Here we are as country not getting enough Tax to pay for the basic things we are covering to be a functioning Country, and these scum bag Pollies are giving this Big Corporations a Free Ride. While IF you earn Over $54,800 you get the Honour of paying 30% tax on income above that. WTF
First just to say that there is no excuse for Government enabled tax dodges whether by Uber or Iwi.
On the other hand I do think people should be entitled to work as contractors rather than employees providing there are clear and reasonable rules for distinguishing.
The kind of rules being laid down as a new "gateway test" are not really new at all but have been applied more or less formally in NZ and other jurisdictions such as the UK.
"...if a few criteria are met (e.g. a written contract saying so, freedom to work for others, ability to refuse work, etc.). If those sound familiar, it’s because they mirror the exact points Uber proposed."
All of the above sound familiar because the "control principle" already applies in NZ as well as tax departments in other countries, although in NZ perhaps not always as diligently as it might be. It is why in consulting contracts with contract recruitment agencies I have always been careful to remove or amend any clauses that imply control by an agency, particularly where longer terms are involved. Although I've tried to be diligent in that regard, judging by the kind of conditions those firms often seem to try to impose (e.g. hours, holidays etc), IRD do not often challenge them as being employment contracts.
Worth perhaps also adding that NZ firms in exporting overseas attempt to classify their supplies to attract the lowest tariffs and taxes. For example Fonterra claims the import code of various milk products derivatives according to those which attract the least duties. Playing the system in each of the many countries where those products are sold. This is just good business. Get it right and it can be worth many millions over time, however get it wrong and it can mean massive fines and knock-on distrust impacts.
NZ is such a small struggling economy, with a tiny market that offers relatively little to big global companies, that sometimes its going to be to our net advantage to accept leaking some tax whilst keeping those players in play here, rather than losing the service whilst gaining beneficiary numbers. It's surely a balance rather than just 'the rules is the rules'.
Uber's 'innovation' internationally is to undercut well structured taxi companies, often cooperatives, and drive them out of business until Uber is the only option in a city. This is the Amazon model - use billions of venture money to undermine the wages of workers, the ability of governments to tax and create a monopoly when prices will be raised and early investors get extraordinary rewards. Congratulations for getting behind the PR spin and highlighting just how much need there is in NZ for much better transparency. My personal response is to avoid Uber rides and buying from Amazon.
The Australian Fair Work Commission in 2019, after a two year investigation, concluded that drivers working through Uber are not employees. In NZ, presumably with slightly different statute and case law, a court decision driven by that decided they were. So the Government altered the legislation in a way that gave certainty, that Uber drivers here were also contractors, not employees. This contractor/employee boundary has been a problem for the Courts for at least two decades, in early years involving courier drivers but others as well. I see no problem at all with the decision of this Minister to get clarity and parity with Australia. Uber as an 'app' system has brought cheaper 'taxi-type' rides to Kiwis, with far superior information on them and accessibility, price and timeliness than traditional taxi systems. At the same time, it has offered a very low capital way into this transport for hire business, with no need to buy a licence or specified car type. The job can be done part-time, full time and there is no requirement to do it: it is an employment boon to many. If you don't want to be such a driver, there is no compulsion and most of the non-financial criticisms of Uber seem to fail at this point.
Miller's research is interesting. Thank goodness for GST! Uber operates in the same kind of international corporate income tax zone as the other global apps, like Facebook etc. This attribution system of income in non-NZ jurisdictions is straightforwardly legal, for all that it is frustrating. I am quite sure that IRD have been and are working in conjunction with the OECD and other relevant international authorities to try to get an agreed system for income allocation for tax purposes. If you lift your head to read international news, you will see that last Sunday Canada dropped its proposed taxes on Facebook and like US originated global businesses in the face of threats from Trump. I suggest until Trump is gone and sanity hopefully prevails again, we won't get action on taxing Uber more than we have. At least driver employment has been expanded and income tax from here is some compensation.
New Zealand is in the grip of systemic corruption. Not the casual corruption where regulators get "taken out to lunch" in the manner that most of us have seen all too often in our working lives, but of the systemic type where the institutions of government openly collaborate with powerful financial interests without being subject to any moral inhibitions or legal restrictions.
The NZDF scandal (which no one seems to see as a scandal, not even "the perception of impropriety" which is the regime's normal way of characterizing these things) is further evidence of the systemic character of the corruption. Defence Force personnel seem to have no clue that they should be acting in the interests of the New Zealand public. Why is that? Because no one has ever suggested to them that they should. Britain controlled New Zealand's foreign policy in law and in fact until 1947, and with that right to control foreign policy went the right to direct New Zealand military forces. Since 1947 control over New Zealand foreign policy has been the de facto joint prerogative of the UK and US governments. That is why New Zealand parliamentarians can and must hold to a "bipartisan" foreign and military policy. There is no point in arguing about something over which you have no control. Consequently the NZDF recognizes no allegiance to the New Zealand public which funds its activities through taxation. In any theatre of operations it takes its orders from US commanders. In matters of logistics and supply it does whatever suits the interests of its own personnel, which includes relationships with military suppliers that would, in a normal state, be judged corrupt.
It is not too hard to see that the Realm of New Zealand is corrupt precisely because it is a colonialist entity. Its political "leaders" give allegiance to a foreign head of state. The machinery of state has no sense of moral obligation and responsibility to the people, because objectively it does not have such a responsibility.
The state as a colonialist entity exists in a moral limbo, where anything goes.
Despite that New Zealand is still ranked by Transparency International as one of the less corrupt states on the planet, causing many New Zealanders to cynically ask one other "I wonder how much we had to pay for that ranking?". The answer is actually hidden away somewhere in the government accounts, because Transparency International NZ is funded by the NZSIS.
It is a problem that won't go away until the entire apparatus of colonialism is destroyed.
"Tribalism" is an option to replace colonialism, and, as you say, a few would choose that. A larger number would choose national independence for Aotearoa and a genuine democracy, which should also be their right. If a free choice was offered to the people of Aotearoa, I believe that only a small number would wish to continue with the present colonialist system. You could put that to the test, and you could start by not requiring all members of parliament to swear allegiance to the British sovereign. But to date the regime has demonstrated a singular reluctance to allow any constitutional challenge to colonialist rule.
Having an unelected head of state is not consistent with being a genuine democracy, but it goes deeper than that. Democracy is meant to be "government by the people" yet there is a huge and growing divide between the electors and their supposed representatives. In a genuine democracy leaders will be truly answerable to the people, not through the blunt and ineffective instrument of triennial elections, but through radical reform of the electoral system, two key elements of which would be the open ballot and continuous election.
We are certainly slipping down the 'Transparency Index', and thankyou Bryce for tackling this total rort by government over it's own citizens. This is surely not what the bulk of voters want to see from a National government.
While it may be Brooke van V of ACT who turned the key on this corrupt behaviour, it has to be the Finance Minister and her minions, Nicola Willis primarily, who signs off on this abrogation of tax revenue and the shoddy treatment of Uber employees. It may be naive to ask what kickbacks were employed to gain such business friendly treatment, but the suspicion begins to loom large when you count up all the players involved from the NZ Initiative to BusinessNZ. One has to ask where concern for the country starts.
Here we are as country not getting enough Tax to pay for the basic things we are covering to be a functioning Country, and these scum bag Pollies are giving this Big Corporations a Free Ride. While IF you earn Over $54,800 you get the Honour of paying 30% tax on income above that. WTF
First just to say that there is no excuse for Government enabled tax dodges whether by Uber or Iwi.
On the other hand I do think people should be entitled to work as contractors rather than employees providing there are clear and reasonable rules for distinguishing.
The kind of rules being laid down as a new "gateway test" are not really new at all but have been applied more or less formally in NZ and other jurisdictions such as the UK.
"...if a few criteria are met (e.g. a written contract saying so, freedom to work for others, ability to refuse work, etc.). If those sound familiar, it’s because they mirror the exact points Uber proposed."
All of the above sound familiar because the "control principle" already applies in NZ as well as tax departments in other countries, although in NZ perhaps not always as diligently as it might be. It is why in consulting contracts with contract recruitment agencies I have always been careful to remove or amend any clauses that imply control by an agency, particularly where longer terms are involved. Although I've tried to be diligent in that regard, judging by the kind of conditions those firms often seem to try to impose (e.g. hours, holidays etc), IRD do not often challenge them as being employment contracts.
Worth perhaps also adding that NZ firms in exporting overseas attempt to classify their supplies to attract the lowest tariffs and taxes. For example Fonterra claims the import code of various milk products derivatives according to those which attract the least duties. Playing the system in each of the many countries where those products are sold. This is just good business. Get it right and it can be worth many millions over time, however get it wrong and it can mean massive fines and knock-on distrust impacts.
NZ is such a small struggling economy, with a tiny market that offers relatively little to big global companies, that sometimes its going to be to our net advantage to accept leaking some tax whilst keeping those players in play here, rather than losing the service whilst gaining beneficiary numbers. It's surely a balance rather than just 'the rules is the rules'.
Uber's 'innovation' internationally is to undercut well structured taxi companies, often cooperatives, and drive them out of business until Uber is the only option in a city. This is the Amazon model - use billions of venture money to undermine the wages of workers, the ability of governments to tax and create a monopoly when prices will be raised and early investors get extraordinary rewards. Congratulations for getting behind the PR spin and highlighting just how much need there is in NZ for much better transparency. My personal response is to avoid Uber rides and buying from Amazon.
The Australian Fair Work Commission in 2019, after a two year investigation, concluded that drivers working through Uber are not employees. In NZ, presumably with slightly different statute and case law, a court decision driven by that decided they were. So the Government altered the legislation in a way that gave certainty, that Uber drivers here were also contractors, not employees. This contractor/employee boundary has been a problem for the Courts for at least two decades, in early years involving courier drivers but others as well. I see no problem at all with the decision of this Minister to get clarity and parity with Australia. Uber as an 'app' system has brought cheaper 'taxi-type' rides to Kiwis, with far superior information on them and accessibility, price and timeliness than traditional taxi systems. At the same time, it has offered a very low capital way into this transport for hire business, with no need to buy a licence or specified car type. The job can be done part-time, full time and there is no requirement to do it: it is an employment boon to many. If you don't want to be such a driver, there is no compulsion and most of the non-financial criticisms of Uber seem to fail at this point.
Miller's research is interesting. Thank goodness for GST! Uber operates in the same kind of international corporate income tax zone as the other global apps, like Facebook etc. This attribution system of income in non-NZ jurisdictions is straightforwardly legal, for all that it is frustrating. I am quite sure that IRD have been and are working in conjunction with the OECD and other relevant international authorities to try to get an agreed system for income allocation for tax purposes. If you lift your head to read international news, you will see that last Sunday Canada dropped its proposed taxes on Facebook and like US originated global businesses in the face of threats from Trump. I suggest until Trump is gone and sanity hopefully prevails again, we won't get action on taxing Uber more than we have. At least driver employment has been expanded and income tax from here is some compensation.
Great report Bryce, thanks for this
New Zealand is in the grip of systemic corruption. Not the casual corruption where regulators get "taken out to lunch" in the manner that most of us have seen all too often in our working lives, but of the systemic type where the institutions of government openly collaborate with powerful financial interests without being subject to any moral inhibitions or legal restrictions.
The NZDF scandal (which no one seems to see as a scandal, not even "the perception of impropriety" which is the regime's normal way of characterizing these things) is further evidence of the systemic character of the corruption. Defence Force personnel seem to have no clue that they should be acting in the interests of the New Zealand public. Why is that? Because no one has ever suggested to them that they should. Britain controlled New Zealand's foreign policy in law and in fact until 1947, and with that right to control foreign policy went the right to direct New Zealand military forces. Since 1947 control over New Zealand foreign policy has been the de facto joint prerogative of the UK and US governments. That is why New Zealand parliamentarians can and must hold to a "bipartisan" foreign and military policy. There is no point in arguing about something over which you have no control. Consequently the NZDF recognizes no allegiance to the New Zealand public which funds its activities through taxation. In any theatre of operations it takes its orders from US commanders. In matters of logistics and supply it does whatever suits the interests of its own personnel, which includes relationships with military suppliers that would, in a normal state, be judged corrupt.
It is not too hard to see that the Realm of New Zealand is corrupt precisely because it is a colonialist entity. Its political "leaders" give allegiance to a foreign head of state. The machinery of state has no sense of moral obligation and responsibility to the people, because objectively it does not have such a responsibility.
The state as a colonialist entity exists in a moral limbo, where anything goes.
Despite that New Zealand is still ranked by Transparency International as one of the less corrupt states on the planet, causing many New Zealanders to cynically ask one other "I wonder how much we had to pay for that ranking?". The answer is actually hidden away somewhere in the government accounts, because Transparency International NZ is funded by the NZSIS.
It is a problem that won't go away until the entire apparatus of colonialism is destroyed.
Geoff the only option to replace colonialism is tribalism. And few would want that.
"Tribalism" is an option to replace colonialism, and, as you say, a few would choose that. A larger number would choose national independence for Aotearoa and a genuine democracy, which should also be their right. If a free choice was offered to the people of Aotearoa, I believe that only a small number would wish to continue with the present colonialist system. You could put that to the test, and you could start by not requiring all members of parliament to swear allegiance to the British sovereign. But to date the regime has demonstrated a singular reluctance to allow any constitutional challenge to colonialist rule.
Geoff I'm not sure what you mean re NZ not being a "genuine democracy"
Are you saying NZ should move from being a constitutional monarchy to becoming a Republic?
Having an unelected head of state is not consistent with being a genuine democracy, but it goes deeper than that. Democracy is meant to be "government by the people" yet there is a huge and growing divide between the electors and their supposed representatives. In a genuine democracy leaders will be truly answerable to the people, not through the blunt and ineffective instrument of triennial elections, but through radical reform of the electoral system, two key elements of which would be the open ballot and continuous election.
We are certainly slipping down the 'Transparency Index', and thankyou Bryce for tackling this total rort by government over it's own citizens. This is surely not what the bulk of voters want to see from a National government.
While it may be Brooke van V of ACT who turned the key on this corrupt behaviour, it has to be the Finance Minister and her minions, Nicola Willis primarily, who signs off on this abrogation of tax revenue and the shoddy treatment of Uber employees. It may be naive to ask what kickbacks were employed to gain such business friendly treatment, but the suspicion begins to loom large when you count up all the players involved from the NZ Initiative to BusinessNZ. One has to ask where concern for the country starts.
I've long been concerned over Uber's payment of ACC. You mentioned ACC once. Is Uber paying ACC in relation to all their transactions?