Equal treatment around taxation, pensions, and sentences for financial crimes reveals a lot about New Zealand society, says Lisa Marriott.
Social justice is at the heart of research by Professor Lisa Marriott, who is a Professor of Taxation at Te Herenga Waka’s Wellington School of Business and Government.
“How we treat people speaks to how society works and to what we want our society to be,” she says.
"In some cases, it’s perfectly fine to treat people the same, but in others it’s actually fairer to treat people differently."
Most years, there are many more cases of tax evasion than welfare fraud in Aotearoa.
Research by Professor Marriott shows welfare fraudsters are many times more likely to be prosecuted than tax evaders—what does that tell us about equity in Aotearoa?
She has extensively researched records and found stark differences in the way white-collar and blue-collar criminals are treated in the courts.
“We investigate and prosecute a lot more people for welfare fraud than we do for tax evasion. For serious offending, if you’re a tax evader you’ve got about an 18 percent chance of going to prison, whereas if you’ve committed welfare fraud there’s a 70 percent chance you’ll end up behind bars—that’s in spite of tax evasion being at least 30 times more damaging overall than welfare fraud to the economy.”
Professor Marriott has looked back over 30 years of prosecuted cases from the Serious Fraud Office, and analysed the factors considered in the court reports relating to aggravating or mitigating factors for these top-level financial crimes.
White-collar criminals really do seem to get privileged treatment in the justice system.
Lisa Marriott
Professor of Taxation
“When you compare the comments about white-collar criminals—references to things like their good character and community standing—they’re completely different to the comments made about welfare fraudsters, who are described in very negative, highly judgemental ways. There seems to be a lot of justification for white-collar crime, even though it’s hardly justifiable because it’s motivated by greed.”
Whether you’ve stopped working or still have a full-time job, whether you own one or more properties, or whether you have other assets and sources of income, every New Zealander who meets the residency test receives a pension when they turn 65.
“All other state benefits are provided on a basis of need, so why should the pension be any different?” says Professor Marriott.
We are not a terrifically wealthy country with unlimited resources—we have to make sensible decisions about how we spend taxpayer money. So why do we continue to provide New Zealand superannuation to people who simply have no need for it at 65?
Lisa Marriott
Professor of Taxation
She thinks Aotearoa needs to have a conversation about fairness issues around superannuation when it comes to life expectancies.
“For Māori—and Māori men in particular—their life expectancy is shorter, so their chances of even getting to retirement age are significantly less than those of non-Māori. And those that do reach superannuation age have around five fewer years of pension payments.”
Professor Marriott says one way to make the system fairer could be to stagger the age of entitlement for superannuation.
“That could take into account expected longevity, meaning that those societal groups with a longer life expectancy could be eligible later, and those that had a shorter life expectancy could receive superannuation earlier. Most countries are increasing the age of eligibility for pensions, but this is inequitable for groups that we know do not live as long, on average. This approach is used in Sweden, where longevity is part of the decision on pension eligibility.”
Professor Marriott is also working on a cross-disciplinary project that’s looking into what Aotearoa’s tax system would look like if Māori retained financial autonomy. Funded by a Marsden Grant, she is working with Dr Brian Tunui from Te Kawa a Māui and colleagues from the University of Canterbury on Mā te Tāke, e Mau Roa te Iwi: Exploring Tax Systems that affirm Te Tiriti o Waitangi.
“Under Te Tiriti, Māori never ceded fiscal sovereignty (or sovereignty in general). Prior to colonisation, they had many practices that were tax-like, but these were abolished when the Europeans came along,” she says. “There’s a really strong argument to be made that actually, this was never agreed to.”
The project group are documenting tax-like practices that Māori used and will conduct a series of interviews and case studies to help them formulate models that can be used to support a more just and equitable society for all New Zealanders.
Find out more about research at the School of Accounting and Commercial Law.
