Bevan Hurley

Bevan Hurley is the Herald on Sunday chief reporter.

Kiwis subsidised Ellison's victory

Company that built much of the winning boat received grants and tax breaks but Oracle has reportedly spent $150m in NZ.

Jonathan Coleman (left) with Iain Murray, Jimmy Spithill, Mark Turner and Len Brown at the commissioning of the first AC45 yacht in 2011. Photo / NZPA
Jonathan Coleman (left) with Iain Murray, Jimmy Spithill, Mark Turner and Len Brown at the commissioning of the first AC45 yacht in 2011. Photo / NZPA

Kiwi taxpayers subsidised American billionaire Larry Ellison's Oracle victory in the America's Cup with more than $1 million in grants and tax breaks for the New Zealand-based Core Builders, the company that built most of the winning boat.

The company also received generous tax breaks, paying zero income tax for three years between 2009 and 2011.

Financial statements also show employees and contractors will receive $2.3m in bonuses from the Oracle victory. Ellison's net worth is $53 billion, according to Forbes magazine.

Air New Zealand also helped the US team with to make their daggerboards.

Trade and Enterprise customer director Adam Bennett said: "In a way, flags on the two boats tend to confuse people. In reality, this was always New Zealand's cup, it's just there was one flag on one and a different flag on another." He said the $1m grant allowed Core Builders to develop expertise in civil infrastructure, aviation, energy and entertainment.

The company was working on "top secret but high profile" projects, he added.

Trade and Enterprise spent $4m promoting Kiwi business in San Francisco, on top of the $36m spent by the Government on the Team New Zealand campaign. Inland Revenue refused to say why Core Builders had been exempt from paying tax for three years.

Spokeswoman Sarah-Lee Ryan said: "Generally speaking ... losses may be accumulated in start-up phase then carried forward and offset against income earned in later years."

The company's financial statements cite its principal activities as "composite construction and assisting its parent company in defending the America's Cup yachting trophy".

Core Builders Composites changed its name from Oracle Racing a few years ago and America's Cup chief executive Stephen Barclay is the director of the company.

Oracle has reportedly spent $150m in New Zealand, generating about $30m worth of exports.

- Herald on Sunday

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a5 at 01 Aug 2014 23:40:52 Processing Time: 802ms