Research Shows “Massive Under Reporting” of Business Corruption in New Zealand


New Zealand has a low perception of corruption for a reason

A reminder today that New Zealand’s poor perception of corruption is slipping in comparison to other developed countries.

New Zealand’s ranking in Transparency International’s annual Corruptions Perceptions Index recently slipped from second to fourth place.

A survey by the Chartered Accountants Australia and New Zealand (CA ANZ) had found that only half of New Zealand businesses would report an illegal demand from customers or suppliers and only 16% had a formal anti-bribery/corruption policy in place. Furthermore, there is scant protection for corruption whistleblowers:

CA ANZ New Zealand Country Head Kirsten Patterson said this represents a “massive level of under reporting”.

The survey, involving 1000 New Zealand businesses of different sizes across industries countrywide, shows that only 51% of businesses would definitely report an illegal demand with larger firms more likely to do so than smaller ones.

Overall, 6% reported having had illegal demands or bribes made by customers or suppliers.

Patterson said “The survey highlights our concerns that New Zealand’s small-to-medium businesses are unaware of the dangers of bribery and corruption.

We need urgent education and action to ensure our businesses understand the risks and are implementing measures to help stamp out any corruption they encounter.

“Organisations such as ourselves recognise the importance of codes of ethics, and compulsory training on ethics, but still more could be done.”…

…only 16% of businesses surveyed had a formal anti-bribery/corruption policy in place – Wellington businesses were most likely to at 21.8% and Auckland least likely at 11.6%.

And, only 20% knew about the Protected Disclosures Act which provides protection for whistle-blowers who are one of the most common sources of bribery/corruption disclosures.

Only 18% of respondents think whistle-blowers should be rewarded, as happens in some countries which offer rewards for whistle-blowing on tax issues… more here

and it’s interesting to see the sectors where corruption is most prevalent:

Construction and manufacturing sector businesses taking part in the CA ANZ survey reported the highest levels of illegal demands at 11.1% and 7.7% respectively. By region, Auckland businesses faced the highest level of illegal demands (7.4%) with Wellington businesses the lowest at 2.3%.

Government criticized for losing its moral compass

The present government has been criticized for losing its moral compass when allowing controversial building developments. Environment Minister Nick Smith stepped into a legal appeal in a housing project in an Auckland quarry.

Dr Smith has announced that he will use his right under the Resource Management Act to oppose an appeal by two local residents’ groups against a $1.2 billion Fletcher Building plan for up to 1500 apartments and townhouses on the site of the old Winstones quarry at Three Kings…

Dr Smith’s move to join the case is the first time an Environment Minister has used this power since 1999.

Surprisingly, Environmental Defence Society executive director Gary Taylor welcomed it.

“Arguably the Government’s view on resource consent applications ought to be more routinely put before the Environment Court on appeals,” he said.

“But that hasn’t happened for ages, so this is new and obviously the Government is concerned about community groups thwarting intensification in Auckland, and that is a valid planning concern.

“It will be up to the court to decide what weight to attach to his submission and any evidence that he might call.”… read more here

The outcome is already a foregone conclusion but we’ll be watching to see what happens.

9 thoughts on “Research Shows “Massive Under Reporting” of Business Corruption in New Zealand

  1. My uncle had a situation. I’m not sure of that exact details I just got reminded now. May have posted this before.

    He is on the unemployment benefit, and they tried to enroll him in this horticulture training thing at some farm. WINZ send clients there for ‘training’ but my uncle questioned the owners and they got furious. He asked about how much money they make from beneficiaries working there and the guy didn’t want to answer and just got more and more angry. My uncle did more research into this group.

    My uncle told his case manager he isn’t going, and explained his findings. It turns out the ‘training’ is pretty much the same as being employed by the company except you only get whatever your weekly WINZ payment is, not the hours you work with this place.

    What it looks like it some kind of legal underpaid work, that the company makes big bucks from, while paying out nothing because it’s ‘training’.

    My uncle had had some money cut for his refusal, but after hearing this the case manager said he would immediately put the money in his account and make it so my uncle never had to go to any sort of training thing again. It was all to shut him up. He even said if my uncle mentions that he got paid to shut up, it will be denied.

  2. I’m sorry to over post here ,I know that I may appear to be fanatically opposed to N.Z however I really do have experience in dealing with the sale and purchase of businesses in N.Z .My advice to anyone contemplating buying a business here is do not do it unless you are buying Air NZ ,or one of the telecommunications companies.Every business here is grossly overvalued and the accounting is dishonest,coupled with this there are often mitigating circumstances associated with the business ,maybe you buy a cafe and the owner knows Starbucks is about to open across the st ,just an example .Take this as gospel ,sucessful businesses are not sold in N.Z ,lemons are sold to unsuspecting people .If the business is sucessful it will be held onto by family or friends,anything on offer is a lie and a lemon

  3. Also ,never never trust a N.Z accountant in regards to buying a business in N.Z ,unfortunately these are the only people most of us would go to before committing to a business purchase,if you do chose to buy a business in N.Z ( don’t) get a well known private detective to check the relationship between your chosen accountant ,the firms he/ she are associated with and family and friendship connections with the person selling the business.If this sounds crazy O.K I get it ,just means you haven’t been burned by the dishonest con men and cooked book work in N.Z yet.
    Nobody has accountability for dishonesty here ,least of all an accountant.

    • Ah…that story of accounts!! ..A friend of mine recently explained how their accountant was forcibly making them pay for extra GST, Income tax on their businesses and within this guise the accountants were actually safe guarding their vvip clients. By making the regular business pay that extra $$$ these accountants don’t want to get extra attention from inland.

      Another ex-colleague mention that number of senior ird bosses go onto taking up senior financial management positions in private industries mainly as they know tricks of the trade. Basically the working class gets screwed over front, back, top and bottom under the taxation game.

    • You are absolutely right. You can read about the shenanigans of Michael Stiassny and the Kiwi Kangaroo courts ripping off American migrant Vince Siemer on the Wikipedia page

      New Zealand offers practically no recourse whenever an accountant or anyone defrauds an honest person. Therefore, the only recourse is to exercise a high degree of scepticism and to safeguard one’s own affairs. I remember an article about a “financial adviser” recommending to two Singaporean doctors that they invest more than NZ$ 1 million in a company run by a friend of his brother, something that he did not disclose. Predictably, the company went bankrupt due to mismanagement and the investors lost much of their retirement capital. I do not recall what type of laughable punishment the con artist received.

      It is better to do business somewhere other than New Zealand.

  4. Actually I think that the first line of this article sums it up.Much of the problem seems to be the Kiwis “perception” of corruption.theyve been ripping each other off for years in every way imaginable and have no moral compass when it comes to corruption.They just don’t know what terrible scumbags they really are and believe that their conduct is the norm.Once you figure out that the majority of Kiwis are con artists life gets better.Sadly it’s possible to see the beady look in their eyes as they try to sell you a car with a blown head gasket,a piece of land which floods during rainstorms ,an appliance which doesn’t work ,a business with cooked books etc.
    I recently bought a new vehicle from a dealer and was told due to delivery problems at their end that they would provide me with the first two scheduled services for free.I asked how they would remember their promise of the free services and the manager advised me that this had been noted on the computer.When I arrived for the free service they basically laughed at me and denied that any such offer had been extended.Another $2000 Kiwi ripoff.My mistake was taking their word or another words trusting a “reputable” business, I’d just paid them $47000 cash and it didn’t cross my mind that they would lie and burn any future chance of business with me over a couple of services.The truth is that they run scams that most outsiders have never come across.My advice is before conducting business with any one of them ,take yourself to the dark side,close your eyes and imagine the worst kind of situation which could come out of your transaction,then ,take every defensive action possible to guard yourself against the con artists.I strongly advocate having a lawyer revue any transaction you may consider if it exceeds $10000.

    • Yes ,I should have mentioned get everything in writing however it should be mentioned that there is very little consumer protection here so even having an agreement in writing may cost a fortune to enforce as it will need to go through an already swamped overloaded legal system which may or not end up deciding in your favour resulting in very expensive legal costs at the expense of the person who files the claim,better hope it’s not a person related to the judge or one of their cronies.

  5. Wow who would have known ? And Fletchers just bought Higgins ,I’m not even going to describe this one ,I wonder if they all lie together at camp and sexually satisfy one another while NZ pretends all is well,the band played on while the Titanic sank.

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