Editorial: Apple's tax deficit shows up English's political problem.

The Iphone is brilliant, but Apple's tax policy is not.

The Iphone is brilliant, but Apple's tax policy is not.

OPINION: It is extraordinary that Apple paid no tax in New Zealand despite selling billions of dollars of its products. The company is among the largest and most profitable in the world, partly because its technology is so brilliant. But Apple is not being a good citizen in New Zealand.

Because paying tax is the price we all pay for living in a civilised nation. Taxes are what give us hospitals, schools, roads and railways. But Apple doesn't pay its share.

Instead it has put out a question-begging and shifty statement, big on motherhood and apple pie. "Apple aims to be a force for good," it says, adding that it is "proud of the contributions we've made in New Zealand". And it says it pays most of its tax in the United States.

This won't do. Apple's trendy and elegant image hides its ruthless, tax-avoiding nature, like so many other hi-tech companies with cute names. These companies now present a challenge to the exchequers of the world. The New Zealand Government recently outlined a number of plans aimed at making multinationals pay their fair share of tax.

It remains to be seen whether this will work, but in the meantime Prime Minister Bill English is providing mounting evidence that he is much worse at political management than John Key was. Tackled on RNZ about Apple, English quibbles that he personally doesn't know that Apple pays little tax, because politicians are not privy to this information.

This is to strain at a gnat while swallowing a camel, and it is the exact opposite of Key's approach. At his best, Key could tap into the popular feeling that made the issue politically difficult; he did not usually make the mistake of irrelevant quibbling.

This was part of the reason that even though he led a very old government he did not usually seem to be tired or lacking in ideas. The English Government, by contrast, is beginning to sound as though everything is just too difficult.

On the issue of providing fresh water free to giant multinationals like Coca-Cola, for instance, English tries to blind the voters with high principle. Nobody owns water, he says, and therefore there is no problem about giving it free to Coke. The fact that Coke then makes gigantic sums out of access to a free New Zealand resource is deemed irrelevant.

To ignore this fact really is politically inept. It might be that once the principle of non-ownership is conceded, charging for water becomes fraught. But principles which lead to nonsense in practice are flawed.

A similar set of problems arises with water quality. There is mounting concern about our polluted rivers and streams, and this prompted Nick Smith's switch from a standard based on "wadeability" to "swimmability". But Smith was simply unable to sell this policy, partly because of intractable definitional problems.

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Smith is a classic brainy-but-tone-deaf politician. He typically answered the concern about Coke's free water by saying the amount of water involved was relatively tiny. But that ignores the emotion and patronises those who feel it.

Politicians need to be better than that.

 - Stuff


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