Politics of the first resort

I wish I could say that I find the reaction of this politician surprising.

Google has refused to explain why it paid just $74,176 in Australian tax last year, despite making an estimated $1 billion in revenue from the Australian market.

The opposition communications spokesman, Malcolm Turnbull, said yesterday the growing digital economy was creating headaches for lawmakers. He said corporate giants like Google were able to generate billions in revenue within Australia, ”much of it at the expense of local media outlets”, but pay minimal tax by creating subsidiary offices in low-taxing foreign jurisdictions.

For readers outside Australia note that this is the opposition communications spokesman here – Malcolm Turnbull is a member of, and has even been the leader of, what persists in calling itself the Liberal Party in the absence of any real interest in liberty that I can see. To answer the implied question, it’s called the global marketplace, Malc, and this is no more than an indication that Australia’s tax regime is sadly uncompetitive. Instead of getting your cock in a knot about the relatively small dollar amounts of tax that Google and Facebook pay here why not consider why it is that these companies do not choose to pay the bulk of their tax in Australia. I’m guessing that it’s something to do with them preferring to pay tax at 15% in the Irish Republic than pay at 30% here.

Now it strikes me that we could piss and moan about it, we could talk about changing the tax laws and generally fight like hell to avoid doing anything as simple as matching or beating the Irish on tax rates and the general desirability of running large parts of an international business here. We could do that… Or we could start by just looking at the dollar value Google paid the Irish taxman at Irish rates. Because if it’s more than $74,176 – and I reckon it will be substantially more – it would seem to suggest that you’d get more out of them by making Australia a more tempting place to pay tax than Ireland.

You see, Malc, and it really pains me to have to explain this to a member of a party whose website says (my bold):

We believe…

* In … a lean government that minimises interference in our daily lives; and maximises individual and private sector initiative
* In government that nurtures and encourages its citizens through incentive, rather than putting limits on people through the punishing disincentives of burdensome taxes and the stifling structures of Labor’s corporate state and bureaucratic red tape.
* In … the encouragement and facilitation of wealth so that all may enjoy the highest possible standards of living, health, education and social justice.

In short, we simply believe in individual freedom and free enterprise…

You see, Malcolm, if taxes are a necessary evil then in this modern world where companies can establish their operations wherever it’s most profitable nations are in competition for taxpayers, and the more successful governments in that competition may not be the ones that take the biggest slice of their GDP pie but the ones who realise that a smaller slice of a much larger pie is actually a greater quantity of pie. The Australian Tax Office, and it seems both main parties in Canberra if Malcolm Turnbull’s an indication, are more concerned with the size of the government’s slice than the size of the pie, and as long as that holds I expect Google, Farcebook and others will continue to choose countries such as Ireland as their preferred nations in which to pay much of their taxes.

Not just the UK where the main political parties are largely alike. Why is being competitive the last resort even of a nominally liberal politician?

Posted on May 27, 2012, in Uncategorized and tagged , , , . Bookmark the permalink. 2 Comments.

  1. W-e-e-el-l-l, Gillard’s about to go down the gurgler so it might be yon Turnbull in charge.

    • Not that that excites me really, but in fact it’s worse anyway because the Coalition is currently led by Tony Abbot, whose main function appears to be to make Julia Gillard look not quite so bad after all.

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