Trusts shield MPs' assets
07 April 2006
By TRACY WATKINS
Up to half of New Zealand's MPs may be shielding their assets in family trusts, the first ever register of politicians' financial interests reveals.
The register forces MPs to declare their business and property interests for the first time, bringing them into line with Cabinet ministers, who have to declare their financial interests each year.
It shows that some MPs have a web of business and other interests –and also reveals that some MPs are earning money outside Parliament, including book royalties and director fees.
National list MP Richard Worth was paid for work as a director, barrister and adviser.
But the register does not put a dollar figure on MPs' assets – its foreword makes it clear that it is not intended as a "recital of wealth".
But it also shows that 52 MPs are paying a mortgage, even Parliament's richest man, National MP John Key. Prime Minister Helen Clark has a mortgage too – she has four properties – a house in Auckland, a townhouse in Wellington, an apartment in Christchurch and an investment property in Rodney. Labour backbencher Phillip Field owns seven houses.
His Labour colleague Ashraf Choudhary, a Muslim, has invested in the Sky City casino. Many Muslims revile gambling.
Also, unsurprisingly given that MPs have a generous superannuation scheme which gives them a taxpayer subsidy of up to 23 per cent, they all have super schemes.
According to the register, 38 MPs hold a beneficial interest in a family trust; a further 19 have declared beneficial interests in trusts, but they have not listed them as family trusts.
Investment and property expert Martin Hawes said people entered trusts for a variety of reasons.
"Common reasons for family trusts are getting around the asset-testing regime for rest-home care, but that's unlikely to be bothering too many MPs.
"The second one is tax – people hold investments in trusts so the income from their investments is not added to their personal income. It's therefore taxed at 33c in the dollar," he said.
A lot of trusts were formed now for property relationship purposes and also to protect confidentiality.
But blind trusts, which may be set up to keep an MP at arm's length from any investment decisions to avoid a conflict of interest, were one possibility.
Nationally, there were about 200,000 family trusts. Though the number of MPs who appeared to be in family trusts might seem higher than the national rate, that was probably not surprising, Mr Hawes said.
"If anything, I'd be slightly surprised that only 38 MPs have formed trusts. I thought maybe it would be higher.
"Large numbers of people from business backgrounds have trusts, so I'd expect an awful lot of MPs and politicians who have come from business backgrounds would have formed a trust at some point over their business careers."
A register of MPs' pecuniary interests was first mooted in 2003 but ran up against stiff opposition from some MPs.
Richard Prebble, who was ACT leader then, labelled the plan as the politics of envy and the bill was shelved for some time.
MPs have to declare who pays for any overseas travel they embark on and must also confess to any gifts they receive.
But according to yesterday's register the biggest perk most received was free membership to the Koru Club.
Labour MP Jim Sutton owned up to receiving two bottles of wine from a Macau business owner, including a 1986 Chateau Margaux and a 1990 Petrus.
07 April 2006
By TRACY WATKINS
Up to half of New Zealand's MPs may be shielding their assets in family trusts, the first ever register of politicians' financial interests reveals.
The register forces MPs to declare their business and property interests for the first time, bringing them into line with Cabinet ministers, who have to declare their financial interests each year.
It shows that some MPs have a web of business and other interests –and also reveals that some MPs are earning money outside Parliament, including book royalties and director fees.
National list MP Richard Worth was paid for work as a director, barrister and adviser.
But the register does not put a dollar figure on MPs' assets – its foreword makes it clear that it is not intended as a "recital of wealth".
But it also shows that 52 MPs are paying a mortgage, even Parliament's richest man, National MP John Key. Prime Minister Helen Clark has a mortgage too – she has four properties – a house in Auckland, a townhouse in Wellington, an apartment in Christchurch and an investment property in Rodney. Labour backbencher Phillip Field owns seven houses.
His Labour colleague Ashraf Choudhary, a Muslim, has invested in the Sky City casino. Many Muslims revile gambling.
Also, unsurprisingly given that MPs have a generous superannuation scheme which gives them a taxpayer subsidy of up to 23 per cent, they all have super schemes.
According to the register, 38 MPs hold a beneficial interest in a family trust; a further 19 have declared beneficial interests in trusts, but they have not listed them as family trusts.
Investment and property expert Martin Hawes said people entered trusts for a variety of reasons.
"Common reasons for family trusts are getting around the asset-testing regime for rest-home care, but that's unlikely to be bothering too many MPs.
"The second one is tax – people hold investments in trusts so the income from their investments is not added to their personal income. It's therefore taxed at 33c in the dollar," he said.
A lot of trusts were formed now for property relationship purposes and also to protect confidentiality.
But blind trusts, which may be set up to keep an MP at arm's length from any investment decisions to avoid a conflict of interest, were one possibility.
Nationally, there were about 200,000 family trusts. Though the number of MPs who appeared to be in family trusts might seem higher than the national rate, that was probably not surprising, Mr Hawes said.
"If anything, I'd be slightly surprised that only 38 MPs have formed trusts. I thought maybe it would be higher.
"Large numbers of people from business backgrounds have trusts, so I'd expect an awful lot of MPs and politicians who have come from business backgrounds would have formed a trust at some point over their business careers."
A register of MPs' pecuniary interests was first mooted in 2003 but ran up against stiff opposition from some MPs.
Richard Prebble, who was ACT leader then, labelled the plan as the politics of envy and the bill was shelved for some time.
MPs have to declare who pays for any overseas travel they embark on and must also confess to any gifts they receive.
But according to yesterday's register the biggest perk most received was free membership to the Koru Club.
Labour MP Jim Sutton owned up to receiving two bottles of wine from a Macau business owner, including a 1986 Chateau Margaux and a 1990 Petrus.
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