Government spends many millions advertising on Google and then complains when Google only pays $74,176 in tax.

I read articles over time where Australian politicians complain that large multinational companies use tax minimisation strategies to reduce their tax liability in Australia.

 

For example it is estimated that Google earns around $2 billion in revenue a year from Australian advertisers and yet only paid a little over $74,000 in tax.

Google Australia declared a loss of $3.9 million last year, and paid just $74,176 in Australian tax... Read More

The politicians have a very simple solution. Redirect the millions of dollars (and if that figure of $2 billion a year is correct we could be talking about hundreds of millions spent by government and government agencies) to local businesses.

When Google wants to promote itself you can see their advertisements around everywhere and they’re not generally using the Google service. Letter drops I receive regularly in the post. Signs at Southern Cross station. A $300 million dollar deal (reportedly) with Mozilla (Firefox) to send 15-25% of internet search traffic Google’s way. If Google are using other advertising media to get their message across isn’t that perhaps what the government should also be using.

The best thing with not using Google is the government avoids click fraud which is estimated to a be a multi-billion dollar problem for Google. Click fraud is when people or organisations have a site and generate income from either their own activity of the activity of others such as clicking on ads on their site and not clicks by potential customers. I’ve been told of ordinary people doing this type of activity so you can only imagine how much activity is occurring due to organised crime.

If the government isn’t happy the solution is easy. Don’t advertise on Google. Google will quickly come around and pay a fair and reasonable amount of tax if that happens, and if they don’t, the government is putting their advertising dollar in to assist the local economy by supporting local advertising services. To me that’s a win either way.

My own tests of paid Google advertising is it didn’t yield any result. Those I’ve spoken to, with the exception one person, have had a similar experience. That person when I last heard, had suspended their Google advertising.

- Kelvin Eldridge
www.OnlineConnections.com.au
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