Media mogul Rupert Murdoch yesterday criticised excessive financial regulation as stymieing free markets and urged the Group of 20 (G20) governments to “take a back seat” to allow businesses to drive economic growth.
Murdoch also said US President Barack Obama was penalising businesses by cracking down on so-called profit shifting by major corporations to countries with lighter tax regimes, a technique that is also in the sights of the G20.
“My blood pressure goes up when I think of the number of local, state and federal regulations we have in our lives today,” Murdoch told Business 20 (B20) leaders in Sydney.
The B20 was set up in 2010 to give policy recommendations on behalf of the international business community to the G20. “Business does have a role in shaping public policy, mainly in helping limit the size and scope of government,” Murdoch said.
“For businesses large and small, there’s simply too much red tape, too many subservient politicians stifling economic growth and entrepreneurism.”
Along with targeting growth of 2 percentage points above trend over the next five years, the G20 is tackling corporate “profit shifting”, which has allowed multinationals such as Starbucks, Google, Apple and Amazon.com to pay less tax.
In February G20 finance ministers endorsed a set of common standards for sharing bank account information across borders, with automatic exchange of information among G20 members to take effect by the end of next year.
Earlier this year Obama proposed tightening restrictions on US multinationals that shift tax domiciles abroad in his 2015 budget. He wants to raise the minimum level of foreign ownership in a newly inverted holding company to 50 percent from 20 percent, making the deals more difficult to carry out.
“Do we expect companies to voluntarily bring profits back to be taxed at 35 to 40 percent in the US, when the corporate tax rate in Ireland is 12.5 percent?” Murdoch asked. “This is not the way to achieve economic growth.” – Reuters