Deciding how much lolly taxpayers should toss at billionaires like Larry comes down to balance

Uh, oh. A very tart email has been despatched by Steven Joyce, Lord High Most Things in your splendid National-led Government.

Steven is far from pleased at the previous post on Alf’s blog.

That post was critical of the boat building industry for pleading for more swill from the corporate welfare trough after things went sour for us in San Francisco.

The Marine Industry Association was aiming to double the sector’s exports to more than $1.3 billion in the next seven years, but this target was largely based on the America’s Cup being hosted in New Zealand.

So they had backed the wrong boat.

That was much too harsh, Steven has told your hard-working member for Eketahuna North.

And it was way out of line with the government policy Alf is supposed to be promoting.

The boat building industry is precisely where taxpayers’ money should be going.

In fact, it’s precisely where taxpayers’ money has been going.

You see Alf, Steven explained, yacht racing is like the movie business.

It is a sport for wealthy people, and wealthy people are apt to vote for us.

It gives Cabinet ministers wonderful photo opportunities, showing the voters how important they are – which is why half them were in San Francisco last week and why so many of them are pictured mixing with the stars at the premieres of movies about little people made by that bearded bugger who has a property further south from Eketahuna in the Wairarapa.

And it gives Kiwis a “feel good” buzz when the whole world is talking about Team NZ, or The Hobbit, or whatever.

The glamour element is important.

So you put a proper dollop of public money into events that will generate glamour, rather than into providing more ear grommets or projects to save some threatened indigenous snail.

And you do this even though the beneficiaries already have pots of money, like Hollywood movie moguls and – can this true? – the wealthiest Jew in he world.

And – you may ask – who is that?

Why, none other than American billionaire Larry Ellison, and our money was used to help Oracle beat Team NZ.

Yep. He won it with more than $1 million in grants and tax breaks for the New Zealand-based Core Builders, the company that built most of the winning boat.

The NZ Herald tells us here of the largesse we ladled to Larry.

The company also received generous tax breaks, paying zero income tax for three years between 2009 and 2011.

Financial statements also show employees and contractors will receive $2.3m in bonuses from the Oracle victory. Ellison’s net worth is $53 billion, according to Forbes magazine.

If Alf was running the show this financial help for Oracle would be regarded as high treason.

But Alf apparently is looking at things from the wrong perspective.

One of Steven’s underlings over at the ministry has helped put him on the straight and narrow.

Trade and Enterprise customer director Adam Bennett said: “In a way, flags on the two boats tend to confuse people. In reality, this was always New Zealand’s cup, it’s just there was one flag on one and a different flag on another.” He said the $1m grant allowed Core Builders to develop expertise in civil infrastructure, aviation, energy and entertainment.

The company was working on “top secret but high profile” projects, he added.

The Herald story says Trade and Enterprise spent $4m promoting Kiwi business in San Francisco, on top of the $36m spent by the Government on the Team New Zealand campaign.

As for the tax breaks for Larry’s NZ subsidiary, the reasons are being kept quiet.

Inland Revenue refused to say why Core Builders had been exempt from paying tax for three years.

Spokeswoman Sarah-Lee Ryan said: “Generally speaking … losses may be accumulated in start-up phase then carried forward and offset against income earned in later years.”

The company’s financial statements cite its principal activities as “composite construction and assisting its parent company in defending the America’s Cup yachting trophy”.

Core Builders Composites changed its name from Oracle Racing a few years ago and America’s Cup chief executive Stephen Barclay is the director of the company.

Oracle has reportedly spent $150m in New Zealand, generating about $30m worth of exports.

That’s great.

And the buggers who have benefited from that $150m of Oracle spending may well have been chuffed that Team NZ did not win back the cup.

But Alf got no feel-good buzz from watching Larry’s boat beat ours – or rather, from watching the defeat of the boat flying the NZ flag and kept afloat with the bigger dollop of taxpayers’ money.

Not that this will register with Steven.

He is musing on more government funding for another America’s Cup bid (see here), although he says the decision could depend on what sort of regatta is held and where it takes place.

Mr Joyce, who returned to New Zealand from San Francisco yesterday, told TV3’s The Nation this morning the Government was open to funding the team again.

“We’re keen provided there’s something that stacks up. You don’t just write a blank cheque,” he said.

“We haven’t said yes yet. There’s a whole lot of variables like what sort of race is it going to be, where’s it going to be, is Team New Zealand really wanting to do it again.
“We’re keen provided there’s something that stacks up. You don’t just write a blank cheque,” he said.

“We haven’t said yes yet. There’s a whole lot of variables like what sort of race is it going to be, where’s it going to be, is Team New Zealand really wanting to do it again.

“There’s mixed signals out of there which I think is just because they’re exhausted. They’ve put everything into this – they just need a bit of time to get their heads together on it.”

Mr Joyce said it also depended on the team’s sponsors, as the Government’s contribution was not the biggest by any means.

“They’ve made some pretty big investments, so I think everybody just needs a little bit of time.”

He said the decision should not take “forever” but could be made within a few months, and possibly sooner than that.

“It also doesn’t have to be done on day two, so it’s a little bit of a balance.”

Yep. And we know which way things are likely to tip when Steven is involved in the balancing.


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