Clark's door ajar for Tamihere

John Tamihere

Labour's leadership closed ranks around John Tamihere yesterday, declaring the first report into his financial affairs no impediment to his return to the Cabinet.

But Mr Tamihere did not escape criticism altogether and he still has the hurdle of a Serious Fraud Office report.

But the report, by Douglas White, QC, effectively clears him of any serious wrongdoing.

It suggests that some matters were for Inland Revenue to decide, but it is the Waipareira Trust, Mr Tamihere's former employer, that may be headed for trouble, rather than him.

The report concludes that Mr Tamihere was justified in believing his departure package from the trust of $195,000 was a payment net of tax. Tax was not paid and the trust has already accepted liability.

Prime Minister Helen Clark and Deputy Prime Minister Michael Cullen fronted a press conference in solidarity with Mr Tamihere.

"On the basis of this report," said Helen Clark in her office, "John has a very strong future because there was nothing in this report which would stop him continuing in Parliament and aspiring to come back into the Cabinet."

Her encouragement contrasted with her message on Monday that he should not expect to be in the Cabinet until after the next election, a message that upset and surprised Mr Tamihere.

Helen Clark said although Mr Tamihere had shown lapses in judgment over accepting a golden handshake from the trust, it was not a hanging offence and he was "serving time for that".

Not one serious allegation levelled against him by people who had wanted to destroy his career was upheld in the report.

"John has been to hell and back with these inquiries. He is serving his time. We'll talk again after the Serious Fraud Office report."

The most serious criticism of Mr Tamihere in the report was that it would have been wise for him to have declared his use of a vehicle given to him by a Waipareira Trust investment company on the ministerial register of assets and gifts.

Mr Tamihere's lawyers argued the car was not a gift but part of a remuneration package as a director of the Westland company, but even if it were, it had not been received as a minister.

Helen Clark said the register, a requirement under the Cabinet manual, needed to be clearer about what was and was not expected.

"It is important to uphold but it is not a hanging offence if something goes a little wrong."

Finance Minister Michael Cullen, who is also Minister for Revenue, said it had to be remembered that Mr Tamihere had gained no benefit from the non-declaration of the income.

Mr Tamihere, who is being advised by Business Roundtable chairman and tax specialist Rob McLeod, was confident there would not be an issue with Inland Revenue.

In a statement Mr Tamihere said: "I regret I am not perfect. I regret I have failed at times. But where is the crime to justify this hatchet job?"

Act leader Rodney Hide, who made many allegations against Mr Tamihere, said the report was written in "soft language" but that it was actually damning of Mr Tamihere.

The Government came down hard on taxpayers who did not declare income and did not pay their tax.

"There should be no exceptions just because John Tamihere was a minister."

Waipareira Trust chairman Eynon Delamere did not return calls.

White report

The report says John Tamihere's tax return for the year ended March 1999 was based on a taxation certificate from the Waipareira Trust which did not include the bonus payment of $25,000 for the year to June 1997 and which had been received by him in instalments in 1998.

Whether any action should be taken over that omission was for the Commissioner of Inland Revenue.

Mr Tamihere's income tax return for the year ended March 2001 did not include payments of $145,000 received during that year as part of the departure package because he believed it to have been derived in the previous year.