Today, the Dominion post reported Economy's $7 billion black hole:
Why do we hardly ever hear about the corporate crime that is by far the biggest contributor to lost taxes? Adam Feeley the Chief Executive of the Serious Fraud Office writes (PDF):
Cash trade jobs, crimes, wages under the table and online trading are costing the Government more than $7 billion a year in lost tax.
According to research by the international Tax Justice Network, that is equivalent to 44 per cent of New Zealand's health budget. It estimates a "shadow economy" worth more than $20b makes up 12.4 per cent of gross domestic product.
The total tax lost each year from people who either evade tax or move it to tax havens is $7.1b, just behind Bulgaria and just ahead of Azerbaijan.
Why do we hardly ever hear about the corporate crime that is by far the biggest contributor to lost taxes? Adam Feeley the Chief Executive of the Serious Fraud Office writes (PDF):
In January 2011, the UK National Fraud Authority published its Annual Fraud Indicator which placed the annual cost of fraud in the UK at over NZ$80 billion. The Authority made the observation that “In this time of austerity, it is money we can ill afford to lose.”
It would be alarmist to say that New Zealand faces a problem of the same scale. Equally, it would be unwisely complacent to assume we do not have a significant problem with fraud. New Zealand has not had the depth and breadth of academic study and policy research in the drivers and cost of financial crime, that has occurred in recent years in many other countries. Without such research, we can only assume that the emerging issues and scale of fraud being experienced internationally is affecting the New Zealand economy in a broadly comparable manner. And, like the UK, it is a loss that New Zealand cannot afford.
Why hasn't there been any proper academic study into how much white collar crime is costing New Zealand? One can only asume that the governments complacency is due to some officials being corrupt.
