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New Zealand's longest-running online daily news and commentary publication, now in its 24th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

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Corporate Earth

14 July 2017

There was a time when each sovereign nation on the planet was in control of its own affairs.

Some chose democracy, some chose (or had imposed on them) dictatorship, others drifted between communism, socialism and autocracy.

Regardless of the form of government or management, all countries had one thing in common... self-determination.

This has been the way of the world, for better or worse, for quite some time now.

However, I believe we're seeing a dramatic change; a change which has been taking place over a period of a decade or so and which might challenge the concept of sovereignty and self-rule.

And it's all because of the Internet.

What the hell am I talking about?

I'm talking about the rise of global corporatisation.

This is the rise of huge multinational companies which not only have world-wide influence but also become so ubiquitous and pervasive that nobody can escape their influence or control.

Is this "the new world order" we've been warned about?

Could be.

Perhaps the most obvious of these global corporate influences are the likes of Facebook, Google, Apple and Amazon.

While it's tempting to think that these are just commercial entities which will never usurp the power of an independent nations own governance, I think you'd be dead wrong and there's evidence to prove this position.

Whilst you, I and every other individual in the country has to pay tax at the prescribed rate and in a way that sees as much as a third of our income handed over to the government, the three companies I've just mentioned seem to operate without paying any significant amount of tax.

If we tried this on the results would likely be a prosecution and bankruptcy or a term of imprisonment. We are not above the law.

So how do the multinational corporations get away with it?

Some say it's because they simply exploit the deficiencies of the law and are thus able to make huge profits without paying much (or in the case of Apple) *any* tax in many of the countries in which they trade.

I would say that this is a crock.

The IRD here in NZ seems to have the power to "assess" any taxpayer's tax liabilities and it then becomes the task of that taxpayer to disprove that assessment. Guilty until proven innocent.

A great example of this were the two dentists who set up a practice and opted to pay themselves a salary that was lower than "the industry standard". This is of course totally legal and it's certainly not uncommon for the founders of a business to draw only a token salary during the early years when that money is better being reinvested into growth.

However, regardless of the legality of this setup, the IRD contended that by paying themselves less than the going rate, these dentists were arranging their affairs so as to avoid tax. The matter went to court and the IRD won.

So why can't the IRD simply assess these global corporations who have massive sales in NZ but presently pay little or no tax? Why aren't they hit with tax bills that are far closer to reality than the tax returns the proffer?

That this does not happen proves my assertion that these corporations with their massive capital value and huge market reach are now effectively more powerful than our own government and have effectively gained the ability to dictate terms to this nation.

Some naive Kiwi politicians have suggested blocking Facebook unless they pay their fair (as opposed to "legal") share of tax -- but I think we all know that just like Google and Apple, Facebook has become an essential part of many Kiwi's lives and that leaves the government powerless to impose such sanctions.

In effect, we have lost our sovereignty in this matter. Global corporations are effectively doing whatever the hell they want.

I'm picking that this level of control and influence will continue to grow and the level of self-determination that individual sovereign nations have will be increasingly lost to the "indispensable" companies providing key services.

It is perhaps already too late for us to nip this in the bud. Imagine the public outrage if Google and Facebook were blocked. Imagine the howls in the streets if Apple's products were banned.

Right now we have no effective strategy for dealing with this threat and the longer we wait the more difficult it will be -- as people become increasingly dependent on the services being offered by these multi-national corporations.

What do readers think?

Will "the new world order" consist of a cartel of hi-tech companies which conspire to exert control over sovereign nations? Could it be that the Internet, which promised to be a powerful tool for freedom and democracy, eventually becomes the mechanism whereby we lost control of our own self-determination?

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