POOR JUDGEMENT

Judge Allan Roberts thinks benefit fraud is a 'national problem.' Judge Allan Roberts doesn't know what he's talking about.

Lisa Marie Reid, 34, was sentenced to one year  in jail this week  for falsely claiming some $80,000 worth of  domestic purpose payments over the course of four years.

She was living with her husband during this  period.

From the newspaper reports,  it doesn't sound as if the money was lavished on overseas holidays, restaurant  meals  and plasma TVs.  She told the court that  she continued to take the benefit as a 'safety net ' for herself and her two children.  I suspect there's another story behind this comment.

Reid had never appeared in court before and her defence  counsel  asked for a community - based sentence so that Lisa Reid could  continue  to look after her two teenage children.

But Judge Allan Roberts wasn't having a bar of it. ''Benefit fraud is a national problem and a national disgrace.' he lectured.

It seems that Lisa  Reid has been sent to jail as a symbolic  strike against what the judge perceives to be  'a national problem'.  Intentionally or not, he has  given the impression that thousands of beneficiaries are living the high life on a level of benefit they are not entitled to.

Its a pity that Judge Roberts  didn't do his homework before deciding that he was going to use Reid as a warning to other would-be beneficiary  fraudsters.

Benefit fraud has actually been declining over the  past several years.

In 2004-05  the value of 'overpayment' was approximately  $56 million. In 2009-10 it had  shrunk to $20 million.

Last year I wrote:

In 2009 the number of alleged benefit frauds actually went down to just under 15,000.

These were cases that were just investigated for possible fraud. In the majority of cases Work and Income simply went on fishing expeditions in the hope of finding something,

Of the approximately 15,0000 case investigated in 2009, only 735 ended up in court. Many of these cases ended up collapsing because no reliable evidence was provided to back up the Ministry of Social Development's allegations.

A similar number again ended up in court last year, despite the Ministry having boosted its number of fraud investigators from 79 to 95. The ministry checked 29 million records, up from 12 million two years ago.

Overall   beneficiary fraud is identified as just  0.1% of the Welfare Budget. In 2010  the welfare budget was some $14 billion.

So benefit fraud isn't the 'national problem' that Judge Allan Roberts thinks it is.

He would be better off focusing his moral outrage at those at the top of economic order - but perhaps he has friends 'uptown'.

In June the Inland  Revenue announced the results of a ten year investigation into the tax dealings of the country’s 250 richest people and their 7,500 companies and trusts.   It turns out they have  avoided  paying $500 million worth  of tax –  with hundreds of millions more still in dispute.

It kinds of puts the $20 million worth of welfare fraud into perspective.

Perhaps Judge Roberts could take a good hard look at what the banks are up to as well . They're behaviour hasn't changed markedly  since they  attempted to avoid paying a whopping $3.2bilion  worth of taxes through a deliberate series of carefully constructed financial 'strategies'. 

In 2009 New Zealand's five main  banks settled out of court and  ended up paying just 20 percent of what the Inland Revenue was seeking. The New Zealand public got screwed.  No one from any of the banks ended up doing any time in the can for this orchestrated and deliberate fraud.

Let's also not forget  the crooks and charlatans of the finance sector who  lost over $4 billion of other people's money when the sector collapsed. Other than some of  the most high profile figures, most of those snake oil merchants have escaped the kind of legal punishment meted out to Lisa Reid.