Media mogul Rupert Murdoch yesterday criticised excessive financial regulation as stymieing free markets and urged Group of 20 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 a meeting of the Business 20 leaders in Sydney, a day after his Twenty-First Century Fox Inc made an audacious $80 billion offer for Time Warner Inc.
“That is just in America. Don’t even get me started on the European Union.”
The B20 was set up in 2010 to give policy recommendations on behalf of the international business community to the G20. Business leaders meeting in Sydney are looking to influence the outcome of the G20 Leaders Summit in Brisbane in November.
“I believe that 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 per cent above trend over the next five years, the G20 is tackling corporate “profit shifting”, which has allowed multinationals such as Starbucks Corp, Google Inc, Apple Inc and Amazon.com Inc to avoid paying taxes.
G20 finance ministers in February 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 2015.
Obama, meanwhile, earlier this year proposed tightening restrictions on US multinationals that shift their tax domiciles abroad in his 2015 Budget. Obama wants to raise the minimum level of foreign ownership in a newly inverted holding company to 50 per cent from about 20 per cent, making the deals more difficult to carry out.
“Do we really expect overseas companies to voluntarily bring profits back to be taxed at 35 to 40 per cent in the US, when the corporate tax rate in Ireland is 12.5 per cent?” Murdoch said. “This is not the way to achieve economic growth.”
Murdoch did not refer to the Time Warner bid, which was rejected by the US conglomerate whose assets include the HBO cable channel and the Warner Bros movie studio.