people setting up both legal and presumably illegal; shell companies,"
"Many other places in the pacific have been used over time and the leaker identifies Niue in here and really says that Mossack Fonseca was involved in the writing of legislation to aid and abet what it was trying to do in terms of shell companies around the world."
Mr Bale says while New Zealand doesn't have control of pacific islands tax policy, New Zealand does have a lot of influence.
He adds the Prime Minister's links to trust lawyer Ken Whitney and Mr Key's comments inferring the Panama papers are a cyber-security threat are striking.
In a statement to Newshub a spokesperson for the Prime Minister says the Government will consider the Panama papers once they are released in full.
"The Government has always said it will consider any issues raised in relation to New Zealand's foreign trust rules and investigate whether any practical improvements could be made," says Mr Key's spokesperson.
They added a review of the disclosure rules around foreign trusts is already underway and the Government is participating in the OECD's ongoing work around addressing international tax issues.
Newshub.
