There really is a Santa Claus. And he has been revealed to be the most unlikely of people, namely the Commissioner of Inland Revenue. Just in time for Christmas IRD has persuaded the Big Four Australian-owned banks – ANZ, ASB, BNZ, and Westpac – to recognise the futility of attempting to dodge payment of the astonishing $2.2 billion of taxes that, between them, they avoided via deliberately complicated structured financial transactions. So that’s how they rode out the recession, by not paying nuisance costs such as taxes. Not an option for the rest of us mugs who have to pay our taxes, whether we like it or not.
The Big Four only faced up to the inevitable after two of them had been to court and lost, with the judge in one case describing what they did as “a rort”. This massive tax dodging is one of the main reasons why three of the Big Four – ANZ, BNZ and Westpac – are among the nine finalists in the 2009 Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand, the winner/s of which will be announced in Wellington on March 11. Since the Roger Award started in 1997 this is the first time that three companies in one such vital sector of the economy have been finalists at the same time.
This is theft from the NZ taxpayer on a truly monumental scale, particularly at a time when the Government is cutting back public spending and dropping unsubtle hints about more beneficiary bashing. This huge shortfall in tax could be used for health and education. NZ taxpayers are the guarantors of the deposits of these banks. Yet we get no say in their running, let alone ownership. The taxpayer needs to be directly represented on the boards of each one of these Aussie banks that we’re underwriting with our money. And, if that doesn’t do the trick, nationalise them.
Tthe news just keeps getting better. The taxpayer got another Christmas present this week with the announcement that the quarterly current account is in surplus for the first time since 1988 (after 21 years of an increasingly dire current account deficit). Why? Partly because the Big Four banks had set aside money to repay their illgotten gains. But also because the profits of transnational corporations are down and therefore less money is being sucked out of the country in the form of repatriated profits.
Commentators have been at pains to assure “the market” that this is a one off due to the recession and the normal scenario of tens of billions of dollars leaving NZ and a soaring current account deficit will resume as the economy “improves” (for whom?). But this unusual convergence of circumstances, just in time for Christmas, has given New Zealand workers and taxpayers a tantalising glimpse of what this country could actually be like if it wasn’t run as a branch office of the transnationals (and bled dry by tax dodging Aussie robber banks in the process) – money would actually stay in the country, where it could be used in the national interest. What a thought.