Analysis: Spark boss accuses Google of 'despicable behaviour'
Sorry, don't want to foist a story-based-on a tweet on NBR readers but I couldn't help but highlight Spark boss Simon Moutter's post on Twitter last night.
"Despicable behaviour – posting $10m revenue despite generating $67m annual ad revenue in NZ to offshore entity."
The $67 million is the estimate of Google's ad revenue booked in New Zealand in the Fairfax-NZME merger application – and the pair's figures seem in line with estimates by the IAB and others.
However, social media consultant Louis van Wyk hit back with a couple of good jabs, tweeting to NBR:
"So will Moutter put his money where his mouth is? Will Spark avoid Google ads in favour of supporting local media?"
"Spark spends a lot on Facebook too. How much tax did Facebook pay in NZ?" [Answer: very little].
Mr van Wyk makes a good point. NBR has asked the Spark boss if he thinks his company should stop promoting itself through Google and Facebook ads, thereby helping to line the pockets of these profit-shifters.
Don't hold your breath for a boycott. Google and Facebook command a huge share of New Zealander's online attention. Spark would be cutting off its nose to spite its face.
Mr Moutter has previously called on the government to move faster on revenue and profit-shifting by multinationals (and, elsewhere noted that Google and other tech companies are now competitors to Spark with their "over-the-top" voice and video-conferencing services). Australia and the UK have introduced so-called "Google tax" measures against such behaviour. The Spark boss says doing the same here would level the playing field. Revenue Minister Michael Woodhouse says a process is in train in alignment with an OECD initiative that could see tighter rules from July 2017.
With the separate investigation into offshore trusts wrapping up early, Mr Woodhouse might want to turn his attention to Mr Moutter's favourite topic (and remember, the Spark boss was part of the lobby that successfully pushed for the so-called "Netflix tax" or the new provision for offshore providers of online services to charge GST).
An overwhelming majority of NBR readers agree with Mr Moutter.
However, NBR economics editor Rob Hosking is wary of policy being driven by "moral panic".
A Google spokeperson told NBR earlier this month: “Google complies with the law in every country where we operate. We believe international forums like the OECD are the right places to decide tax rules for multinational businesses because everyone would benefit from a simpler and more transparent system. Google’s average global corporate tax rate in recent years is around 19%, and we incurred taxes of more than US$3.3 billion in 2015."