Overview

Letter to the Sydney Morning Herald in response to article on 24 August 2013

26 August 2013

Dear Sir 

Mr West's most recent opinion piece on Sydney Airport and Macquarie Group ("Sydney Airport and the Magical Mystery Tour", Saturday 24 August), typically ignores a number of fundamental facts that wholly undermine his premise.

In claiming that Sydney Airport does not pay tax, Mr West has chosen to ignore that in the 2013 financial year alone, Sydney Airport is expected to pay more than $450 million in unfranked distributions to investors.  The majority of the airport’s investors are Australian and so will pay Commonwealth taxes on those distributions. Foreign investors would be expected to pay withholding tax. Macquarie Group will pay corporate tax of approximately $25 million on the $83 million of the expected 2013 distributions from Sydney Airport. Investors, from these distributions in the airport, have contributed many hundreds of millions of dollars in taxes over the past decade.

The tax treatment for Sydney Airport is the same as for investors in most other listed infrastructure entities and real estate investment trusts (REITs) in Australia, the US and other OECD countries.

Most of the $54 million transaction costs to which Mr West refers were incurred in NSW Stamp Duty (a state-based tax) and not on fees as Mr West asserts.

Mr West has also chosen to ignore that since 2003, more than $2 billion dollars of new capital investment has been made to improve the airport which since that time is a greater level of investment than in any other airport in Australia. Given government finances, it is hard to imagine this expenditure would have taken place if the airport were retained in government ownership. Consequently, Sydney Airport remains a major employer in NSW, Australia’s international gateway and a driver of significant economic activity.

Finally, Mr West claimed "Macquarie owns the airport".  It is a fact that Macquarie Group does not own Sydney Airport and has not managed the facility since 2009.

These facts are on the public record. 

Regards

 

Patrick Upfold
Chief Financial Officer
Macquarie Group Limited