by Susanne Kemp

The Metiria Turei case certainly brought a lot of mean-spirited people with double standards out of the woodwork.  People who vigorously defended John Key’s electoral fraud and Bill English’s rorting of the public purse for the polticians’ equivalent of accommodation supplement mounted their moral high horse to condemn Metiria Turei.

Unfortunately, people with these kinds of double standards have the power to inflict them on society.  The results were recently brought out vividly in a fascinating article in E-Tangata by Lisa Marriott, Professor of Taxation at Victoria University’s Business School.

For the past six years, Professor Marriott has been investigating the differential treatment of people committing welfare fraud with those committing tax fraud.  In the E-Tangata article, she reports some key findings regarding the state’s treatment of the two groups of people.  The state:

  • investigates “around 5 percent of welfare recipients in an average year, compared to around 0.01 percent of taxpayers.”
  • carries out more than ten times more criminal prosecutions of welfare fraudsters than tax evaders: “In a typical year, there are 600–900 prosecutions of welfare fraudsters and 60–80 prosecutions of tax evaders.”
  • Imposes a higher proportion of prison sentences on welfare fraudsters than tax fraudsters, despite welfare offending involving much smaller amounts of money: “For an average level of offending of $76,000, 67 percent of welfare fraudsters received a prison sentence. For an average level of offending of $229,000, 18 percent of tax evaders received a prison sentence.”

She also reports that tax fraudsters are far more likely to have some of what they owe written off.  People who cheat on welfare are also 12 times more likely to be served with deduction notices – ie that money will be taken out of their wages or bank accounts by their employers or banks to repay the state.  Moreover, partners of those cheating the welfare system can also be charged – this policy is not applied to any other type of financial offence.

She also notes the miserable level of benefits and what this might lead to, stating: “Paying benefits at a level that makes it difficult to survive — even if it’s for a temporary period — makes some of the reasons for welfare fraud seem not only justifiable, but potentially unavoidable.”

The full article by Professor Marriott is here:  https://e-tangata.co.nz/news/why-is-tax-evasion-treated-more-gently-than-benefit-fraud

Today, the times of “full employment” are long gone.  Official unemployment of 5-6 percent is now simply a structural reality of 21st century capitalism in this country.  Real unemployment is also much, much higher.  We need to demand “Jobs with decent wages or, if the system is so clapped out it can’t provide such jobs, then a living benefit”.  More broadly, we need to build a movement to fight for a society than can provide everyone with the means to live productive and socially engaged lives.

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