Why Corporate Welfare MUST Stop
In a robust and honest way, Rod Drury from Xero, NZX and Pacific Fibre has done us all a huge favour in explaining precisely why it is always NOT okay to give money to otherwise successful corporates. Such honesty is to be applauded. I cannot explain to left-wingers why we should give welfare to those most successful in life. Because there is never an excuse. Let alone one where it is alleged from the operation of that business that he is now worth $72 million.
To which I replied
But the money response from Drury is below.
So here we have a man who has creamed $4 million in corporate welfare raise his best argument in receiving it - everyone else does and it is their "responsibility" to take it.
He then attacks me with an emoticon attached for wanting the paltry odd $150k that a backbench MP earns. I scored $150k NZD pa equivalent the day I left New Zealand in 2004 as a 28 year old. Earning $150k a year turns me on about as much as watching re-runs of Helen Clark's maiden speech as I am force-fed Lindauer Rose.
Rod Drury like all CEO's and shareholders listed for the most recent example of entitlitis, runs a business for shareholders. The New Zealand taxpayer is not a shareholder in his business. They are not the largest beneficiary of his business succeeding. Sure, jobs are created but $4 million to create jobs? Come on!
$50 million was recently lauded as New Tech Development Grants by one of National's laziest Ministers, Wayne Mapp.
I ask how many grants were applied for simply because everyone was getting them?
These New Tech Development Grants are a bunch of touchy feely ballocks. Their benefits are intangible. These companies should stand or fall without the taxpayer needing to borrow even more money to fund their welfare.
$321 million is being tipped down this new-age hole. Because you know, everyone's doing it.....$321 million to create jobs? Come on.
Thank God Rod Drury, worth an alleged $72 million is honest enough to just come out and say so.
He then attacks me with an emoticon attached for wanting the paltry odd $150k that a backbench MP earns. I scored $150k NZD pa equivalent the day I left New Zealand in 2004 as a 28 year old. Earning $150k a year turns me on about as much as watching re-runs of Helen Clark's maiden speech as I am force-fed Lindauer Rose.
Rod Drury like all CEO's and shareholders listed for the most recent example of entitlitis, runs a business for shareholders. The New Zealand taxpayer is not a shareholder in his business. They are not the largest beneficiary of his business succeeding. Sure, jobs are created but $4 million to create jobs? Come on!
$50 million was recently lauded as New Tech Development Grants by one of National's laziest Ministers, Wayne Mapp.
I ask how many grants were applied for simply because everyone was getting them?
These New Tech Development Grants are a bunch of touchy feely ballocks. Their benefits are intangible. These companies should stand or fall without the taxpayer needing to borrow even more money to fund their welfare.
$321 million is being tipped down this new-age hole. Because you know, everyone's doing it.....$321 million to create jobs? Come on.
Thank God Rod Drury, worth an alleged $72 million is honest enough to just come out and say so.
posted by Cactus Kate at 12:14 AM
18 Comments:
Would they feature it in business ethics courses do you think?
The government of the day picks select businesses it would like a photo op with in return for some grant money.
I guess businesses are on the take though because they have lost the guts to stand up and argue for a flat 10% business tax rate. After all we need to compete globally and attract business to NZ.
Better to have a business here paying 10% and get some tax, rather than not having them and get 30% of nothing. (As cliche as it is)
Drury is right about one thing, and that is if socialist governments are stupid enough to offer grants to his private enterprises, he must take them. His duty is to the shareholders, and if he can do his R&D on the taxpayer's dime, saving the shareholders the expense, then that is what he must do. Don't make the mistake of blaming Drury for the abject stupidity of the National Socialist government. By all means have a crack at the abject stupidity of a quota system for board members, but that is a different discussion.
V
Lets give them 10% taxes.
I've said it before and I'll say it again: If the government is stupid enough to give me money, I am smart enough to take it.
If you don't like it, get involved and run for office. Which, fortunately, you are doing.
Gantt Guy is right - We had a similar experience in a tech start up where we couldn't get anyone in TechNZ or NZ T&E to show any interest. Likewise several politicos. After we had already made the shareholders a hefty return and were acquired by a multinational at a great price premium suddenly they were trying to throw money at us and line up for photo's.
Xero is not innovative. They are doing a slightly different flavour of generic online accounting software that a quick Google search will reveal is far from new. They do it well, but it isn't new. I wish them every success, but it is drawing a very long bow and requires a truckload of weasel words to fit their software development work into the category of research and development. They don't need or deserve the money.
Not sure why you are picking on Xero/Rod. Other companies on the list receiving R&D money include those that actually make money (F&P Healthcare and Appliances, Endace) and ones that aren't even NZ owned (cant remember the name).
I am not sure they should be getting taxpayer money, but as Rod says, it is their duty to shareholders to get what is on offer.
Or to put it in terms you understand - "it is the duty of Directors to minimise tax to the full extent of the law".
Everyone else is looting, we'll do it too.
It's not your money Rod. Argue for your taxes back yes. Argue for all businesses to have a low company tax rate, but don't argue for a handout. Crony capitalism isn't capitalism.
8.15am - if I had time I would "pick" on all the others as well.
I think the point one feels they HAVE to take the coin as everyone is, was obvious enough.
I get pissed off when people take simply because they can. There is no free lunch and if you shouldn't take (its usually pretty clear whether you should or not) don't. Deceiving yourself that its OK because someone else does is just bollocks. Govts trying to manage things like this leads to these kind of outcomes that distort results which then requires another fiddle to fix and so on it goes.
Xero is shit anyway
Sorry Kate but ACT party promoters are in no position to criticize crony capitalism while you have policies that favour certain corporate interests.
ACT's superannuation policy is a case in point - with their so called voluntary policy we must continue to contribute to the government super system or we can choose a private scheme. Our private Super "Must be invested with organisations that have retirement authority approval".
This looks to me like a recipe for corporate croneyism.
http://www.act.org.nz/superannuation-policy
I think that he is right; if it is on offer then he has to take it - otherwise he isn't getting the best result that he can for his shareholders. He may disagree with it but if he turns away free money then his shareholders aren't going to be happy.
Such corporate welfare is a disgrace and real business leaders should be lobbying hard out for a low flat tax regime and reforms instead of sitting back raping the taxpayer.
If a business cant raise its own growth capital to fund itself going forward you really have to ask just how bankable the business really is.
Any business can survive propped up by a numpty government. Sadly, we have a choice of two.
Kevin Campbell
@CactusKate - but they are obligated by their shareholders to maximise returns.
Companies dont make the tax/R&D rules - so you cant blame them.
Great post Cactus. It's so frustrating that the Big Staters either won't, or are incapable, to see that their argument against capitalism (and freedom), are these crony capitalist systems of the West, that are as far away from laissez faire capitalism as Cuba (well, almost). As Mises said: there's either capitalism or the planned economy - there's no in between.
To that extent, these damned businesses and business people do great harm.
180K NZD for me, but then it was after tax. lol. Still a dirty socialist though, just because you can do ideological arbitrage, doesnt make it right.
I'm ok with development loans, NZ doesn't have the VC environment of the US & frankly even though it's a chicken & egg scenario, I'd rather we just get stuff developed. VC's will turn up if we do enough Xero's.
Personally I think there are better targets like Provisional Tax which is a freaking disaster for small businesses ( should be optional to be auto calc'd as part of the GST return for businesses under 20 million turnover ).
Which is my frustration with ACT, they talk good, but the changes that would really help small businesses are to "small" for them, which is plain dumb, as they should build reputation & profile by actually making life easier for business people, rather than going off in some unrealistic airy fair rant ( was that 21% corp tax or 10% Mr Brash, or was it what you felt like at the time & at 10% why the F**k as a salary earner should I subsidise corporate tax to the extreme you suggested ).
Fundamentally it's simple, if you want something to change, it either has to be obvious it'll help the majority, or you have to be able to explain why in terms they can understand, it's a democracy we live in, not an economics experiment.
Drury is put up as a pillar of New Zealand's society for taking taxpayer largesse.
As a provincial town beancounter I have put people on incomes in excess of $350,000 in receipt of Working For Families Tax Credit. I am pilloried for my efforts. Those people pay me a fee and I work for that fee.
I cannot recall who first said that a reasonable man adjusts himself to the world; an unreasonable man wants to adjust the world to himself.
I am a reasonable man, and because of my efforts, and others like me, the government is exercising great care to rearrange the Herd Scheme/National Standard Costs scheme for livestock valuation.
By my professional expertise I have encouraged people to bludge of the taxpayer just as Drury and his company does.
I am the devil incarnate.
Drury is a hero.
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