David Henderson
David Henderson

Trirds Triumphant?

(Shown are actual cartoons from the IRD.)

Don't hold out too much hope that the current Parliamentary inquiry into the powers and operations of the IRD is going to lead to some reasonable clean up of that out-of-control department. It's definitely not going to lead to major reforms.

Click to enlarge.The inquiry process being undertaken is a political one and will, ultimately, only serve political ends. It is not a judicial process seeking to review standards against some moral yardstick.

Each party and individual there has their own agenda; Labour has focused on the department's negotiations with its staff and the prospect of the department undertaking staff layoffs. National has worked to play the whole affair down and to avoid the harsh reality that, over the last 9 years, successive National Revenue Ministers have allowed the department to slide even more out of control and abuse their constituency. New Zealand First have banged away with Winnie's line that the IRD's main fault is that it turns a blind eye to tax evasion.

Click to enlarge.Peter Dunne, chairman of the committee conducting the inquiry, was Minister of Revenue for about 18 months. Amongst other things, he presided over the introduction of the current penalties regime, the source of so many bankruptcies and taxpayer pain. It was also during this period that Ian Mutton killed himself. Graham Holland, Commissioner of Inland Revenue, regularly meets privately with Peter Dunne - eleven times in fact since the inquiry started.

ACT's Rodney Hide has been incessant in pushing the IRD and revealing the rot inside. Interestingly, John Wright, the only Alliance member on the committee, has probably been Rodney Hide's most consistent ally. He appears to understand that there is a problem, and, being the only businessperson on the committee, has empathy for what small business, in particular, has to go through.

Click to enlarge.The big problem most members have is that getting their hands on tax money, getting their hands on the fruits of the IRD's effort is their raison d'être. It's why they're there. The moral justification they employ to take your money also implicitly justifies the way in which it is taken. At times, Labour members of the committee have almost looked amazed, even shocked, that people have the temerity to complain about how the IRD has treated them.

My own appearance before the committee was fascinating. Before I appeared the Committee resolved that Rodney Hide should stand aside during my submission. He had written the foreword to my book, Be Very Afraid: One Man's Stand Against the IRD, which I had included as the part of my submission. As the TV cameras rolled each party gave their best shot to try and discredit me and give justification to the IRD's poor treatment of me.

It was an amazing experience. For nearly three hours I was under attack. To any outsider it would have appeared that I was the subject of the inquiry, not the IRD. I was treated more harshly and with more enmity than the IRD have ever been since the Inquiry's inception.

Click to enlarge.

Unionist, Mark Peck, (Labour MP for Invercargill) questioned me extensively about a series of scraps I had with a trade union almost 20 years ago. His union, as it turns out. His questions had nothing to do with the powers and operations of the IRD. He had before him over an inch of court records documenting several lengthy court cases I fought against the Hotel and Hospital Workers' Union. Of course, I had lost every single case. I had refused to force my staff to belong to a union they didn't want to join. That was clearly against the law. Today it is the legal position.

Eventually, as the fines and penalties imposed by the court built up, I liquidated the company and personally paid out all the creditors, with the exception of the fines and penalties due to the union. As the union's former Invercargill representative, Mr Peck was clearly not too impressed. For him, it appears, my stand against compulsory unionism was solid justification for an IRD beat-up.

The Nats weren't any better. For Gerry Brownlee (National MP for Ilam), it was only his second appearance on the Committee in over two years. It was clearly a huge occasion. You see, in my book I had criticised Gerry for failing to help a constituent in trouble. Gerry thought that was unfair. This was payback time. Gerry started his performance by trying to block me playing some damning tapes I had secretly made of a meeting with an IRD official. Gerry explained to the Committee that back in his office he had a transcript of the meeting and in that transcript, Gerry assured the committee, I am questioned as to whether I was taping the meeting and give an absolute assurance that I was not. Gerry was painting me as a liar, working hard to discredit me. What he told the committee was pure fabrication. No such transcript exists. To this day, despite my requests, he has not explained, or apologised for, his behaviour. Nor has the Chairman required him to do so. Eventually, I got to play the tapes. I need not have bothered. Hard evidence of IRD staff acting improperly was not what this committee was there for that day.

Gerry's National Party colleague, Alec Neill, was there to deliver the master stroke. Like Brownlee he never questioned me on the IRD or my serious allegations about their behaviour. Rather, he went over similar ground to Mark Peck, suggesting I was an anarchist, had no respect for the IRD or even the police and that I advocated tax evasion. He questioned me considerably about some companies I had been involved with that had gone into liquidation. He showed little interest in my explanations or the evidence I wanted to submit to show how I had personally paid out creditors of those companies, including the IRD. The reason for this soon became clear when he concluded his cross examination by telling me I was "nothing more than a white collar criminal of the worst possible kind."

This of course was a made-for-the-media, punchy sound bite. It was also made under the veil of parliamentary privilege. Winston, to his credit, jumped to my defence, demanding Neill withdraw this allegation and argued, correctly, that there was no evidence of any criminal activity by me.

By the end of the day the members would have been well satisfied. They had put in a big effort, not to hear my story, understand my allegations or even hear my substantial and voluminous evidence, but rather to discredit a vociferous IRD opponent and, by implication, discredit one of their members, Rodney Hide, who of course has championed my case.

Rodney's problem is that he has been too effective. Never before has a member of Parliament been so determined or so successful in highlighting what is wrong with our most powerful department of state. The more Rodney leans against the boil that is the IRD, the more puss oozes. So successful has he been that he now owns the brand. Therein lies the problem: every time the committee finds that the IRD have acted improperly, every time another story of misbehaviour and abuse is revealed Rodney's position is validated. He's made to look good. I can assure you not one member of that committee aspires to that. Especially those members who steadfastly resisted any inquiry into the IRD or those who have been that department's inept political masters.

The inquiry continues. No doubt the IRD will eventually concede on some small items. Something they can live with and that will make Mr Dunne and his committee look as if they have achieved some positive conclusion.

They don't have the will to take the bold and important step of reversing the burden of proof. That's real sad. But, even more sadly, they don't individually have the moral understanding or humility to acknowledge what a massive problem really exists, and that it urgently needs to be cleaned up.


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