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Mark Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. Photo by Chip Somodevilla/Getty Images.
Mark Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. Photo by Chip Somodevilla/Getty Images.

The BulletinFebruary 19, 2019

The Bulletin: Is that it for tech giant tax?

Mark Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. Photo by Chip Somodevilla/Getty Images.
Mark Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. Photo by Chip Somodevilla/Getty Images.

Good morning, and welcome to The Bulletin. In today’s edition: Tax on tech giants proposed but doesn’t go far, peace may be breaking out in China stoush, and the incredible story of two brothers vs the Avondale Business Association. 

The government has made a big announcement on taxing internet giants, but there are a lot of important caveats in the details. It’s a tax on revenues generated in NZ by companies selling digital services based offshore, reports Interest. That will include the likes of Uber, Youtube, and the big beasts in Facebook and Google. Their effect on New Zealand has been vast and far reaching (especially on the media) and their profits have been handsome, so it stands to reason that they should pay some tax. Finance minister Grant Robertson said the current situation wasn’t fair, and it needed to change.

On the other hand, the amount they’ll be taxed is being floated at 2-3% of gross revenues. In total, that would bring in – at most, according to government estimates – up to $80 million a year. This is not a particularly significant amount of money, relative to either the size of the market, or the government’s overall revenues. For scale, research we published last year showed some individual companies would pay more tax alone – for example Spark, which paid $139 million in tax.

Writing on the NZ Herald, business editor at large Liam Dann suggested it was a long-overdue, but ultimately cautious move. He also noted that Australia has had a similar tax in place but struggled with enforcing it, sweating hard to bring in $37 million from Google last year. So even at that low level, there are fears that it will be accepted – Radio NZ is reporting warnings this morning from the National Party, who say that New Zealanders will now run the risk of losing access to some global digital services. There are moves afoot at an OECD level to have international agreement on how this should work, but in the interim many countries are going for individual solutions.

In what is perhaps a symbolic story for how difficult it is to enforce the will of the government on foreign digital companies, Stuff reports the High Court last night ruled against the Commerce Commission, who wanted an interim injunction put in place against Viagogo. That’s the notorious ticketing site accused of multiple ongoing scams, so in case you hadn’t heard the name, never risk buying anything from them. That case is expected to drag on for a long, long time, as Viagogo is based in Switzerland. There was also the recent example of google flagrantly breaching name suppression with an automated email – regulating these companies is a massive headache, basically.

So in terms of the announcement, a cynic might say that this is a move timed to be in advance of the Tax Working Group report, which is being released later this week. The theory would be that news about a relatively popular new tax might mollify news about anything potentially unpopular in the Working Group’s report – for example, a capital gains tax which despite not yet existing has already been a key attack line for the opposition. Not that I’m calling Jason Walls from the NZ Herald a cynic, but that’s his suggestion in this piece. Then again, if that was in fact the plan, you’d think the sights might have been set a bit higher. A discussion document will be out in May, with the plan to have the law passed by the end of next year.

Exporters are saying they’re seeing various hold-ups trying to get products across the Chinese border, reports Farmers Weekly. The companies include meat processor Ovation, seafood company Sanford, and milk exporter Oravida was also understood by the publication to be having troubles. In talking about the problems they had, Ovation copped to having a bone included in what was meant to be a container of boneless meat, but were surprised by the strength of the reaction, with a threat to suspend the export licence of the supplying plant.

Bear in mind though, that story above is from a couple of days ago. And on Politik this morning, there’s analysis which argues that in fact the situation has moved on, thanks to a weekend of negotiations between NZ and China officials, and is now back on more solid footing. The PM Jacinda Ardern was also interviewed on Q+A last night, and didn’t rule out Huawei being involved in New Zealand projects in the future.

Some incredible drama has been going down over the last 18 months in the Avondale Business Association, and Madeleine Chapman has the full story on The Spinoff. Two brothers, concerned about what exactly the ABA was doing, decided to get involved. Then, the old guard closed ranks, and legal threats and trespass notices started flying. There was even a battle over who the rightful chair of the association was. And throughout it all is the question – can change be brought to a suburb that has had a tough few decades, while neighbouring suburbs have thrived?

One News Colmar-Brunton poll has come out, and the numbers are in broad agreement with the recent Newshub Reid Research poll. Labour is ahead of National in the party vote, the Greens are just above the threshold, NZ First a couple of percentage points below it, and nobody else doing much to trouble the scorers. In the preferred PM stakes, Jacinda Ardern continues to be way ahead, with Simon Bridges and Judith Collins together sharing 2nd place.

The Greens are under fire over their stance against genetic engineering being used in predator control, reports Newshub. National says the party has been “blinded by ideology” on it, and refuses to look into what some experts say are promising options to reach the Predator Free 2050 goal. There are two points to make there – other experts agree with the Greens, saying there could be serious unintended consequences as a result of the untested technology. “If you’re using genetically modified organisms, you couldn’t do that in the lab for pest control, it would have to be in the field. We need to ensure there is a public debate about that, because it’s a major policy change,” said Conservation minister Eugenie Sage.

Meanwhile, NZ First were making a rather interesting announcement of their own about 1080. $20 million is coming out of Shane Jones’ Provincial Growth Fund, to research alternatives to 1080, reports Radio NZ. The party leader Winston Peters said it could be “a step towards making 1080 redundant.”

Paramedics are writing messages on their own ambulances to protest pay and conditions, reports Newsroom. Negotiations have stalled since last year over a new pay rise, offered at 2.5% by St John. It’s a slight escalation in their industrial action, which so far has focused on moves that don’t disrupt patients at all. St John says they’re disappointed with the graffiti, as it might disturb patients in an already distressed state.

It has been a momentous day in British politics, with a split taking place in the UK Labour party over Brexit, reports the BBC. The seven departing MPs also say the party has become “institutionally anti-Semitic” – a long running criticism against the leadership of Jeremy Corbyn (which he has always denied that he is, and said that he is committed to fighting.) The seven MPs will sit as an independent bloc in Parliament, and push for a second referendum on Brexit.

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Te Papa. Photo: Wolfgang Kaehler/LightRocket via Getty Images

Right now on The Spinoff: David Winter unpacks some of the issues going on at Te Papa at the moment, and asks whether the museum is still committed to natural history. Former Green MP Keith Locke says in our recent dealings with China, we can’t afford to be seen as a lapdog for the US or the rest of the Five Eyes network. And I’ve been writing about one of the more futuristic suggestions out of that week we focused on waste – could the extreme heat technique of pyrolysis help address our crisis of single use plastic filling landfills and oceans?

Meanwhile, there’s going to be an avalanche of Jordan Peterson media today, in which he’ll probably opine about all sorts of things beyond his scope of expertise. To that end, Emily Writes has come up with an extremely useful guide full of people that would really be worth talking to first and foremost on those topics. Meanwhile, Danyl McLauchlan wrote this essay which came in for criticism from Jordan Peterson himself, who tweeted that McLaughlan was “criticizing what you do not have the will to understand.”

I promise this won’t just turn into a Wellington Phoenix fan blog, but I did ask for feedback yesterday and what came back was pretty interesting. Malcolm had a great point relating to stadiums, noting “the Kingz used Mt Smart for their short stint, and the Knights used Albany. I have attended two Phoenix games in Auckland in the past two years. The game in Albany drew a crowd of less than 5000. Meanwhile the game against the Victory drew 22,600 at Eden Park.” Fred reckons it’s time for a 2nd NZ team in the A-League, as the sport has grown enough in Auckland, and the local derbies would be intense. Might depend where they play, Fred.

Jin Koo was perplexed about the transport system on the day, saying there were strange mixed messages about whether trains would be free for punters, as they sometimes are for other Eden Park events. “Definitely felt like it could have been better organised, and to me it raised the question of whether the city (from both a logistical and an infrastructure perspective) is well-positioned for other large events. And given the discussion in yesterday’s Bulletin on the future of Auckland’s stadiums, I do wonder which ones are suitably connected to allow greater public transport use in future.”

Finally, Oska had some reasonable criticism of my piece about the game, and the future of the Phoenix. He reckons I was jumping the gun on saying the bad times were coming again soon, given the academy is producing good players, the manager and sponsor might stay, and the financial position is good enough to make the A-League much more likely to keep the Phoenix around. Here’s hoping – I want to go to another one.

Right, that’s enough sports chat in this section for a while, normal service will resume again tomorrow.

White Ferns skipper Amy Satterthwaite has given embattled coach Haidee Tiffen some qualified support to continue in the job, reports Newshub. Tiffen is currently taking a leave of absence after a harsh review into the T20 World Cup campaign, and her contract is coming up for renewal later this year. Satterthwaite says she hopes Tiffen will reapply, but also said “there will hopefully be a lot of candidates that apply for the job.” The White Ferns are currently in Australia to play for the Rose Bowl, a storied series which has been running since 1985, but which the Ferns have won only three times, and never this century.

From our partners: Barbecuing is one of New Zealand’s national summer past-time, but what are the nuances in our barbecue culture? Brenda Talacek, Vector’s Group Manager for Gas Trading, lifts the lid.

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