Adobe price drop pulls Conroy and O’Farrell together

Julian Bajkowski

Communications Minister Senator Stephen Conroy and New South Wales Premier Barry O’Farrell have celebrated Valentine’s Day by burying the hatchet and welcoming the expansion of software giant Adobe’s operations in Sydney with a cross-party bro-mance.

Stepping out at the opening of Adobe’s new offices in downtown Darling Park, the pair put niceties to the fore… even though the federal government haranguing Adobe (which makes Acrobat, Photoshop and the relentlessly updating Flash software products) over price-gouging and tax minimization and the state government seeking deep price reductions.

“I am here to share the love on Valentine’s day, I’m sharing the love with Senator Stephen Conroy… that’s not something I’d normally say eight months out from and election campaign that apparently hasn’t started,” Mr O’Farrell beamed.

However Mr O’Farrell exercised restraint by not acknowledging the National Broadband Network, which is being rolled out at speed into regional areas to the pleasure of local governments fed-up with decades of telecommunications neglect.

Senator Conroy said that Adobe’s “ongoing investment shows confidence in the digital economy, quality of Australian workforce and their skills.”

The bi-partisan air-kiss came after Adobe became the first major multinational software company to give tactical ground to the federal government by reducing the online price-tag of its creative suite of products after being summonsed to federal parliamentary inquiry on bloated software prices in Australia.

Adobe’s much larger silicon valley cohorts, Apple and Microsoft, have also been summonsed to appear, but seem to be holding out on sacrificing lucrative mark-ups of as much as 50 per cent for Australian prices compared to the US.

All tiers of government have a direct interest in driving down software prices of mainly US-headquartered companies because it offers them substantial savings at a time when taxation revenue is sliding thanks to a soft economy.

The issue of taxation is also a sore-point for treasuries and revenue authorities because most technology companies are vigorous practitioners of transfer-pricing accounting mechanisms that shunt profits to destinations with the lowest tax rates – a manuovre that arguably gives multinational companies a distinct advantage over local operators that are forced to pay the full rate of tax.

That point was driven home by the very location of the launch of Adobe’s new gleaming white offices.

The flash new digs were previously the corporate headquarters for locally listed e-health stock iSoft that was bought by outsourcer Computer Sciences Corporation after in a bitter hostile takeover.

Mr O’Farrell joked that taxes paid by companies like Adobe ultimately helped pay for hospitals, schools and police.

He said that one day, such taxes would “deliver you the rail services that you deserve, not the services that some of you experienced last night.

“That is a serious commitment,” the Premier said.

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