Monday, October 20, 2014

National doesn't care about crime by the rich

National likes to make a lot of noise about benefit fraud. Meanwhile, they've buried a report into the social costs of economic crime:

At the beginning of last year the then Minister for the SFO, Anne Tolley, was reported as saying that a number of Government ministries had been working for two years on a report quantifying the cost of economic crime and it would be presented to Cabinet in the near future.

But the report did not make it to Cabinet and was not released.

Radio New Zealand obtained a draft copy of the SFO's report under the Official Information Act. The methodologies that would have made it possible to calculate the total costs were redacted.

However, Radio New Zealand has also obtained a copy of the report with the estimated costs of the various types of economic crime included - which put the total cost of economic crime at between $6.1 and $9.4 billion.

To put this in perspective, in 2006 Treasury estimated the total cost of all crime in New Zealand at ~$9.1 billion (this includes about a billion for fraud). So, fraud by the rich costs us about the same as all the burglaries, drug deals and murders combined.

Its easy to see why National buried this. Tax fraud costs us ~$2 billion a year. White collar fraud across the private sector costs us ~$3.2 - $5.1 billion. These activities are carried out overwhelmingly by National's donors and cronies, and are vastly larger than the ~$80 million of estimated welfare fraud. Keeping us in the dark reduces the risk of being held accountable for this failure, reduces the pressure for them to act against their friends, and allows them to focus on kicking the poor. And if the cost is that the state is robbed of the sort of revenue which would allow it to end child poverty, well, they don't really care about that.