All week this week the Spinoff Review of Books examines a new book devoted to investigative journalism in New Zealand. Today: an excerpt from the book, in which James Hollings backgrounds an investigation by Herald legend Matt Nippert.
Late in 2016, then-Prime Minister John Key was in Peru for a summit of world leaders. At the meeting, he spotted Mark Zuckerberg. Instead of the usual banalities and mutual backscratching, Key did something unusual — he took Zuckerberg to task. The issue? Tax. Or rather, the lack of it. Facebook, despite global revenues of around $US18 billion a year, pays, in many countries, little or no tax. While this might look clever to the corporate accountants, Key told Zuckerberg it was hurting the company, and he needed to fix it.
While many New Zealand Facebook users would probably have applauded Key for taking Zuckerberg on, few would have known that he probably would not have done so without the help of a New Zealand journalist.
At the beginning of 2016, Matt Nippert, of The New Zealand Herald, began an inquiry into how much tax is paid by global companies in New Zealand. The results were startling. Nippert found that 20 global companies that reported revenues in New Zealand of $10 billion paid only $1.8 million in tax. Facebook, with more than $100 million in New Zealand revenue, paid tax of only $43,261 — less than many individual salary earners.
Not all investigative journalism has a big public impact. But sometimes it has a significant impact on government, when it highlights a problem that needs to be fixed and helps to mobilise support within bureaucratic and political circles. That is why investigative journalism has been called the “first draft of legislation”. Nippert’s tax investigation is a good example. It did not prompt an immediate response, but change did come. The first sign that the story had been noticed came when it won Nippert the EY Business Journalism Award in June 2016. Later, a Herald “Mood of the Boardroom” survey found that two-thirds of business leaders thought the issue was a problem for New Zealand, while less than a fifth (16 per cent) thought the government was doing enough about it.
By November of 2016, the head of the Inland Revenue Department, Naomi Ferguson, took corporates to task, urging them to “rebuild the trust of the New Zealand public” about tax. Finally, in December, the government acted, with Revenue Minister Michael Woodhouse announcing new powers for the Inland Revenue Department to crack down on global tax avoiders. These included granting broader information-gathering powers to Inland Revenue investigators, shifting the burden of proof to multinational companies in disputes over transfer pricing, and tightening loopholes that allowed companies to claim that they had no taxable presence in New Zealand. As Nippert pointed out in a later story, the initiatives are less than those taken by Australia, and the United Kingdom’s diverted profits tax, but they are a start.
Like Brian Rudman, Nippert tends to let himself be drawn into an issue that is of interest rather than setting out to “do an investigation”. Something of a lone wolf, he is motivated by “discovering new things, and finding out the way the world works”. He likes defining his own issues, and exploring them, rather than hanging around with a pack of other journalists. “It’s more asking questions independently. It doesn’t have to take a lot of time. You can run up a big story or you can, over the course of a year, slog away at something. It’s more a state of mind.”
The tax story is a product of that way of thinking. Nippert had been thinking about the tax issue for about a year, after noticing that it was gaining traction offshore. However, he wasn’t sure how to attack it, as much of the information he thought he’d need appeared to be hidden behind commercial walls. After talking to New Zealand’s “Mr Accounting”, Victoria University’s Emeritus Professor of Accountancy and Law, Don Trow, he found a way.
Trow suggested that he attack the story by comparing profits declared locally and internationally. After pitching it, Nippert had to convince news executives that there was a story there; and after doing the initial run of a couple of companies, he realised that Trow’s idea would work. But there was still a lot of work to do — weeks of going through company statements, and slowly building up data sheets that enabled robust comparisons that couldn’t be picked apart. The story is a credit not only to his ability to stand back and ask the right questions, but also to his appetite for serious-minded journalism about policy.
While many New Zealand journalists would hate to be described as policy nerds, Nippert embraces the term. After growing up in the Hutt Valley he took an Honours in Public Policy at Victoria University, and got a taste for journalism on the student magazine, Salient. He only got into journalism because his application to become a diplomat was rejected. “So I have a reasonable idea of what it takes to get these things through. Public policy needs motivation to move it through. If you stick on issues long enough, the government needs to be seen to be doing something. I view the stuff I’m doing as oil to grease the public policy machinery.”
Nippert has never been afraid to set his own course: he abandoned a journalism course at AUT, opting instead to study for a Master’s degree in New York’s prestigious Columbia Journalism Programme. Coming back to New Zealand, he’s steadily worked his way up, to become a reporter with the investigation unit at The New Zealand Herald. After years grafting at smaller publications, such as the Listener, he’s enjoying the kind of traction that the front page of the Herald can give to the issues he’s interested in. “It’s as good as it gets. If you view your role as helping to diagnose problems in society and the economy, and the steps [needed] to remedy those, it’s extremely satisfying.”
With the confidence to set his own agenda, the intellectual capacity to engage with complex policy issues and the skill to be able to set them before the public in simple, accessible form, Nippert is helping cement the role of investigative journalism as a core part of New Zealand public life.
Excerpt from A Moral Truth: 150 years of investigative journalism in New Zealand, edited by James Hollings (Massey University Press, $45), available at Unity Books. The book is launched this weekend at the 2017 Investigative Journalism Conference held at AUT, with guest speakers Mihi Forbes, Nicky Hager, Tony Wall and others.
The Spinoff Review of Books is proudly brought to you by Unity Books.