The Rich Get Richer
Published on September 26th, 2018
A New Zealand company owned by multi-billionaire America’s Cup arch-rival Larry Ellison, and which has Kiwi Russell Coutts on the board, is getting more taxpayer funding.
Warkworth-based Core Builders Composites, which began in 2001 as the build facility for Ellison’s five America’s Cup campaigns, has successfully negotiated a two-year extension to its Callaghan Innovation research and development grant. It got $1.5 million of government funding in 2016 and almost $1 million in 2017.
Core Composites is 100 percent-owned by US-based Oracle Racing Inc, which in turn is owned by a Larry Ellison trust. Ellison, who co-founded and chairs technology giant Oracle Corp, is number 10 on Forbes’ top 20 billionaires of 2018 list, worth $US58.5 billion.
By contrast, Coutts is worth a paltry $65 million, according to NBR’s Rich List. He became a Core Composites director early last month.
Core Composite’s raison d’etre over the years has been to help make boats for Ellison/Oracle yacht races – particularly for America’s Cup campaigns. Originally located in the USA, the company moved to New Zealand following Oracle Team USA’s successful America’s Cup challenge in February 2010, where CBC established a permanent, state-of-the-art composites tooling and manufacturing facility in Warkworth, north of Auckland.
Its only business, according to its 2009 annual report, was “assisting its parent company in challenging for the America’s Cup”. Following their win in 2010, the team caused widespread despair in New Zealand by coming from seven points down in the 2013 cup to beat Team NZ.
However, Ellison, Coutts and their boat lost to New Zealand last year in Bermuda. And Coutts, who is Oracle Team USA chief executive but led Team NZ to two America’s Cup victories in the past, said they wouldn’t have a boat in the 2021 series in Auckland.
In 2014, Core received a three-year Callaghan Innovation Growth Grant, allowing it to claim a portion of its R&D expenditure – normally between 20 and 40 percent. Its 2017 annual accounts show these taxpayer-funded grants were worth $2.5 million in the two years 2016-2017. Callaghan has now extended the grant to June 2019.
Core didn’t reply by publication deadline to BusinessDesk’s request to talk about what it will do with the next tranche of Callaghan R&D money. However, in 2015 it said it was diversifying into composite materials and tooling – beyond racing yachts. Its website mentions prototypes for the Auckland harbour bridge SkyPath clip-on as an example, but accepts the America’s Cup is “never far from our minds”.
Previously vocal Labour Party critics of the grants are staying mum on the issue. Asked in 2015 about taxpayer funding being used to help an offshore-based America’s Cup rival, Labour’s then sports and recreation spokesman Trevor Mallard said Kiwis would be “horrified” to know they were backing Oracle and Larry Ellison.
Now speaker in the Labour-led government, Mallard wasn’t commenting on why his government was continuing to fund Core Builders Composites. And his colleague, sports and recreation minister Grant Robertson – also finance minister – didn’t respond to BusinessDesk either. Callaghan Innovation didn’t respond by publication deadline.