Ministerial Credit Card Rort

Emigrants from countries whose MPs have been involved with ‘expenses’ irregularities may be surprised that ‘low crime, corruption free’ New Zealand also has a number of trough feeders.

If you thought duck houses was bad how about visits to the Taj Mahal, porn and chocolate, massages and flowers? all funded by the hard pressed  NZ tax payer. No wonder those NZ tax rates are so onerous, these guys have lifestyles to keep-up!

The Ministerial credit card scandal has been running for a few days now and we’ve been watching the developments with great interest. Will resignations and sackings follow ? not on your nelly,  and this long established ‘perk’ (not only for Ministers, but also for the fat cats of private businesses) will very likely continue because the system has evolved to give power to the ministers’ offices to authorise the spending, rather than with public officials.

Cut up the offender’s credit card
“Free-spending government ministers rorted their taxpayer-funded credit cards against the backdrop of a Yes Minister culture.

As former Labour ministers lined up to justify their spending – including a $300 tour of the Taj Mahal, a month-long, $22,000 tour of Europe and a five-hour taxi ride – Prime Minister John Key has told officials to show no mercy from now on.

I’ve said to them it’s got to stop … They should be cutting up the credit cards of people who use them [inappropriately].” (ed. sounds like a slap on the wrist with a wet plane ticket)

“The release of thousands of credit card receipts from Labour’s time in government showed some ministers lived it up on their cards overseas, with fine wines and expensive dinners. Others pushed the boundaries further.

Labour list MP Shane Jones, who bought pornography and chocolate on the taxpayer, and former conservation minister Chris Carter, who bought flowers and massages, are both lined up for demotion on Monday by furious leader Phil Goff.

But much of the spending was approved by officials and classed as legitimate. Mr Key blamed a system in which all the power lay with ministers’ offices, rather than the officials who were supposed to police their spending.

Ministerial Services have been working on the principle that they want to accommodate ministers and their offices. They do almost everything they can to accommodate them.”

Mr Key is also signalling more transparency in future: ministerial credit card receipts are likely to be released quarterly, at the same time as MPs’ travel and accommodation expenses are disclosed. Auditor-General Lyn Provost is also expected to recommend a cleanup of the rules when she reports back from a long-running inquiry, sparked by revelations that Fisheries Minister Phil Heatley wrongly spent more than $1000 on his credit card.”

Phil Heatley, you may remember, was also the Minister for Housing, he resigned his position exactly two weeks after allegations of bribery surfaced at Housing New Zealand.

Next time you read one of those ‘low corruption’ advertorials about New Zealand be sure to have a large helping of salt nearby.

Then be sure to read “As Good as We Are Perceived?” –

“..Of the companies on the NZX 50, 44% have policies prohibiting bribery and 18% have policies on regulating facilitation payments.

This does not compare favourably with the percentage of companies prohibiting bribery in comparable markets overseas.

Of the top 100 companies by market capitalisation in the UK, 72% have explicitly prohibited giving and receiving bribes. In Europe the figure is 57% and in the US it is 69%.

Few companies augment their policy with an adequate system to encourage a culture of compliance with anti-corruption policies. Out of the NZX, only 16% of companies have a code of ethics system that CAER rated as ‘advanced’.

Only 5 companies had a code of ethics that prohibited facilitation payments.

The NZX should seek to increase the number of companies that address the issue directly. Companies are far more likely to include ethics elements suggested by the NZX than those that are not.

Corruption can have uncertain consequences for investors that stem from the additional types of risk corruption introduces. Investors have a role to play in encouraging companies to prohibit bribery and corruption by including this type of risk in investment decisions.

The bottom line of this research appears to be that many of New Zealand’s largest listed businesses don’t pass some fundamental best practice ethics tests. Transparency International (New Zealand)’s message is that the laggards need to take action and get the ethical dimensions of their businesses sorted out if they are to justify the confidence of their stakeholders including shareholders and the public. As the global financial crisis highlighted, there is a lot at risk including shareholder wealth, employees’ jobs and New Zealand’s reputation. We need more ethical leadership from New Zealand business in relation to these issues.”