By Russell Norman
WELLINGTON — Auckland has two great monuments to government: the Obelisk, commemorating Michael Joseph Savage, and the Skytower Casino, commemorating Roger Douglas.
Savage was prime minister of the first Labour government, which in the 1930s introduced the welfare state and took on the power of finance capital. Douglas was finance minister in the fourth Labour government in the 1980s, which set about systematically undermining this legacy and giving finance capital great freedom of action.
The result is that New Zealand now has serious poverty and an economy driven by financial speculation, with a current account deficit of around 5% of GDP.
The other great monument to the 1980s, this one emanating from Parliament House, Wellington, was the "wine box inquiry".
Begun in 1994, the inquiry was to assess if the Serious Fraud Office (SFO) and the Inland Revenue Department had turned a blind eye to tax evasion by major corporations in the 1980s.
The inquiry was initiated as a result of the dogged insistence of then renegade former National Party minister Winston Peters (now tame-cat New Zealand First treasurer), who tabled a wine box full of documents in parliament.
On August 14, two and a half years and $16 million later, commissioner Sir Ron Davidson delivered his answer: "No".
He came to this conclusion by arguing that the corporations had been within the letter of the law when they presented Cook Islands' tax certificates to the New Zealand government, even though most of the tax they paid in the Cook Islands had been returned to them.
Even though their actions avoided payment of literally hundreds of millions in tax, they were within the letter of the law. Hence the government agencies had not turned a blind eye to tax evasion because it didn't exist.
Yet what are we to make of the evidence of the former chief prosecutor in the SFO, who could not fathom why the SFO had not prosecuted those involved in the infamous Magnum deal? Or that of the former chief investigator at the SFO, who said that an inquiry into the Bank of New Zealand had been quashed because "our friends in Wellington would not like it".
Or what to make of the actions of corporate heavyweight Carter Holt Harvey, which sent $1.3 billion (20% of the company's assets) to a Cook Islands company in an attempt to dodge tax. Company secretary David Flacks, when asked who controlled the assets, said he thought it was "a Mr Thompson" but didn't think it would be "proper" to find out more than that.
The inquiry produced tonnes of evidence that those who believed there was a conspiracy by corporate NZ to avoid tax were probably right. Moreover, while the government chases beneficiaries for tax payments and enforces the punitive 12.5% GST, the inquiry showed that it is less active in chasing the big fish (surprise, surprise).
Winston Peters, now finds himself in a bit of a pickle.
After the 1996 election, Peters' New Zealand First, with 13% of the vote, joined with the National Party to form a coalition government.
NZ First rose on a combination of anti-Asian immigration and anti-establishment populist politics. Since joining the government, NZ First has plummeted to 3% in the polls. Now the wine box inquiry, which Peters championed, has come out against his allegations.
Politically, he should have another go at them all with a judicial review. And yet he's the treasurer in a pro-business government which has just passed a very ordinary new right budget.
The economy is stagnating. The pressures of the corporations are bearing down upon him. Is he the treasurer or the renegade?
Either way, it matters little. Peters delivered 13% of the protest vote back to the establishment at the last election — halving the vote for the Alliance, which ended up with 10%.
While riding at 3% in the polls, NZ First has a use-by date — 1999, the next scheduled election. Even if Peters does challenge the findings of the commission, it seems unlikely he could convince voters to give him another go.