For too long now successive New Zealand governments have given overseas tech companies a free ride. There is no equity between Kiwi marketing, advertising, and media companies and predominantly US ones, when ridiculous tax arrangements allow a company (Alphabet – owners of Google) making over one billion dollars revenue here in 2024 to then pay an insulting and paltry tax of under $8 million. To top it off www.stuff.co.nz published a story recently that not only points to the many millions of dollars our government gives these overseas companies for marketing, it suggests that it is difficult to get exact figures and breakdowns from some ministries of that spending.

The question needs to be – why? Why do we allow these companies to trade here and contribute close to nothing in tax considering the huge revenues they generate? We are in the middle of a long cost of living crisis, too many Kiwi businesses are closing, most of us are doing it tough and at the same time, mainly US media companies are milking it. Why do we then give them taxpayer dollars for services when NZ media is struggling?

“Government departments, ministries, entities, and companies spent a combined $19.4m advertising or marketing with overseas-based companies in 2025 (However, it’s very likely more than double that – see the caveats further down. There’s a mystery $30m spent offshore by Tourism NZ not included in these results).

“The vast majority of that $19.4m was spent with just three companies: Alphabet which owns Google and YouTube ($8.27m), Meta which owns Facebook, Instagram, and Whatsapp ($7.2m), and TikTok ($1.7m). The rest was spent with LinkedIn ($335k), Spotify ($44k), Chat GPT ($120), or categorised as ‘other’ ($1.8m, which is mostly made up of IRD’s refusal to give a breakdown). More taxpayer cash was spent advertising with Alphabet and Meta ($15.48m), than advertising with or subscribing to major local media brands combined ($13.7m).” (Source: “Revealed: Millions in taxpayer dollars sent offshore to Big Tech,” by Lloyd Burr, June 24, www.stuff.co.nz).

These revelations caused a stir amongst Kiwi media companies, some politicians and personally I think it should be a wake up call to us all.

“‘I think the answer to that is definitely not,’ [Winston] Peters said, when asked if overseas tech companies were paying enough tax in New Zealand. ‘Well, it’s no surprise. We set out ten years ago to do something about it and then just lost our nerve.’ Peters agreed taxpayer dollars spent on advertising should be funnelled to local media instead, adding that ‘school books are being bought from overseas when they should be bought from this country and support our own businesses. It’s called New Zealand First.'” (Source: “‘Lost our nerve’: Winston Peters says Big Tech companies should be paying more tax in NZ,” June 24, www.stuff.co.nz).

Yes, our government should spend mostly with NZ media companies. especially considering how incredibly difficult it has been for that sector. I think it’s even more inappropriate given the ridiculous tax arrangements that allow overseas based companies to prosper. Kiwi companies don’t do that and if they tried they would end up being taken to court by IRD.

“Foreign big tech companies that operate in New Zealand divert the vast majority of their revenue offshore – typically via an Irish or Singaporean subsidiary – as ‘licensing fees’, ‘purchases’ or ‘service fees’. This reduces their taxable profits, and hence reduces the amount of company tax they have to pay. It’s laid out in a report by tax expert Nick Miller. You can read it here.

“An example he gives is Google NZ, which in 2024 had revenues of $1.139bn but incurred ‘service fees’ of $1.052bn from its Singapore-based subsidiary. It left a taxable profit of just $29m. Hypothetically, if it paid tax on the full $1.139b, it would have amounted to $318.92m going into the government’s coffers. Instead, it paid around $8m. That’s a discrepancy of $310m. All that money is going offshore instead of going into roads, schools, hospitals, or helping pay for the skyrocketing costs of universal superannuation (and a big chunk of it is taxpayer money in the first place).” (Source: “Revealed: Millions in taxpayer dollars sent offshore to Big Tech,” by Lloyd Burr, June 24, www.stuff.co.nz).

That is nothing more than tax dodging. It hurts our economy, it prevents us from spending on vital services and it weakens and diminishes. competing Kiwi companies who not only do not have a level playing field, they have hardly any type of field at all.