Wikileaks strikes again! 11million private documents from one firm, Mossack Fonseca, in one tax haven, Panama, are released to a German newspaper, Siddeutsche Zeitung, which shares them out with an international consortium of journalists over some months, before the story  breaks this week.  But somehow the Australian reaction seems to be very different from that other developed countries.  Why is this?

Who released the documents and why?

Unlike when Julian Assange’s Wikileaks released its major assault on government privacy around the Iraq and Afghan wars in 2010, or when Edward Snowden released NSA documents in 2013, so far no one seems to have taken credit for this massive release.

Even more intriguing, no one seems to be asking who is the whistleblower? Is this because the documents were taken from Panama rather than from the US or other developed countries?   Perhaps stealing from a private company in Panama isn’t newsworthy, whereas stealing from the US government is.  Or is it because the whistleblower, who wishes to remain anonymous, realises their future is limited – look at what has happened to Assange, Chelsea Manning (Wikileaks’ key source) and Snowden.

And why has Mossack Fonseca been targeted, when there are several other organisations in the world apparently of similar size doing similar things? Is no one concerned about the invasion of privacy of the hundreds of thousands of individuals and companies whose affairs are now exposed?

Australia’s reaction seems different

In Iceland, there were street riots when the PM and his wife were shown to have accounts at Mossack Fonseca and he resigned almost immediately. In Britain, the PM’s father is shown to have paid no tax for 30 years, with the PM presumably being an ultimate beneficiary to some extent at some time and calls are being made for enquiries and new laws.  A similar concern is expressed in Germany, while in the US the President said it is a global problem that needs to be addressed.

But in self-righteous Australia, despite 800 Australians apparently being named, our biggest production company, BHP Billiton, being involved and a Four Corners program being dedicated to the scandal, there seems to be no reaction at all from the PM or the government and even the Opposition seems to be quite muted in their responses.  OK, there’s an election going on here, so perhaps we have other focuses.  But Britain is debating Brexit, and they vote before we do.

And no one has connected this scandal to the PM’s declaration of his interests in personal investments based in another tax haven, the Cayman Islands.

Even journalists here seem muted. Coverage hasn’t really hit the front pages.  The Age today has two Iceland stories, an interview with Mossack and Fonseca themselves buried at the end of the online business section and an editorial, but there’s no story on any Australian involvement.  Amazing.  Especially since The Age prides itself on just this type of investigative journalism.

Are our media organisations muzzled by libel laws? Is the story too large for them to process? Are our readers and viewers too tied up with the election process and domestic issues? Or are we so used to this type of abuse of our laws and systems by the rich and powerful that we have simply given up and moved on to something easier to digest?

Will the Panama Papers be a societal game changer?

Just as Wikileaks and Snowden demonstrated that our own side is actually spying on us, all the time, that real privacy is virtually non-existent and that what governments tell us publically and what they say behind our backs are quite different, the Panama Papers should be a game changer for international taxation transparency and should lead to the end of tax havens.

But so should the GFC have been a game changer for the financial system and, almost 10 years on, there has been little real regulatory change with few bankers jailed and, although organisations have been fined billions, they just carry on, seemingly unaffected. And recent banking scandals in Australia (financial planning, insurance non-payouts, interest rate rigging) show that bad guys continue to get away with it, even here.

Globally, the amount of tax avoidance through tax free or low tax countries is mindboggling and uncountable. But this is a win/lose game. Every dollar not paid is a dollar of government expenditure that cannot be made. Put positively, every tax dollar gained from stopping tax havens  benefits some government in the world, enabling it to allocate more funding to support ordinary and poor people, rather than rich people and rich organisations.

 

A Personal View

Personally, I find the current business and government situation very depressing…and I’m an optimist! It’s not just the Panama Papers. It’s the endless willingness of the rich and business lobbies to successfully argue for extremely favourable treatment, while social issues (education, hospitals, research, infrastructure, planning, domestic violence, sexual abuse, obesity, climate change, food labelling, water management, energy management and much more) that require tax revenue to provide their funding are treated as second class, discretionary, problems.

‘We have no funds’ they say.  Rubbish!  The funds are there for as much of the social expenditure this and other advanced societies want.  We can afford disability coverage, Gonski  education funding, good hospitals.  But governments and people are going to have to fight the power of the rich and the entrenched powers to force them to pay their fair share of taxes, so that we can all live in the type of fair society, of equal opportunity, that a highly advanced society should be aspiring to, that we used to aspire to.

The Panama Papers just show how sophisticated the tools of the rich are and how hard it will be defeat them.