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‘Atlases’ don’t deserve a tax cut

Written By: - Date published: 9:47 am, February 24th, 2010 - 60 comments
Categories: business, capitalism, tax, telecommunications - Tags: , , , , ,

This man is Paul Reynolds, CEO of Telecom. He has overseen the largest corporate disaster in recent New Zealand history. Hundreds of thousands of Kiwis and businesses placed their faith in Telecom’s XT network and it has been an abysmal failure. Apart from the widespread outages you hear about there are mini-outages all the time – calls dropped, calls not getting through.

Reynolds became CEO in 2007 and continued the process of outsourcing all the actual stuff Telecom does, leaving just a hollow brand and poor quality service that is dragging us behind the rest of the world. During Reynold’s time at the top, Telecom’s shares have lost half their value – about $4.5 billion. A lot of that is owned by foreigners but many of the ‘Kiwi mum and dad investors’ National always claims to stand for have lost out too.

The minister, Steven Joyce, claims he is powerless to intervene to correct the manifest failures of Reynolds and his organisation that are costing the country millions.

Instead, they are planning to give him over $6,600 a week in tax cuts. About $350,000 a year.

Yup, apparently this screw up on a $7 million salary is the kind of guy New Zealand needs. If we are to avoid him, heaven forbid, leaving our shores and screwing up someone else’s telecommunications system, we have to bribe him with a tax cut 12 times the median income of New Zealanders.

It’s not just Reynolds. New Zealand’s entire capitalist class, the self-proclaimed ‘wealth creators’, the Atlases who think they carry the rest of us, are a bunch of muppets. When John Key got a few hundred of them together for a the Jobs Summit, the best ideas they could come up with were a cycleway and a stripped down version of the unions’ 9-day fortnight. Such is the intellectual rigour of these purported ‘smartest men in the room’ that ex-Telecom head Peter Shirtcliffe is going around claiming, with not a hint of evidence, that abandoning MMP would boost growth, and the premier business newspaper, the NBR, prints his views uncritically.

I have got an idea. How about instead of giving Reynolds and his blathering mates in the capitalist class yet more money they don’t need we keep GST where it is and don’t make it harder for working families to feed their kids. How about that?

60 comments on “‘Atlases’ don’t deserve a tax cut”

  1. vto 1

    Your post mr marty is like a left wing version of a sensible sentencing trust rant, just thrown at a different segment of society. Ranting based on the actions of the extremes. Lock em all up and throw away the key. They deserve nuffink! Bastards..

  2. Bright Red 2

    I don’t see marty saying they deserve nothing. I see him saying they don’t deserve thousands of dollars a week in tax cuts.

    Do you think Paul Reynolds deserves $6600 a week in tax cuts?

    Do you think that will be good for the eocnomy?

    Do you think that is an appropriate thing for the government to do with its tax revenue while 20% of kids live in poverty?

    • vto 2.1

      how many kids do you personally know living in poverty bright red?

      • pollywog 2.1.1

        not to a shit on your doorstep bro, but i could probably count on one hand kids i know personally who don’t…

      • DeeDub 2.1.2

        How is that even relevant, vto? Are you suggesting that, unless you have or have had personal contact with ‘poor kids’, you have no right to an opinion on the subject?

        Or are you suggesting that, because someone does not come into contact with ‘poor kids’ in their daily life, the poverty doesn’t exist?

      • Sam 2.1.3

        So was your 15th birthday recently or what?

      • vto 2.1.4

        I just dont believe that 1 in 5 children in NZ live in poverty.

        • Bright Red 2.1.4.1

          Oh well, if vto doesn’t believe it, it mustn’t be true. How foolish of us to rely on the statistics when we’ve got vto’s gut.

          Vto. All you’re exhibiting is more of the right’s blindness to the poor. Cover your shame.

        • HitchensFan 2.1.4.2

          vto @11.15am “I just dont [sic] believe that 1 in 5 children in NZ live in poverty.”

          Yep. Therein lies the rub. The Nats: Denial, heads in the sand, $70 000 is not a high salary.

          God, they make me sick.

          • vto 2.1.4.2.1

            well hitchensfan $70,000 is not a high salary. it may be higher than those who earn less than $70,000 of course. duh.

            why is there such a difference between people in the understanding of the world and its ways? I mean, you fullas sound loopy sometimes yet I sound loopy to you no doubt. But I aint loopy which means you must be.

            • Lew 2.1.4.2.1.1

              Depends on whether you view “high” as a normative or an absolute bound. As an absolute bound, I agree it’s not “high”. You can’t buy a luxury yacht with it, and depending on where you live you might still have trouble meeting your mortgage payments or buying your kids’ school uniforms. But viewed normatively, this is more than 90% of workers earn. Within an economy, normative calculations are what matters.

              L

            • Pascal's bookie 2.1.4.2.1.2

              That death valley place in Nevada? Not hot actually. And neither is the antartic cold. Not really, not when you look at the universe.

              Still. Pays to dress accordingly and shit.

            • HitchensFan 2.1.4.2.1.3

              You just proved my point about denial and head in the sand, VTO.

              Average wage in NZ is about $45,000 as I understand it. That’s AVERAGE. Get it?

              To a person on $45,000 or less, $70,000 is one hell of a high salary.

              Get in the real world, mate. Not the world of your NACT cronies.

        • Zepher 2.1.4.3

          Guess belief can just replace established fact then.

          Anti-spam: Established

      • Bright Red 2.1.5

        Huh?

      • Draco T Bastard 2.1.6

        What’s that got to do with the price of fish?

        One of the reasons for living in a society is that the society, as it’s far more productive than an individual, can ensure that none of it’s people are living in poverty. In fact, it’s one of the main benefits of living in a society. Of course, NACT+MP need to ensure there are more people living in poverty so that they can have even more of the wealth created by that society. It’s why JK said he wanted “wages to drop”.

        I just dont believe that 1 in 5 children in NZ live in poverty.

        Denying reality again.

        • vto 2.1.6.1

          Aint no denial of reality.

          I would suggest that those who believe 1 in 5 children live in poverty in NZ are the ones living in la-la land.

          Whats your definition of poverty? The bottom 20% of society or some such foolishness? Get a grip people …

          • Lew 2.1.6.1.1

            vto, do you mean to say that you know better than those agencies whose job it is (and whose qualifications are selected for) defining poverty? Please do explain!

            I see a Four Yorkshiremen moment coming on …

            L

            • vto 2.1.6.1.1.1

              so what is it?

            • vto 2.1.6.1.1.2

              further Lew, if that is the definition of poverty, namely bottom 20%, then that definition bears little resemblance to most people’s understanding of the meaning of poverty and it would be prudent to describe that bottom 20% as something other than poverty.

              • Lew

                That debate is between you and BR. I’m pretty sure he can substantiate it if you ask him nicely. If not, I’ll withdraw and apologise.

                But just another thing: “most people’s understanding of the meaning of poverty” isn’t a useful referent. To most people, it means starving children in Somalia. If you want that standard to apply to New Zealand, then make your case. Good luck.

                L

              • vto

                “To most people (poverty) means starving children in Somalia”

                That’s right.

                If poverty does in fact mean poverty relative to your neighbour then it is not so much of a concern is it. I mean, that would mean that ‘poverty’ in fact has nothing to do with going without food, or clothes, etc, and has everything to do with the size of your plasma tv.

                So then who cares about poverty? It is only about keeping up with the joneses … whoop de do …

            • vto 2.1.6.1.1.3

              poverty: the condition of being without adequate food, money, etc.

              I guess that could apply to even the rich in hard times eh? I mean ‘adequate’ for what? Adequate to have a lifestyle previously had? Adequate to keep up with the joneses?

              Or is it in fact referring to ‘adequate’ to survive!?

              • Zorr

                Adequate to provide your children with sufficient shelter, food, water and clothing. There are other things that I could throw in there that are “good to have” but not “absolutely essential”. If you bothered to actually engage brain you would realise that other people have more experience in this matter than you.

                For my own personal experience, I have grown up in a family of teachers and married in to a family of public service people (civic engineers and police mostly). The school I grew up around as a child was not in a “poor” area but there were a large number of families where the children shared bedding on the floor, had no breakfast and dinner was weetbix. I don’t know about you but I consider that a miserable existence and I think that you would be hard pressed to see that as not poverty AND not be a heartless bastard.

                So which is it? Believe the experts and agree that, at least, a sufficient number of our children are living in undesirable conditions of poverty for it to be considered a serious problem? Or just admit, right here and now, that you are a heartless bastard who should be ignored for the betterment of all the rest of us?

              • vto

                why do you consider me heartless zorr?

                All I have done is question the claim that 1 in 5 children in NZ live in “poverty”. Nobody has come up with a definition of any sort for poverty in the context of this claim. All you lot have done is call me names and ignore my points.

                At no point above did I express any lack of heart for people who are starving or sleeping cold tonight. You need to check yourself lad. Slow yourself up and stop jumping to conclusions.

                If you in fact engaged your own brain you could read my posts above and try to answer them.

                If “poverty” means going without adequate food and shelter to be fed and sleep warm then I simply do not believe that 1 in 5 children in NZ live in that manner. You can go and assume I have no experience in that all you like, but you have no clue. That is my summation based on too many decades in these islands living in near every type of community.

                However, if “poverty” means the bottom 20% of NZ society then I have little regard for that statistic because it makes poverty a relative measure that has absolutely nothing to do with going without adequate food and shelter. Plus, obviously stupidly, there will always be a bottom 20% so what’s the point?

                All those who berated me above have let themselves down. Pretty poor showing. Perhaps it is another case of that classic left attribute – too much intellect and not enough brains…

  3. tc 3

    Joyce is such a lazy prick, the fact that 111 calls can’t be made seems to be of no concern to him and this line he runs about it being a private company under the NACT model can extend to any private provider of essential services such as Water, power etc so you can see where this is going.

    Easy PR points and an opportunity to look like you are on the consumers side available but oh no we don’t give an F…..like Basher Bennett at least make an effort to appear like you care Joyce.

  4. I dont get why this Reynolds fella is worth 7 mil a year ? Should cap his, and all other, fatcat asses at 250k a year or at least tax the fuck out of it.

    …and for what its worth we knew when we were installing the XT network it would probaly fail for the simple reason that we barely knew what we were doing but were in a hell of a rush to do it anyway…sound familiar ?

  5. As vto says, this is the dog whistling extreme straw man BS that the right is accused of.

    The beneficiary rorting the system in Chch with his swimming pool costs comes to mind. Not typical says the left.

    So how they hell is this guy typical or representative of the tax cuts?

    How about the left addresses the issues for a change rather than the emotional arguments we continue to see. A starter would be acknowledging the damage Labour’s incoherent tax plans wrought on the economy but it would appear that you’d rather play the politics of personality than consider a logical sensible tax structure that benefits NZ as a whole.

    • Lew 5.1

      The difference is that the left isn’t defending the Christchurch pool-owning white-power benefit scamsters. They were singled out in a speech by the leader of the opposition. Let’s see Joyce or Key criticise Reynolds for singularly failing to successfully implement what is, elsewhere in the world, a fairly standard and well-understood infrastructure system.

      L

  6. I think you’re missing my point Lew. Creating an argument based on extreme examples is hardly compelling. Frankly, I think Reynolds is paid an obscene amount of money and it certainly isn’t performance based. But to use Reynolds as a justification for arguing against the tax cuts is no better than arguing the Swimming Pool Man shows that our social welfare system is failing.

    • Lew 6.1

      Daveski, I agree, on a rational policy basis. But this is politics.

      With respect, you (and me, and people like us who look at the evidence and think about it in context) aren’t the target audience here. We have plenty of information and time/other resources to process that information with a significant degree of rationality. Given that the target audience doesn’t, sketched-out arguments which rest on extreme examples work just fine. Not that they’re fools, they’re just very time and resource-poor when it comes to politics, and they rely on low-information rationality to decide which position (if any) to take. So the more evocative, iconic and archetypal the examples, the better. Give them those and they can fill in the blanks for themselves.

      L

      • Brett 6.1.1

        So this blog is about spraying as much extreme anti national BS on to the internet as possible in hope that Joe or Joanne average might stumble across it and due to there ignorance and lack of resources, will take what is written as truth and hopefully become a Labour/Greens voter?

        • Lew 6.1.1.1

          Brett, I think the blog’s raison d’etre is well-documented in the ‘about’ section above.

          L

        • HitchensFan 6.1.1.2

          So what’s your point Brett? Do you accuse Kiwiblog of the same thing with its “anti Labour and Greens BS?”

          Bet you don’t.

          • Brett 6.1.1.2.1

            To be honest this is about the only political blog I read, far more interesting than Kiwiblog. Reading David Farrer fawning all over John Key is pretty dull stuff.
            I just thought Lew’s comment to Danyl rather undersold the contributions of The Standards authors .

            • HitchensFan 6.1.1.2.1.1

              Brett, okay. I take my comment back. Pleased to hear we share the same dislike of David Farrar’s brown nosing :)

  7. How about we don’t base crucial decisions about the political economy on one guy.

  8. tc 8

    Reynolds has the best job in NZ…..inherit a rundown broken non customer focused telco and apply a lick of paint (new logo) and launch a network already chosen and underway before you signed up….all care no responsibility….sound familiar.

    He’ll continue to get bonuses regardless of outages as he’s a smart man so his contract wouldn’t include any outages impacting his dosh….and he’ll shuffle off back to the motherland after his retirement funds topped up enough.

    Telecom was fundamentally broken by Deane/Gattung and co failing to invest in anything other than anti competitive tactics rather than technology/process…..Cunliffe had no end of crap to wade through on separation which joyce keeps extending for them as it’s still not done……again Joyce is pissweak where it matters.

    nice work if ya canna handle the media laddie………aye dina worry about it man ..kaching !

  9. Draco T Bastard 9

    He has overseen the largest corporate disaster in recent New Zealand history.

    In regards to Telecom, the disaster happened when we deregulated and sold it off. This is proven by the simple fact that the government has been pouring millions of dollars into telecommunications ever since. Like a hurricane it’s just been gathering force since but unlike a hurricane we can do something about it. Neither Labour nor National seem willing to do so and the longer we leave it the more it will cost us.

    It really is time to bring telecommunications back into state ownership.

  10. SHG 10

    I actually feel a little bit sorry for Reynolds. Deane and Gattung gutted Telecom for over a decade, and he happens to be on duty when the shit really starts hitting the fan.

    Still, given his salary, it is a very very little bit.

    Put it this way – I’m not labelling Obama the WORSTEST PRESIDENT EVAR!!1 because of Republican chickens coming home to roost during Obama’s first year.

    • Lanthanide 10.1

      Pity the American public don’t seem to grasp it. There seemed to be this idea that when Obama was elected all the problems would go away, or he would solve them with his Hope rhetoric somehow. So now they’re getting the democrat backlash, getting ready for the mid-terms for a swing back to the republicans. The best they’re likely to get, though, is a government that can’t do anything at all, so the problem just gets kicked down the road further.

  11. john 11

    The wealth of New Zealand comes from the natural wealth of our land and the productive ability of all New Zealand people. If all these “irreplaceable rich corporate types” left NZ because they’re not getting paid the equivalent of whereever, NZ would quickly recover from the pool of ordinary capable NZers. I too am getting this propaganda that NZ would be down the tubes without these vastly overpaid corporate types: absolute rubbish! The ‘corporate elite’ here believe that no matter what happens their vastly over fat salaries must keep growing year by year and if necessary this means transferring wealth from poorer to the already rich. E.G. Don Brash wanting to lower the minimum wage! The current increase in GST level and tax cuts for the top. No one is indispensable.

  12. Feel sorry for Reynolds, you have got to be joking. I’ve listened to all the bullshit that is coming out of Telecom in the last few days and it is just that, bullshit.
    Telecom knows exactly what is wrong, Lack of capacity in Christchurch. Why does a system overload? lack of capacity and Telecom knew this right from the start.
    You might be able to blame Gauting & co but Reynolds & Co have known this is the problem for months and have done nothing to fix it. Profits before infrastructure, nothing more nothing less.
    Reynolds and the board of Telecom should resign of be sacked. They are totally incompetent and dishonest and Reynolds’ is not worth $7 dollars much less $7 Million dollars.\While i don’t necessarily think that the government can always do better, i would suggest that the Govt should Nationalize Telecom and sort there shit out.

    • Lanthanide 12.1

      My uncle, who is extremely technically skilled in the telecommunications industry, says the problem is that they went with Alcatel, who sell cheap junk, and designed a bare-minimum network for the cheapest they could get away with.

      The problem is, they ended up on the wrong side of ‘bare-minimum’.

      • kaplan 12.1.1

        This is true. Reynolds though also needs to take the blame for presiding over Alcatel’s selection as preferred supplier when anyone with half a modicum of sense should have seen that dropping their pants as far as Alcatel had to win a contract was going to lead to shortcuts in delivery.
        20-20 hindsight? Maybe… but I thought these guys were paid the big bucks cos they is good at this bizness stuff…

  13. tsmithfield 13

    So, you’re not happy for the telco exec to get a tax cut. Fair enough. But what about the many important occupations where the “wealthy” are being constantly tempted overseas by higher wages etc (e.g. doctors, medical specialists etc). Do you think it might be a good idea to give them a tax cut?

  14. the sprout 14

    Reynolds needs to go.

    Like Key, Reynolds also proves there is clearly no correlation between income and performance, or income and accountability.

  15. Olwyn 15

    A question that arises from this discussion is not so much why are some people getting 12x the average wage in tax cuts, as why are people in a small, struggling country getting so much pay in the first place? To begin with, in a larger, more vibrant economy, you have to get over far more hurdles to get to the top of your game and are surrounded by clever people keen to unhorse you once you are there. Hence one wonders whether similar job descriptions really amount to equivalency. Secondly, as either Marty of Pascal’s Bookie has already shown, at the top end of wages we have already caught up with Australia, it is at the lower end that we lag behind. Thirdly, this story that keeps being repeated about 10% of the people paying 70% of the tax comes about because we have so many low-paid people: you pay a smaller percentage of the total tax in other places because in at least some of those places you pay workers more, and they in turn contribute more to the tax pool. Finally, Telecom is not a business that has successfully provided the world with work-boots, sails, or lipstick even, and in the position to rest on its laurels; it is an ex state-owned network that has been privatised.

    • the sprout 15.1

      Well said Olwyn.
      And indeed Telecom, as Gattung famously admitted in her swansong address, has made a point of propagating and exploiting it’s customers ignorance for profit.

      Hooray for privatization!
      Such efficiency! Such accountability! Such a positive effect on the community and economy!
      Three cheers for selling national assets to private corporations

  16. Kevin Welsh 16

    The funny thing is, is that it doesn’t matter how well or how poorly Reynolds performs. He is in the managerial “Boys’ Club” and if they decide to arse him out, after he receives his golden handshake, the next multi squillion dollar a year salary awaits in corporateland.

  17. if its broken - fix it 17

    yes i have posted this before but,
    the only FAIR solution to tax cuts is to remove all tax off the first $9000 earned, by everyone and anyone. The first $9000 in any income bracket, goes directly to living costs and is spent immediately in the daily economy.

    It won’t happen of course, because the greed of high income earners has no awareness of the hardship that hundreds of thousands of New Zealanders struggle with every day

  18. Nick C 18

    Marty has clearly missed the point. With such a high top tax rate all the top CEO’s choose to move overseas where their net income is a lot higher. Thats why we have to employ people like Paul Reynolds to run major companies.

    • Bright Red 18.1

      Someone on $7 million pays more tax in Aussue than here. 45% rate kicks in at $150K or so.

      In fact, most countries have a higher top tax rate than us, so on that kind of salary NZ is a low-tax place to live.

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