A Spinoff tax strategy

Dr Eric Crampton
Insights Newsletter
20 May, 2022

It’s a shame Grant Robertson didn’t sit down with The Spinoff’s Duncan Grieve before Budget Day.

The Spinoff has come up with an ingenious new policy. Instead of the Government paying for the things it wants, it will force companies to deliver them for free. The Government won’t even have to raise taxes anymore. 

Sounds odd? Well, this is how it goes.

The Spinoff argued last year that New Zealand media should adopt something like Australia’s News Media Bargaining Code. On the other side of the pond, the government has the power to force platforms like Google and Facebook to pay media companies simply for linking to them.

In New Zealand, media companies have been requesting voluntary collective bargaining with the technology companies. But when there’s an implied threat of state action, what does “voluntary” mean?

I’ll tell you what it means: we get something for nothing! Tech companies get extorted to pay a bill (so a bit like a tax, really), but it never shows up in league tables of company tax rates. 

The Spinoff’s idea is so brilliant, it can be expanded easily.

This week, Duncan Grieve suggested that streaming video platforms like Disney+ could be ‘asked’ to devote a proportion of their New Zealand revenues to fund New Zealand content production. So no more need for the government to fund NZ On Air – the streaming platforms can provide it instead, no tax required.

But why stop there?

Government could also ‘ask’ Spotify to pay higher royalties to New Zealand artists from its New Zealand revenues – regardless of whether Kiwi subscribers want to listen to local music.

Online booksellers could be nudged into putting a surcharge on foreign books sold here, and the government could ensure that only the most promising local authors received the funding. All of Wellington’s worthies would obviously automatically be eligible.

And best of all, Fox News could be ‘asked’ to help fund sympathetic documentaries about local progressive politicians in exchange for the right to broadcast here. Wave the wand, and no more controversies about NZ On Air and the Film Commission putting $219,999 toward a documentary about Green MP Chlöe Swarbrick. It would all be done totally voluntarily, by companies that feared reprisals if they didn’t contribute.

The Spinoff’s new budget and tax strategy is even better than making Mexico pay for a wall. Shame it was too late to make it into Budget 2022.

But there’s always next year.

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