OPINION: A massive leak of documents from law firm Mossack Fonseca sheds light on a shadowy world of the rich hiding their money from prying eyes, tax evasion and money laundering by criminals.

For New Zealand to be caught up in it is, at face value, surprising. We are after all one of least corrupt countries in the world. Our rules and regulations are meant to reflect our moral fortitude – based on principles of fairness and transparency.

But these are not always the case. Perceptions can mislead. The corruption and rot that we have, all countries have them, are much subtler and white collar than the most blatantly corrupt countries.

Corruption here are often cases of nepotism, subtle use of loopholes in rules and regulations, low prosecution of white collar crimes and lenient penalties.

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New Zealand's role in the international scandal is real. Our offshore trusts have been used by those looking for anonymity, because if the beneficiaries and their incomes are offshore, there is no requirement for information disclosure.

By running money through various tax havens and vehicles like New Zealand trusts the ultimate beneficiaries are hidden, their tax liabilities avoided and very likely facilitate money laundering in some instances.

New Zealand doesn't demand a detailed and transparent register of these trusts because they wouldn't be paying tax in New Zealand anyway. So there is little threat to our tax base, but it would cost money to administer the register.

Our foreign trust rules are firmly in a moral grey zone. Our own citizens are unlikely to be much affected by them, but we have a moral duty to ensure our rules and regulations do not facilitate dishonest practices by others.

These New Zealand rules have been in place for some time. So it is not the fault of any one particular political party. But the immediate reaction from our Government that there is no problem, that we have been cleared by the OECD (we haven't) and that there is little need for change – is where the problem is.

Our politics is incremental and the knee-jerk reaction is to stop, stymie and discredit criticism and maintain the status quo.

There is a glaring absence of leadership when it comes to tackling issues that are difficult.

The reality is that we are soft on white collar crime and we aren't good at regularly updating our rules and regulations.

While New Zealand has a high criminal conviction rate, it is not clear that we are tough enough on white collar crime. Some of the finance company failures in the 2000s were due to repeat fraudsters. Yet they are out walking their dogs in posh suburbs in less time than is reasonable given the damage they cause.

Rules and regulation understandably take time to change. But the reality is that there is no 'finish line' when it comes to rules and regulations. The backdrop is always changing and very clever people are working hard to find ways to work around the rules all the time.

Rules and regulations can never be perfect. We have to take Kaizen approach to our regulatory approach – constant improvement.

It is no good pretending some moral high ground and aloofness from corruption as a country. The Panama files show that New Zealand is complicit in shady, dishonest and criminal behaviour.

Our reaction should be to urgently stop this from happening, not deny there is a problem. It is also a good time to reflect on our tolerance for white collar crime, demand continuous improvement from our public service and hold our politicians to a higher moral standard.

Shamubeel Eaqub is an independent economist and consultant. Follow him on Twitter @SEaqub