[NZX: IFT] to point up the tax advantage enjoyed by the iwi-owned company.

Mr Seymour is at pains to be positive about the win: “Let’s be very, very positive toward Go Bus, toward Ngāi Tahu, toward Tainui, toward their shareholders … we should celebrate business success,” he tells NBR Radio’s Andrew Patterson.

However, he also suggests it’s an opportunity “to reflect on the fact they have a competitive advantage,” thanks to the 17.5% tax rate it qualifies for as an iwi-owned trust, versus the 28% tax rate shouldered by Infratil and other New Zealand companies.

“Certainly what I’ve heard informally from some of the other competitors who tendered is they saw themselves going in with several percentage points disadvantage in absolute terms – and that’s a huge gap as most people in business know.”

(NBR has approached Infratil for comment on this aspect of the tender and is awaiting a response.)

“But here’s the kicker,” Mr Seymour says. “Every New Zealand company competing in the global environment, which is where we want our businesses to ultimately be competitive, is facing that kind of disadvantage vis-à-vis other OECD countries every day of the week.”

Rather than call for the tax rate for iwi-owned entities to be increased, Mr Seymour says this is “a ‘teachable moment’ for why having lower taxes on capital actually makes businesses more competitive.”

According to Mr Seymour, “The 28% company tax rate means that New Zealand companies pay one of the highest effective tax rates on capital in the world, even allowing for imputations.

“ACT’s policy is to harmonise the company tax of 28% with the Maori authority rate of 17.5% over time,” he says.

Joyce’s ‘corporate welfare’ condemned
Mr Seymour also takes the opportunity to have a crack at what he characterises as Business Minister  Steven Joyce’s corporate welfare programme, which he sees as one of the impediments to a lower company tax rate.

“Frankly, I’m sick of seeing Mr Joyce running around the country posing with companies such as Gameloft, which quite happily take his money and run all the way to the bank …

“Our government would rather tax profitable businesses and give handouts in return for photo shoots to unprofitable but sexy businesses that do video game programming and launch rockets and so on and so forth.

“That makes good politics but it is not good public policy and it does not make New Zealand a more competitive business environment in the long term.”