Bernard Hickey reckons New Zealand needs to invest in protecting its corruption-free reputation against the pressures of income inequality

By Bernard Hickey

The debate in this election campaign around inequality has burbled along without boiling over.

National has simply denied income inequality has gotten any worse since the mid 1990s, citing the Ministry of Social Development's regular Household Incomes Report.

That's true, but it ignores the huge jump in inequality over the 15 years to 1995 when the economic and welfare reforms of Roger Douglas and Ruth Richardson hit the incomes of the poorest harder than the richest.

The internationally accepted measure is the Gini coefficient.

New Zealand's Gini rose more than any other OECD country between the mid 1980s and the mid 1990s and by 2011 was the 7th highest in the OECD.

To be fair, New Zealand's Gini has not gotten any worse since the mid 1990s as Governments of both colours did things to first boost incomes of those of low to middle incomes and then soften the blow of the Global Financial Crisis.

This stabilisation happened as inequality in other countries such as the United States deteriorated.

Despite that relative improvement, New Zealand is still a relative outlier with much wider inequality than it had back in the 1970s when our society was less exposed to the world. We saw ourselves as simple, clean, honest and corruption free.

It is now much easier to move money in and out of the country.

Many more of the population have grown up or lived and worked in societies where corruption is a more normal part of life.

There is now much greater variety in incomes and the temptation to use money or make money in corrupt ways is much greater.

Other countries with similar Gini levels to New Zealand include the likes of Italy, India and Egypt. Yet New Zealand is ranked alongside Denmark as the least corrupt nation on the planet by Transparency International.

That's quite an achievement given Denmark, Finland, Sweden and Norway all have Ginis that are significantly lower than New Zealand.

New Zealand's reputation is both an opportunity for our economy to advertise ourselves as a great place to do business, but it also has a value that has to be protected.

Now that the finance company crisis is over and financial market regulation has been modernised and toughened, there may be a temptation to be complacent. But the Serious Fraud Office reports it is busier than ever investigating all sorts of cases of corporate and government fraud.

One of the most high profile was that of ACC Property Manager Malcolm David Mason, who pleaded guilty in 2011 to charges of bribery and corruption for accepting bribes of NZ$160,000 for tipping off a businessman about the leasing of an ACC building.

An OECD team specialising in foreign bribery has visited New Zealand in recent months to assess its vulnerabilities, particularly as its connections with North Asia, South Asia and Africa are growing.

The SFO faces pressure to scale back its operations in the wake of the end of the finance company prosecutions, but that creates a risk.

Just as New Zealand should consider investing to protect its 100% Pure environmental brand, we should be prepared to spend on preventive maintenance on our reputation as the least corrupt nation in the world.

That reputation has a value and it should be protected from the natural pressures of the growth of our inequality since those simple times of the 1970s and early 1980s.

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A version of this article first appeared in the Herald on Sunday. It is here with permission.

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13 Comments

There is now much greater variety in incomes and the temptation to use money or make money in corrupt ways is much greater.
 
Any self help examples one can undertake at home? - needs must in the low return legitimate market.

Least corrupt when a person like Cathy Odgers is part of the PMs personal attack politics circle? You've got to be kidding;
 
http://www.nakedcapitalism.com/2014/08/new-zealand-prime-minister-john-k...
 
This is the same PM that called Nicky Hager a conspiracy theorist and Glenn Greenwald a henchman. What does that make Cathy Odgers in the PMs book .. Mother Teresa?
 
 

Odger's name should be listed for consideration by the Ethics Committee of the NZ Law Society fairly soon if not already

Least corrupt when the PMs chief of staff heads off on holiday;
 
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10650068
 
With the PR/ government lobbyist who said of one of our leading freshwater scientists that,
 
"Most ordinary people in NZ would happily have you lot locked up,"
 
http://thejackalman.blogspot.co.nz/2012/11/mark-unsworth-asshole-of-week...
 
I assume by "you lot" Mark Unsworth means all scientists who do research that presents facts that serve to damage the PMs reputation.
 
Key surrounds himself with people who are on exactly this sort of wavelength.  Key, like the US government would jail whistleblowers for telling the truth; would jail scientists for telling the truth; would jail journalists for telling the truth. And he surrounds himself with others of like mind.
 
And his spy boss/old friend, Ian Fletcher was shoulder tapped by the PM himself to head up the GCSB;
 
http://www.nbr.co.nz/article/rennie-defends-fletchers-appointment-gcsb-d...
 
And then the PM lied about what meetings he did or did not have with this old mate in the wake of the appointment;
 
Just a week ago, Mr Key told reporters he only "vaguely" knew Mr Fletcher because of the friendship between their mothers and he could not recall particular occasions when he met up with him in recent years.
It later emerged the two men met over breakfast or lunch on at least three occasions in recent years.
 
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10875266
 
And why Fletcher? A complete novice with respect to military, intelligence, surveillance and/or cyber crime?
 
I'm hoping KDC helps us with that answer tomorrow. 
 
 
 
 
 
 
 
 

I love the wiggle room he is trying to create.  Read this on stuff today..
 
Key said there is a difference between mass surveillance and "widespread cyber protection".  Yes its called spin.

The Bubble will continue until the future Global Deleveraging.     Keiser report.   
The Bubble will continue to keep the zombi / ponzi banks going, until morale improves, & while the top 5% keep prospering.   
This is exactly what global depression brings. Wealth to the top,  lack of bread to the bottom, even middle.  
"...do not damage the oil and wine ...."        

Bernard Hickey reckons NZ needs to invest (more?) in protecting its corruption-free reputation against the pressures of income inequality

No, no, no, no Bernard you've got it the wrong way round
The trick is - you've got to invest less - not more
It's all under control, courtesy of the government
 
This how you do it.

  • . put a leg-rope on the investigators
  • . curtail their exposure of wrong-doing, by
  • . underfunding the SFO
  • . underfunding the FMA
  • . reduce their funding now the GFC Finance companies crisis is over
  • . dont have Royal Commissions
  • . if you do have to have one, apply restrictive ToR
  • . have an Auditor General that apparently never finds anything
  • . dont set up an ICAC like other countries have done
  • . Take 10 years to introduce money-laundering legislation 
  • . allow Hong Kong ICAC to do the work for you ie Chen and Wang

See,
Cant see a thing, nothing here, nothing wrong, nothing doing, nothing to investigate
Go to the top of the class

 

Sargeant Shultz for Pres?

 
And the PMs little cabal keeps giving!
 
Here we have Charles Finny - PR consultant / government lobbyist who works for Mark Unsworth (as per above), the chap of he-who-would-jail-our-scientists fame - launching out from Key's corner regarding the legitimasation of spying;
 
http://www.kiwiblog.co.nz/2014/09/finny_on_five_eyes.html
 
And the old reliable David Farrar pipes up telling us that:
 
If Dotcom’s allegations are correct (which of course they are not)..,
 
And that's before he's even seen the evidence, let alone considered it.
 
Puppets even more amusing than Sesame Street.

Hmmmm - further proof the war against terrorism etc is not for the benefit of the citizens but solely for the state.
 
Key was reportedly preparing to declassify documents that show New Zealand's foreign spy agency considered mass surveillance, but the Government decided not to go ahead. Read more

Is New Zealand aligned and complicit in this alleged sovereign invasion of Germany?
 
The U.S. National Security Agency and its U.K. counterpart GCHQ gained secret access to the networks of German Web providers including Deutsche Telekom AG (DTE) as it sought to peer into computers all over the world, Der Spiegel reported, citing documents provided by Edward Snowden. Read more
 
I wish the government of the day to inform the citizens of New Zealand what our involvement is when it comes to serious claims such as this. It's the old story of 'if you don't have anything to hide what are you worried about' need for disclosure by the prime minister right now.
 
I don't wish for me or my child to become an innocent, uninformed enemy of Germany.

Sorry for the random placements:

Worth a comment:
http://www.dailyfx.com/forex/fundamental/forecast/weekly/usd/2014/09/13/...  ?

first rule for urban renewal - get dirt on the boss before your contract runs out.
(if you can't then you're not good enough and should consider early retirement)