Jack Tame: Why rage about benefit fraudsters and not tax dodgers?

Author
Jack Tame,
Section
Opinion,
Publish Date
Saturday, 18 May 2019, 9:45AM
We scorn and hate on benefit frauds, but tax evasion is far more costly, writes Jack Tame. (Photo / Getty)

When I say beneficiary, what do you think?

Be honest, what’s the picture in your head? Is the little stereotype in your mind someone with what you consider to be too many kids? Someone lazy, spending all of your hard earned tax dollars on KFC, cigarettes, and SKY TV.

 Or do you take a more sympathetic perspective? Is it a person who may be down on their luck, who through whatever circumstances has found themselves seeking out a pretty grim and sparse existence, all the while hoping to be working and contributing like other members of society just as soon as possible?

I can’t imagine for a moment that there are many people who fit perfectly into either one of those crude descriptions, but I’m always interested why the dole-bludging stereotype is so prevalent in New Zealand.

The reason I bring it up is the Privacy Commissioner’s report this week into the Ministry of Social Development and those gross breaches of privacy when managing and investigating the cases of hundreds of people receiving benefits. The breaches were widespread and really serious. In what was maybe the most extreme incident, a cell phone provider handed over a person’s intimate photo to the ministry, who then presented it to the person involved. 

I know there will be people who for some reason think that it’s acceptable for a government department to be snooping around because these are beneficiaries, not people who are working.

Here’s one comment I read after the story broke: “Nothing wrong with keeping a close eye on people receiving free money from the tax payer.”

Where, then, is the same language, the same scorn, the same casual hate, for people who wriggle of out of paying tax in this country?

After the privacy story broke, I contacted Professor Lisa Marriott from the School of Accounting at Victoria University. She specialises in this area, and the latest numbers she have come from a couple of years ago.

In 2015-2016, welfare fraud cost New Zealand $24 million. That is $24 that you and I and every taxpayer funded. $24 million for which we were ripped off.

But in the same year, tax evasion in New Zealand amounted to $1.2 billion. Although of course the IRD doesn’t call it tax evasion: they call it ‘tax position differences,’ which Professor Marriott says more or less amounts to the same thing. 

Just consider that for a moment. On those numbers, the tax dodge in New Zealand was exactly 50 times higher than the cost of welfare fraud. FIFTY times.

So what’s the difference between the welfare fraudster and the tax dodger? Why do we rage about one and stay comparatively silent about the other. Both are stealing. Both are ripping us off. 

When, I wonder, was the last time a multi-millionaire and his crafty accountant was presented with a naked photo of himself by a government department?

I’m not saying there aren’t people on welfare who rip off the system. Every time we crudely stereotype beneficiaries as dole\-bludgers, we play into a really obvious double standard.

 

Kerre McIvor Mornings

Kerre McIvor Mornings

9AM - 12PM