Treat high-end crime same as benefit fraud

Last updated 13:00 26/02/2013

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Editorial

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OPINION: Benefit fraud represents only a few crumbs in the trough of total spending on social security and welfare - but the very thought of it is significant enough to make many taxpayers choke.

Last year, $23.4 million of benefit fraud was detected in New Zealand, out of a total welfare budget of $23.2 billion. The two most common types are failing to declare income, and people who claim a single benefit while in a relationship.

The latter are the target of the latest Government attempt to tighten the welfare system, which is far and away the largest slice in the pie chart of Government spending. New legislation will provide for the prosecution of partners or spouses of people convicted of benefit fraud. They could face a $5000 fine or a year in jail if it is found they were aware their partner was fraudulently claiming a benefit.

Beneficiaries are often seen as a soft target, particularly by the National Party which has had them in its sights since the Muldoon days in the 1980s. Presumably the new legislation will include more general definitions of what constitutes a de facto relationship than currently exists.

Work and Income's investigations unit is already active, and beneficiaries are reminded regularly of the sort of offences it is looking for. They often must answer questions and sign declarations about their relationships, or lack of them.

It is inconceivable that they would not know of their obligation to advise the department if they do enter a new live-in relationship. Equally, it is hard to believe that the new partner would not also know of the rules - although that might prove difficult to establish beyond doubt in a court.

Regardless of that, the new legislation will add new vice-grips to the fraud investigators' toolbox. No doubt they will go looking for people who might be trying to exploit the system with new vigour.

Few voters will quibble with that. The welfare system is supposed to be a safety net, not a cash cow to be milked for life, and those who exploit it illegally ought to feel nervous. No criminal activity is to be condoned. Both parties to this sort of crime would typically share the benefits, however much doubt their lawyers might try to introduce in the event of a prosecution occurring. Why, then, should the partner of a beneficiary who has exploited the system not be treated as an accomplice?

However, the covert partners of beneficiaries are not the only people who might be - as the Government sees them - implicit in and benefiting from criminal acts. The partners of successful thieves, robbers and burglars, for example, are almost certain to knowingly share in their illicit gains.

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And, as the Government is targeting fraud with its new legislation, surely the partners of high-end white-collar criminals, tax-evaders and the like also can be seen to have lived the high life as a result of criminal activity. Might they not also be seen as accessories and targeted by state fraud-busters, in the interest of fairness? Otherwise, the new initiative will inevitably be seen as nothing more than beneficiary-bashing. Invidious as welfare fraud might be, there are bigger, if more difficult, targets around than that.

- The Nelson Mail

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