The receipt the government can’t produce
How much taxpayer money does the New Zealand government spend advertising on Google and Meta? The honest answer is that nobody knows, and the government itself has admitted as much.
A March 2026 OIA response from Inland Revenue provides the clearest window into the problem. IRD’s direct spend with Meta in calendar year 2025 was just $35,941, against total advertising and social media spend of $1,284,661. But the department uses advertising agencies to manage campaigns, making it “impossible to provide a complete breakdown” of what flows to Google, Meta, and TikTok.
That caveat is the whole story. If a single mid-sized agency like IRD cannot account for its full digital ad spend, the aggregate across every ministry, SOE, and Crown entity is almost certainly tens of millions flowing annually to platforms that pay negligible tax here. And the government has no mechanism to tell the public where the money goes.
Billions in revenue, millions in tax
The platforms receiving that advertising spend are not paying their way. In May 2025, Newsroom reported that Google, Amazon, Facebook and Tesla paid a combined $8 million in tax on approximately $3 billion in New Zealand revenues. The mechanism is consistent: earn revenue locally, transfer the bulk offshore as intercompany service fees, report minimal taxable profit.
Google NZ earned over $1.1 billion from Kiwi advertisers and cloud customers in 2024 but transferred $1.05 billion to a Singapore sister company, booking a $4.3 million tax liability. Facebook NZ offset $163 million in local revenues by paying $157 million to an Irish intermediate company, reporting a $939,000 tax bill. Amazon Web Services NZ earned $425 million in net sales but paid just $1.8 million in tax.
A Kiwi retailer or media company paying the standard 28% corporate tax rate is competing against entities operating at effective rates below 1%. That is not a market. It is a subsidy.
The remedy that got shelved
The previous Labour government designed a tool for this. A Digital Services Tax, levied at 3% on qualifying revenues, was estimated by Treasury and IRD to collect $86-90 million per assessment year, with a four-year haul of $479 million. In May 2025, Revenue Minister Simon Watts dropped the bill, citing the risk of US tariff retaliation under the Trump administration.
The decision was understandable in trade terms but left a significant gap. New Zealand now has neither a digital services tax nor a news media bargaining code. Australia has both.
Local media pays the tax and carries the burden
New Zealand’s digital advertising market hit $2.967 billion in 2025, up 12% year-on-year. Search alone, dominated by Google, accounted for $1.44 billion. The overwhelming share of that growth accrues to platforms, not to local publishers.
IRD’s own spending illustrates the gap. The department spent $406,940 with NZME and $103,779 with Stuff in 2025, a combined $512,372 with identifiable NZ media companies. Those publishers pay full corporate tax, employ New Zealand journalists, and bear the cost of civic reporting. The platforms scraping and redistributing that content operate under a fundamentally different cost structure.
Media executives have been making this argument for years. In RNZ Mediawatch coverage, News Publishers Association public affairs director Andrew Holden said Meta and Google had taken news content created and paid for by others and leveraged it into unassailable market share. The Fair Digital News Bargaining Bill, which would have required platforms to negotiate payment for news content, has stalled alongside the DST.
The competitive neutrality argument business owners should care about
This is not a media industry sob story. It is a question of whether the government should be directing public money to entities that have structured themselves to avoid contributing to the tax base those dollars come from.
The IRD OIA response reveals a government that cannot track its own advertising flows. The Newsroom analysis shows platforms paying effective tax rates that no domestic business could replicate. The shelved DST shows a government that identified the problem, designed a solution, and then walked away from $479 million in revenue.
At minimum, Wellington should be able to tell the public how much taxpayer money flows to offshore platforms each year. That it cannot is not a data problem. It is a priorities problem.
Sources
- Inland Revenue OIA Response: Breakdown of spend on media companies (2026-03-16)
- Newsroom: Dropping digital tax frees big tech to ship $4b revenues offshore (2025-05-22)
- IAB NZ: Q4 CY 2025 Digital Advertising Revenue Report (2026-03)
- Treasury/IRD Regulatory Impact Statement: Digital Services Tax (2023-08-31)
- RNZ Mediawatch: Media bosses urge MPs to level playing field with big tech