MEDIA RELEASE

Game Over: Picking "Winners" Costs Taxpayers More than $15 Million

29 JANUARY 2016
FOR IMMEDIATE RELEASE

The Taxpayers’ Union has discovered that the failed Gameloft video gaming studio has received more than $15 million in corporate welfare grants from Callaghan Innovation since 2014. The French owned company yesterday announced that it will close operations in New Zealand, costing 160 jobs.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“This is yet another case of the Government trying to pick winners and failing. It’s time to pull the plug on these kind of reckless spend-and-hope subsidies.”

“Under this Government, ‘innovation' has become synonymous with taxpayer subsidies. There is nothing innovative about politicians and officials wasting taxpayer money trying to second-guess investors.”

“Assuming Gameloft spent the $15million on R&D, Kiwis don’t even own the intellectual property. It’s being packed up right now and taken back to the French parent company’s HQ. They’re laughing all the way to the bank."

In a report titled International Investment for Growth, published by the Government in October, Gameloft is featured as an example of the Government’s policy approach benefiting the economy and attracting high value investment.

“Steven Joyce has held up this company as an example of the Callaghan regime of corporate welfare working. This failure, effectively a $15 million gift to the French-owned company, suggests the so-called 'Business Growth Agenda' is an emperor with no cloths.”

In its most recent report on corporate welfare, the Taxpayers’ Union showed that corporate welfare under the National-led Government currently costs $1.344 billion every year, or $752 per household. If corporate welfare was abolished the company tax rate could be reduced from 28% to 22.5%.

“We again call on the Government to abolish its regime of corporate welfare and instead lower taxes, and get out of the way of New Zealand-owned businesses trying to get ahead,” says Mr Williams.

ENDS

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