Paying your fair share.
Thank God needs-must pragmatism trumped rigid ideology, in the interests of the ratepayers’ pocket. Congratulations to the eight city councillors who voted in favour of expanding the asset sales programme to $750 million. But we are going to need more of this. Mauling the ratepayer with a 33% rates increase over four years is grotesque and unacceptable. Ilam MP, Gerry Brownlee has rightly denounced it. The city council should razor-gang its baseline and expand user-pays. Just as every resident should pay their fair and full share for council services, wouldn’t it be nice if the fattest corporate cats coughed up their fair share of tax? It’s all very well for the likes of Google to ingratiate themselves on Canterbury with gimmicky charm offensives like Project Loon. But how about behaving like a responsible corporate citizen and paying a respectable slice of tax on New Zealand earnings? Ditto for Amazon, Microsoft, Facebook and Apple who have all cynically perfected the dark art of international tax avoidance. Did you know Apple’s shell subsidiary unit in New Zealand recently posted a 38% jump in annual earnings to $571 million? Yet, taxes paid to Inland Revenue totalled just 0.4% of that. I sought political comment on whether New Zealand is making sufficient strides to combat the unremitting greed of the digital economy’s global giants. The Finance Minister’s office directed Inland Revenue to fashion the response, in which they state that New Zealand is actively contributing to the OECD’s ongoing work on how to achieve fairer outcomes. The OECD’s two year plan aims to ensure all multinationals pay tax on all their profits somewhere, and the elimination of rorts to syphon profits to tax havens. Similarly, the government is awaiting the OECD’s plan on combating erosion to the tax base from online retail. Labour’s Finance spokesman, Grant Robertson, reaffirms his party’s upcoming tax review will have multinational and online retail tax avoidance firmly in its sights. Robertson points out that the multinationals’ corrosive behaviour simply leads Joe Blow to wonder, “if they don’t play by the rules, why should I?” Like Inland Revenue, Grant Robertson concurs that he doesn’t believe the TPPA will hinder New Zealand’s ability to shape and enforce its own taxation rules. But should we really wait for the OECD to finish its work? Britain isn’t. Prime Minister David Cameron, arguably the most impressive world leader, is imposing 25% tax on “diverted profits”, from next month. Nicknamed the “Google Tax”, Britain is leading the fight back over aggressive avoidance by multinationals. New Zealand should be a fast follower.
Mike’s weekly current affairs column, as first published in The Press. March 3. http://www.press.co.nz