A double fisking for No Right Turn

No Right Turn has had a double fisking in the last couple of days. Cactus Kate, a tax expert, has fisked him over his claims of tax dodging by corporates (he failed to even read the notes to the accounts).

And on the other side of the spectrum constitutional law professor Andrew Geddis has politely rubbished his posts about the national state of emergency. We’ll start with that.

NRT blogged here and here that the calling of a national state of emergency is:

National states of emergency are intended for disasters affecting the entire country – wars, epidemics, that sort of thing. Instead, we’re seeing one cynically used for political purposes, essentially for spin. That is a gross abuse of power, and one we should not accept.


Make no mistake: this is a cynical political exercise, all about who gets the limelight (and hence the credit) in an election year. Again, it is a gross abuse of power. But entirely par for the course for National.

Now Professor Geddis has himself been very willing to criticise the Government when he feels they are acting inappropriately with regard to their powers. He criticised the Act responding to the last earthquake and the sacking of ECan. But in this instance he says:

To use a phrase much beloved of I/S himself, I call bullshit.

First up, the declaration of a national state of emergency does not mean that there is now a power to do all the horribly draconian things that he claims can be done in places like Invercargill, Whangarei or other places far from Christchurch. All the powers given under the Civil Defence Emergency Management Act 2002 (CDEMA) can only be exercised for the specific purpose of things like “saving life, preventing injury, or rescuing and removing injured or endangered persons”, or “prevent[ing] or limit[ing] the extent of the emergency”.

There is no way that these purposes can be said to exist outside of the immediate environs of Christchurch, so the specter of the police “clos[ing] public spaces in Invercargill” or the like in the wake of this declaration is a complete red herring.

So that puts paid to the so called gross abuse of power.  And as for why make it a national state of emergency:

But what about emergency situations where the resources of a single Group are inadequate to respond? There, help from other Groups may be needed. But getting that help requires those in charge of the affected Group to coordinate with those in charge of others, which is yet another task on top of the many they will have already. Furthermore, all they can do is ask for help – which other Groups may or may not be able to give, depending on availability.

However, now that there is a state of national emergency, two things can happen. First, the Director of Civil Defence Emergency Management can take over the coordinating role between different Groups and centralise that process. Second, the Director can instruct other Groups to initiate their own emergency management plans and thus release resources to help Canterbury.

These powers may not be as earth shattering as empowering the police to shut down central Invercargill, but neither are they insignificant. Indeed, it isn’t going overboard to say that the fate of people’s lives may depend on the bureaucratic niceties involved in the declaration of national emergency.

Geddis concludes:

So, like I say – I/S’s posts regrettably are bullshit. I rather fear that he’s fallen victim to exactly the disease he accuses John Key and National of … being so partisan in outlook that everything must have a motive other than the obvious one.

Sometimes even politicians just want to do the right thing.

Cactus Kate is equally blunt when it comes to I/S’s financial literacy. He blogged:

Infratil [PDF] reported a pretax profit of $106 million, but paid only $11 million in tax – an effective rate of 10.4%

This was part of a series to make everyone think that all these evil corporate are evading tax and not paying their fair share. He even got Trevor Mallard blogging in agreement, which tells us much about Trevor’s financial literacy. The difference is NRT is just a blogger, and Trevor was once an Associate Finance Minister.

Cactus Kate explains:

If you click on Infratil’s accounts for example (they are the only one I could find with a comprehensive explanation of their tax balances) on page 53 you will see that here they take the net profit before tax and show a line-by-line adjustment on the tax numbers. The explanation of deferred and current tax is even made by the company in its accounts at page 45 in relatively simple terms.

The explanation for Infratil not paying the full company tax rate is a massive $30.4 million write-back in the “Net investment realisations/impairment”.

It had absolutely nothing to do with tax avoidance, evasion, shirking of their duty or offshore structuring. No cheating. All accounts are audited and signed off by professionals using NZ accounting standards.

And the killer blow is:

If NRT looked at pg 53 he will see that for the 2009 year Infratil made a net loss of $93.8 million before tax, yet had a tax expense of $34.6 million? How can a company making a loss NRT and pay all that tax? Based on the raw presentation of his data this makes no sense at all does it? Why? Because you have to read the data contained in the tax reconciliation and interpreted what has happened in the company.

Perhaps before No Right Thought engaged his fingers defaming a very wide range of directors in New Zealand as “cheating” on company taxes, he may just like to learn how to read and engage his brain and find out just why each corporate hasn’t paid the full tax rate for that particular year.

When you get fisked by both Cactus Kate and Andrew Geddis/Pundit in the same week, you’re not having a good one.

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