web analytics

Granny Herald: Cunliffe wrong to be right

Written By: - Date published: 8:35 am, April 2nd, 2013 - 19 comments
Categories: david cunliffe, tax - Tags:

Sometimes, I wonder where Granny Herald gets her crack from. It’s clearly strong stuff. Like when she runs an editorial soundly condemning an opposition MP for doing something that the same editorial admits is justified. Today, Cunliffe gets an earful for daring to suggest that IT multi-nationals are ripping us off. Granny says it happens because the law’s outdated and, from that, concludes Cunliffe needs to pull his head in. What about supporting updates to the law instead?

Companies should pay tax in the countries where they operate. Indeed, that is their responsibility. But the current international and domestic tax rules were created in a world of factories and farms, not that of e-commerce where companies can operate virtually with a limited physical presence. The source of the current problem is that international tax rules have not kept pace with this change. So it is hardly surprising that sophisticated multinationals have chosen to take advantage of the law as it is, not as it ideally might be. They have, for example, become expert in shifting profits between their firms based in different countries.

So, Granny reckons that multi-nats are exploiting loopholes in the law to avoid their tax responsibilities.

None of this is illegal.

Um, no-one said it was. That’s the thing about loopholes – they’re legal but unjust.

But that has not deterred populist politicians.

Politicians seeking to redress flaws in the law? Whoever heard of such a thing?!? The opportunistic scoundrel. It’s almost like we purposely created a political system whereby politicians would be incentivised to point out problems and offer solutions to fixing them in the hope that they would win support, and then some crazy bastard went and did exactly that.

Multinationals like Facebook, Starbucks and Google have all faced similar criticism, not least in Britain and Australia, for structuring their global businesses to minimise tax payments. This has prompted the OECD to call for a worldwide crackdown on such behaviour. But it knows, as surely does Mr Cunliffe, that the situation is about far more than simplistic accusations.

Granny does realise that a politician can depend on getting about 25 words into a story that they break, eh? All he’s got the media space to do is point out the basic wrong and say it can be fixed. Granny wants to hear a detailed discussion of multi-national tax law from David Cunliffe? Hmm…. if only Granny had some forum for that kind of thing – why not invite him to write an op-ed?

The editorial then does an about face and says there might not be any tax avoidance taking place because maybe the IT giants aren’t earning much money here

That situation would change only if Facebook, for example, employed a lot of people in New Zealand and gained large sums from local advertisers, offsetting that by payments for services of debatable value to their parent or sibling companies. But that does not appear to be the case

Um. Granny who fucken stoner. That was precisely Cunliffe’s point. Apple and the rest are making shitloads of money here and paying bugger all tax (yes, we tax profits, not revenue but if you’re only paying 0.4% of revenue in tax, that suggests you’re making $1.2 in profits for every $100 of sales – and we know IT companies are much more profitable than that).

Come on, Granny. There’s standing up for the interest of the capitalist elite like you always do, and then there’s making a fool of yourself in your own editorial page. Get it together.

Or, maybe, I’m being too harsh. Maybe Granny is doing her job for New Zealand’s capitalist elite – as she did last week in a similarly nonsensical editorial attacking Russel Norman for being right: identifying threats from the Left and whacking them with whatever she can, however incoherent that might be.

19 comments on “Granny Herald: Cunliffe wrong to be right ”

  1. Descendant Of Sssmith 1

    One of the reasons I would tax business at a gross rate same as employees.

    It wouldn’t be difficult to apply to all electronic purchases cause you are not having to piss around with expenses and profit.

    Leave those aspects between the company and the owners / shareholders.

    You sell goods in NZ you pay tax in NZ.

  2. Socialist Paddy 2

    What the? Politicians should pull their head in and accept the law the way it is even though it allows multinationals to rip us off and not pay tax for the privilege of doing so? I guess it is not as if members of Parliament can do stuff like change the law … ooh wait …

    It is also not as if Apple’s margins are tight. I hear they make about a third in instant profit every time they sell an iPod.

    And I agree with you Eddie about the Herald having a whack at politicians like Cunliffe and Norman. They are obviously seen to be threats and need to be taken down at any chance by that mouthpiece of the rich and powerful.

  3. logie97 3

    Words from the article attacking Cunliffe.
    opportunist, simplistic, populist (x2), outburst – methinks this editorial is written by someone fearful of Cunliffe.

    • Draco T Bastard 3.1

      Pretty much any dyed in blue National supporter then.

    • Joe Bloggs 3.2

      oooops spot the typo…

      here I’ll correct it for you:

      opportunist, simplistic, populist (x2), outburst – methinks this editorial is written by someone dismissive of Cunliffe and his crackpot outburst.

  4. DH 4

    It is a rather strangely confused & contradictory piece. This bit here is odd….

    “The activities of technology companies could, therefore, be likened to exporters of goods who traded with New Zealand, rather than in New Zealand.”

    If Google & Apple etc were selling direct to the consumer from overseas that argument might have some merit. But if that were the case they’d pay no tax at all in NZ and they do pay tax so they must be domiciled and can’t be likened to exporters. A local NZ company should be paying tax commensurate with the profit that their turnover could be reasonably expected to generate.

    A comparison can be made with the likes of McDonalds. Their overseas head office charges royalties too but since they franchise their outlets to local NZ operators the royalties have be low enough for the businesses to make an NZ sized profit. No-one complains about McDs because the franchises do pay a reasonable amount of tax here.

    Seems more like an opportunistic dig at Cunliffe than a reasoned editorial.

  5. Ad 5

    We really are a country ruled by just a handful of companies, and we really are being driven into the dirt face down because we have so few unions to protect us from anything. If Key could stick up for regions and workers like he sticks up for multinationals and bails them out, we would actually feel prouder living here.

    Good God if Labour could allow Cunliffe to stick up for the great unwashed masses as well, by kicking the multinationals hard and often. The last guy to understand that patriotism and protection and economic management can be coherent in one sentence was … Winston Peters. And that 6% never seems to go to Labour, though it could. And so we have a 2014 scenario that requires the Patron Saint of populism to work.

    The Herald is in a panic of course as its owners keen stripping profits from within New Zealand to prop up a dying media empire. Mere self interest from overseas owners.

    Can’t even remember the last time the NZHerald attacked a Labour MP on a straight policy issue like this. Go hard at them Cunliffe.

  6. saarbo 6

    “Come on, Granny. There’s standing up for the interest of the capitalist elite like you always do, and then there’s making a fool of yourself in your own editorial page. Get it together”

    I’m glad you have posted this, I couldnt understand where the hell the NZ Herald was coming from here…weird. Clearly they have lost the plot.

    There is an absolute case for taxing their profits in NZ, with a company like Apple selling Itunes, I suspect Revenue in NZ almost = Profits in NZ. Tax the lot…change the laws to make it happen …is it Transfer Pricing or something like that…make it happen.

  7. Elizabeth Bourchier 7

    Apple has US$100BILLION in cash outside of the USA.
    This is profit from its overseas operations.
    It paid damn all TAX in the overseas territories and defers taking the cash into the USA to defer paying TAX there also.

    Cunliffe is on the money.

    I’m delighted the Herald is slagging him.
    Cunliffe should wear it like a badge of honour.

  8. BillODrees 8

    There are 40 comments on the Herald editorial nearly all supporting Cunliffe and taking the piss out of the Herald.

    Wow, someone up there sees Cunliffe as a threat to current consensus.

    Welcome back from the backbenches David.

  9. xtasy 9

    What is this by “Granny Herald”? Plain tall poppy hatred! When a smart politician comes and says something, especially from a quarter the right leaning editors, cosy with Key and gang, hate, then it gets shot down instantly.

    That is still NZ, the good ol, of sorts, but they shoot too much into their own foots, that is the damned problem.

    I give Cunliffe credit for having travelled Scandinavian countries last year, to learn and see how things can be done better, to combine good business, and enterprising practice, with social conscience and practice.

    Now that is what Key and consorts HATE.

    They adhere to right wing, old fashioned anglo saxon hate economics, divide and rule tactics and the likes, so no wonder their editorial mates in the media (and they are everywhere, I am considering to collate info on this, suggestion to Karol also) are joining forces yet again to “defend” the “brand Key””. NZ is run like a kind of soft dictatorship now, as National has put so many key personnel in key positions in government, media and business cooperation now.

    No wonder we get the “news” that we get fed every night and day.


  10. tracey 10

    Remember when the right wing bloggers were urging labour to appoint shearer not cunliffe? God they must laugh at how easy it all is.

Recent Comments

Recent Posts

  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    3 weeks ago