Bryce Edwards: How corruption-free is New Zealand?

Bryce Edwards: How corruption-free is New Zealand?

New Zealand might be officially the least corrupt country on earth, but that doesn’t mean there’s nothing wrong here. Plenty of concerning issues exist about integrity and transparency in political and public life. But at the same time, it’s worth celebrating the positives.

New Zealand’s #1 status

Yesterday, the global anti-corruption NGO Transparency International released its annual Corruption Perception Index for the last year, which gave New Zealand the status of least corrupt country – see Newshub’s coverage of this: New Zealand ranked least-corrupt country in the world, again.

Local Transparency International director David McNeill says New Zealanders “should be proud of their ranking” and gives one explanation for the public’s intolerance of more wide-scale corruption: “They understand what a fair go is, and nobody likes to see corruption where resources are transferred from the many to the few”. But he also points out that much more work is needed to fight corruption from growing here. The Chair of Transparency International New Zealand, Suzanne Snively, also calls for more work to be done: “This includes more open public involvement in Government decision-making and a publically accessible registry of the beneficial owners of companies and trusts.”

These reports always ignite debate. For example, the Newshub story above was shared nearly 10,000 times on Facebook, and the Newshub Facebook post garnered 182 comments, many of which questioned the validity of the finding for New Zealand. On the Herald’s Facebook post on the Corruption title, there was even more furious debate – 262 comments, with one commenter declaring: “this is by far the most carcinogenic comment section I’ve ever read through”.

The Herald’s story also reported the Government’s reaction to the news, saying “Open Government Minister Clare Curran said she was pleased to see New Zealand’s public service maintain its high standards. But there was still plenty of work to be done” – see more at: New Zealand ranked least corrupt country in the world.

Of course, Transparency International isn’t claiming New Zealand is corruption-free, but instead that the situation here isn’t as bad as elsewhere. And you can see more material about our ranking on Transparency International New Zealand’s website – see: Corruption Perceptions Index. This also presents possible factors that contribute to New Zealand’s number one status.

Nonetheless, critics of the report are right to question whether the Corruption Perception Index is entirely authoritative. After all, as Transparency International points out, it’s very difficult to measure corruption – because by its very nature it tends to be hidden. Therefore the methodology for this research largely rests on perception. For a discussion of some of these issues, see Dan Hough’s Washington Post article yesterday: The yearly Corruption Perceptions Index just came out. Who got the gold medal?

Here in New Zealand, anti-corruption campaigners aren’t using the latest index to say there are no problems here. As Transparency’s David McNeill points out, “Corruption will always be with us and we need to be ever vigilant.” He’s interviewed in the NBR, saying “It’s now beholden on us to show leadership. We can’t continue to rely on the same policies, we have to continue to innovate. The top ranking doesn’t mean we are perfect, [only that] we are relatively better than other places in the world” – see Nevil Gibson’s NZ’s public service again ranks least corrupt in the world (paywalled).

Some reasons to be positive about integrity in New Zealand

Other recent international reports are positive about the state of democracy here – for instance, earlier this month, The Economist produced its annual democratic-health index, which showed New Zealand as the fourth most democratic in the world – you can see the full report here: Democracy Index 2017 Free speech under attack. Although another less well-known group ranked the country less kindly on its World Electoral Freedom Index – see Newshub’s New Zealand ranked 112th in world for ‘elector empowerment’.

New Zealand is also signed up to the Open Government Partnership project, which has previously given rather negative feedback on New Zealand’s efforts to improve transparency. But the latest draft progress report by an independent examiner is very positive – you can download the report here: Mid-Term Report 2016-2018. Local blogger and expert in this area, No Right Turn, has written in praise of this – see: Open Government: A progress report.

The Tax Justice Network has also given New Zealand a good report card in terms of transparency in open financial dealings. Its Financial Secrecy Index, released in January, “ranks countries on issues such as banking secrecy, the ability to dodge taxes, hide assets, launder money, and whether they co-operate internationally” – see Gyles Beckford’s NZ’s financial transparency ranking improves.

The new government is also showing positive signs that it will make improvements in issues of transparency and integrity. This is reflected in an interview with the new Minister in charge of “open government” – see Shane Cowlishaw’s December piece, Clare Curran is planning a few shake-ups. Around this time, I also published my own reasons to have hope for positive change – see: Optimistic for open government.

More recently, the government is also indicating there will be reform of the rather backward law on whistleblowers, the Protected Disclosures Act – see Derek Cheng’s article from last week, Govt wants stronger protections for whistle-blowers. This is evaluated by No Right Turn in the blog post, Whistleblower protection.

Some Reasons to question integrity in New Zealand public life

There are also plenty of reasons to believe that nothing much has changed recently. The most important story in this regard is Asher Emanuel’s article published on The Spinoff yesterday about a lobbyist working for the new Government – see: Conflict of interest concerns over lobbyist turned chief of Jacinda Ardern’s staff.

This follows on from my roundup column earlier in the week, The Government’s revolving door for lobbyists. And today, Newsroom has published my call for the media to scrutinise lobbying more – see: More light on revolving door lobbyists.

What about the age-old issue of political appointments made by governments? There is a good case to be made for governments putting their own allies, or people they trust, into important positions. Nonetheless, a good dose of scrutiny of this is required. Two weeks ago, Claire Trevett reported that former deputy Labour leader Annette King would soon be appointed by Winston Peters as the next High Commissioner to Australia – see: Former MP Dame Annette King tipped to be next High Commissioner to Australia. As Trevett points out, any appointment of King should be surprising, because “In the past, Foreign Minister Winston Peters has railed against “plum” postings for former MPs, saying it was doing experienced senior diplomats out of a post and if he was Foreign Minister again he would recall those he did not believe were suited to the job.”

Trevett also pointed out: “Peters and King have a respectful relationship and the posting was understood to be an unwritten understanding of the coalition relationship.” Such “unwritten understandings” should be challenged. And No Right Turn adds: “If true, this is simply more cronyism. While heads of mission are technically appointed by the Governor-General rather than the Chief Executive, they still become public servants. The principle of appointment on merit should apply – especially to our most important diplomatic position. The idea that you just appoint a crony as a political favour so they can drink themselves senseless for three years at public expense is a loathsome relic of the British monarchy and belongs in the dustbin of history with the rest of the imperial baggage” – see: A crony appointment.

See also, another blog post with the same name, but about a different Labour Government appointment: A crony appointment.

Late last year, two political scientists published some important results about how the public service is faring at the moment, suggesting that officials are increasingly failing to get their neutral, “free and frank” advice to government Ministers, largely due to the interventions of politicised ministerial staff – see Chris Eichbaum and Richard Shaw’s ‘Not as frank and free as we thought’. See also RNZ’s Free and frank? Not so much.

At local government level, there have been plenty of examples recently of questionable spending and a lack of accountability. This was examined in a scathing piece at the end of last year by Karl du Fresne – see: A rampant culture of entitlement. He concludes that “A pervasive culture of entitlement and self-indulgence seems to have taken root in some of our public institutions.”

What about the “shell companies” that authorities are charged with overseeing? Can we have faith that these are under control? Not according to Gareth Vaughan, who writes: Six years after then Commerce Minister Simon Power detailed extensive problems with NZ shell companies, the problem persists.

Finally, for a counter to Transparency International awarding New Zealand “least corrupt” status, it’s worth going back a few months to see the results of the Deloitte Bribery and Corruption Survey 2017. As reported by Gyles Beckford, the results of this show that “New Zealand is not as honest and free of corruption as it likes to believe” – see his article, ‘Corruption is real in New Zealand, it’s happening. And you can listen to yesterday’s RNZ eight-minute Panel discussion, involving Deloitte forensic director Lorinda Kelly: New Zealand least corrupt in the world.