Turnbull's Name in the Panama Papers Is Important, but Not for the Reasons You'd Think

On Thursday morning Australia's esteemed leader Malcolm Turnbull joined the likes of David Cameron, Vladimir Putin, and Azerbaijan's first family in being named within the papers, which detail the dodgy dealings of Panamanian law firm Mossack Fonseca.

If you've been living under a rock, the firm specialises in helping wealthy businesspeople circumvent their local tax obligations. The personal brand of anyone revealed as one of its clients is definitely going to suffer.

Nobody is bothering to feign total surprise over Turnbull's name showing up in the leaked Mossack Fonseca documents. You don't get to be worth $186 million without directing a few offshore gold mining companies and then selling them off when they mysteriously don't make a profit. Star Mining? Seriously? Did they even try and make it sound like a viable business?

But it should be noted that although Turnbull was indisputably a former director of the offshore company administered by Mossack Fonseca, there's no suggestion he acted improperly. "There is nothing new there," he told the ABC on Thursday. "The company concerned was a wholly owned subsidiary of a public listed Australian company."

While it's definitely legal to set up offshore companies, that doesn't necessarily mean it's the kind of activity you want a future Prime Minister to have been doing. To figure out just how much we should care about the issue, VICE spoke to Fiona Haines, Professor of Criminology at the University of Melbourne's School of Social and Political Sciences.

Haines said we shouldn't be surprised about Turnbull being named in the leaks. Furthermore, she said that "given the sheer quantity of material that has been and will be released, it is likely that many more high profile figures will have their names present."

She explained that information on how offshore businesses can operate both legally and illegally was the true insight. Focusing on individual politicians and whether or not they've acted according to the law perhaps missing the point.

"I suspect a considerable amount of what will be revealed in the papers will not be technically illegal," she told me. "It may simply reflect everyday practices by businesses, practices that are common. What is significant is that many of these practices are rarely subject to public scrutiny—particularly by those who would not normally read about tax issues. Many people would simply not be aware of how businesses conduct their affairs."

What the Panama Papers reveal is that businesspeople have been slipping under the radar for decades with little consequence. And now we're able to make decisions about whether or not we should continue to let that happen.

"It does not appear that any wrongdoing has taken place in Turnbull's case," Haines says. "In terms of tax more generally it is really important to understand the distinction between tax evasion, which is illegal, and tax avoidance which can be legal but unethical. In terms of tax avoidance, businesses and individuals are able to arrange their affairs so they comply with the letter of the law but abuse the intention behind that law."

Haines believes there's an advantage releasing information from the Panama Papers little by little, because we're able to go through the details without being overloaded by information. The documents date back to the 1970s and there is far more data than single reports can analyse. "This is a sensible strategy as it ensures there is significant public scrutiny," Haines says.

"My hope is that the papers will provide a platform for a debate on the tax obligations businesses owe to sovereign countries."

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