Equal treatment?

Whether people are treated equally when it comes to welfare, pensions and sentences for financial crimes reveals a lot about New Zealand society.

Two white collar criminals with their faces blurred out to protect their identity

It’s not about the colour of your skin. It’s about the colour of your collar.

Most years, there are many more cases of tax evasion than welfare fraud.

Research at Te Herenga Waka—Victoria University of Wellington shows we prosecute ten times more welfare fraudsters than tax evaders.

When a serious financial criminal goes to court, the defence often cite the white-collar offender’s good character, the damage to their reputation and that they will lose their position in society. Even so, in most cases, a mere 5 percent of the amount is repaid.

It’s a very different story when it comes to blue-collar financial offences such as welfare fraud, which is much more likely to be repaid in full.

The potential gains from white-collar crime are high, with little reparation and short prison sentences. The University’s School of Accounting and Commercial Law’s research shows that, in New Zealand, white collar crime actually does pay.

Why courts are more lenient on white collar criminals

Social justice is at the heart of Associate Professor Lisa Marriott’s research. “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.”

She has extensively researched legal 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. 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 than welfare fraud to the economy.”

Dr Marriott has looked back over 30 years of prosecuted cases from the Serious Fraud Office, and analysed the language used in the court reports relating to aggravating or mitigating factors for these top-level financial crimes.

Supreme Court of New Zealand

“White collar criminals really do seem to get privileged treatment in the justice system.”

Supreme Court of New Zealand

“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.”

Watch Lisa talk about her research into attitudes towards blue- and white-collar offending, and experimental approaches to taxation research.
Watch the video on YouTube

It’s every New Zealander’s right to receive superannuation when they turn 65—or is it?

Whether you’ve stopped working or still have a full-time job, whether you own one or more properties or have other assets and sources of incomes, every New Zealander 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 Dr 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?”

Related links 

Stuff: Courts softer on criminals wearing suits 

Stuff: New Zealand Superannuation: The facts and the fiction 

The Lion and Unicorn royal coat of arms on top of a building.

To find out more
If you have any questions about social justice research at the University, contact:
Prof Lisa Marriott
Associate Dean Research
Wellington School of Business and Government | Wellington Uni-Professional
+64 4 463 5938