Archive for February, 2014

Arrow Pharm: socialising losses, privatising profits.

February 6, 2014


Actavis, Arrow, Watson: the same shareholders, same US company. These have benefited over the years from massive tax breaks, tax holidays and tax incentives, and other incentives such as payments for training and R&D out of national funds. Did you know that there are schemes whereby such companies get a refund of the 35% corporate tax they pay on profits, on distribution of these profits to shareholders, which means that they effectively pay only 5% in tax?

In other words they benefited from ‘corporate welfare’, which incentives are admittedly sometimes necessary (emphasis on ‘sometimes’!).

The company is doing very well with revenues and profits increasing year after year, but corporate greed is never satisfied. To make even more profits they will now shed 110 workers in Malta (not to mention in other countries). Is it time to ask for them to pay back the tax breaks and other public funds they sucked up?

The Arrow Pharm story is sadly another textbook case of corporate greed. Socialising losses and privatising profits.

This case calls for the implementation of a Financial Transaction Tax across the EU. We must make these companies carry the costs to society of their greed – the shedding of workers in the pursuit of ‘share-value’. Speculation on the financial markets is having its effects – even here in Malta. Government intervening to find replacement jobs is all well and good – here again it is the ‘losses’ being carried by society (as represented by Government) – but the discussion and action must go beyond this. The FTT is one concrete measure.