What you need to know

• Local Google chief Mel Silva says Australia's regulatory stability is a problem, in a veiled swipe at the news media bargaining code.
• Likewise there firm has issues around taxation.
• But she said the business still wants to invest locally due to "relative" political stability and access to talent.

Local Google chief Mel Silva has taken a veiled swipe at Australian regulators, along with the country’s tax regime whilst speaking on a panel at the Tech Council Summit in Brisbane.

Responding to a question about the factors that influence local investments by multinational businesses, Silva told the delegates, “Each vendor has its variety of different things, but I'll call out just a couple. One is, you do need a sense of regulatory stability. To be frank [and] provocative there have been a couple of instances where we've seen regulations that impact the tech sector that have been put in place super quickly, [and] not with the best amount of evidence based policy settings.”

Silva did not mention any specific regulations, but Google clashed with the previous government over the media bargaining code it put in place to compensate media businesses for the content Google hoovers up and sells advertising against via its search business.

The company, as the world's leading adtech supplier, also has a strong vested interest in the changes to the Privacy Act proposed by the Attorney General’s department earlier this year, and to which Google recently responded.

And, of course, there is the overall and ongoing review into Digital Platforms in Australia where Google’s role occasionally takes star billing.

“It just leaves a dirty taste in the mouth and it makes you go, ‘Well, let's try it [overseas]," she said on the issue of regulatory stability. "And then maybe Australia can be second or third.”

She also flagged concerns about taxation. “And tax plays into that as well, particularly when you're looking at sites for data centres and things like that.”

Google, like many international businesses structures its tax in a way that allows it to pay less via internal transfers to lower tax jurisdictions. 

As Michael West Media (MWM) reported earlier this year, “Google Australia has gone back to paying belly-button lint in income tax. This shabby performance despite payments from Australian customers surging to a record $8.4bn last year.”

MWM analysed Google’s cash flow documentation in its government filings and found the company only paid $45m in tax on revenues of $1.9bn, and that those revenues were themselves considerably lighter (to the tune of $6.4bn) than the total Australian take, thanks to the magic of inter-company transfers – what Google describes as “service fees” according to the report.

What have the Romans ever done for us?

But apart from being expected to follow the rules and contribute to the society, Silva did have some positive things to add about Australia's attractiveness for investment.

“We've got relatively politically stable environment, we've got great talent. There is a huge amount of upside for investing in Australia. And it continues to be a place where Google wants to invest," she said.

“The biggest pitch I've recently done is for the billion dollar investment into Australia, and this is building out a research hub with real fundamental research being done right here in Australia, we're about 18 months into that.”

Silva said that involves partnering with organisations like the CSIRO and Queensland University on work that "on the surface looks like these small Australian problems that have been solved with great tech and insight from the ground up. When in fact we know these are absolute breakthroughs in how that technology can be used in the future”.