Spark boss Simon Moutter gets kudos on innovation but fluffed it on tax

Simon Moutter has increasingly been calling on other businesses to follow Spark's "lead".

Simon Moutter has increasingly been calling on other businesses to follow Spark's "lead".

OPINION: Spark boss Simon Moutter has become quite the populist in recent months, championing vexed issues such as pay, multinational tax avoidance and our investment in innovation.

My marks on his performance:

HIGHER WAGE ECONOMY

Spark says it is making a commitment to a "higher wage economy" by having raised the base wage of all non-commission staff to $40,000 over the past two years.

About 250 Spark staff have received average wage rises of 6 per cent over the past 14 months to bring them over the line, spokeswoman Michelle Baguley says.

READ MORE: Spark raises pay for frontline staff

It's not nothing, and Spark is describing this only as "a start", which suggests there may be more initiatives to come.

But many people will probably be surprised that Spark had any roles paying less than $40,000 to start with.

If you want to see a real commitment to a "higher wage economy", it is surely hard to go past Spark's executive pay, including Moutter's own whopping remuneration package of up to $4.72 million, including possible bonuses.

Even if Moutter only takes home $3m, that's enough to take 250 staff from $40,000 to $52,000 a year.

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It can only be positive for a company such as Spark to be talking in terms of being a responsible employer and linking that to minimum pay.

But to get higher marks, Moutter needs explain his views on pay differentials in more detail and tackle the extremes at both ends of the pay scale. 5/10.

MULTINATIONAL TAX AVOIDANCE

Simon Moutter called in June for Google, Facebook and Apple to explain why they didn't pay more tax in New Zealand - a challenge the companies will have laughed off if they bothered to read it.

Unfortunately, the debate on multinational tax has drifted backwards in quality as it has moved further up the public agenda.

Many technology multinationals are exploiting differences between countries' tax laws to rort the system and route billions of dollars of profits to tax havens.

That has undoubtedly influenced how they have structured their international operations.

But there's little to suggest many are cheating significantly in New Zealand, given many of the firms in question have virtually no operations here.

It is a good and very established principle that companies pay tax in the countries where their economic activities take place.

Firms benefit from locating countries that invest in high standards of health, education and social cohesion, and to the extent that companies choose to base themselves in such countries, that is where they should pay tax.

The OECD is steadily ironing out the issues in the international tax system that have led to "double non-taxation".

Despite appealing for the likes of Google, Apple and Facebook to explain themselves, Moutter ballooned one over the crossbar by failing to back Labour when it called in June for Inland Revenue to exercise the powers it has to discuss companies' tax affairs when faced with public concerns.

Instead, Moutter said the tax department should only comment if it chose to file legal proceedings against a company: 3/10.

INNOVATION INVESTMENT

After leading a fact-finding trip to Israel, Moutter called on big businesses to get behind a new venture capital fund that would invest at least $100 million in early-stage ventures.

The proposed structure of the fund appears vague at this stage and the goal "aspirational".

READ MORE: Spark boss' $100m-plus fund tough but 'worth pursuing'

Moutter's "challenge" to his fellow business leaders to get behind the country's innovators drew a response from Xero boss Rod Drury.

Drury tweeted that Xero's approach to software partnering had seen "hundreds of new startups leveraging our platform and channels to kick off", making the point perhaps that if Spark was only just turning its mind to supporting the innovation ecosystem then it might be late to the party.

Spark has invested in some innovative ventures, for example through its purchase of Givealittle in 2012, as well as in some greenfield add-on businesses such as internet television venture Lightbox and "big data" company Qrious.

Regardless of what becomes of the big business innovation fund – or any arguments about who has pulled their weight to date – Moutter is within his rights to point out that the country benefits from having one major telecommunications firm in local-ownership whose fortunes are completely tied to that of the country: 7/10.

 - Stuff

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