An investigation of attitudes towards tax evasion and welfare fraud in New Zealand
| DOI | 10.1177/0004865815596793 |
| Published date | 01 March 2017 |
| Date | 01 March 2017 |
| Subject Matter | Articles |
Australian & New Zealand
Journal of Criminology
2017, Vol. 50(1) 123–145
!The Author(s) 2015
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DOI: 10.1177/0004865815596793
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Article
An investigation of attitudes
towards tax evasion and welfare
fraud in New Zealand
Lisa Marriott
Victoria University of Wellington, New Zealand
Abstract
This study undertakes an empirical exploration of attitudes towards tax evasion and welfare
fraud in New Zealand. Prior research indicates that society has different attitudes towards
these two crimes. However, it is not known why this is the case, particularly as both crimes
are conceptually similar. The study has two aims. The first is to measure the extent to which
society views tax evasion and welfare fraud differently in New Zealand. The second, and
primary, objective of this research is to offer an explanation for why different views exist. The
dual-process model, using social dominance orientation and right-wing authoritarianism is
used for analytical purposes. Responses from 1500 survey participants show that New
Zealanders do have different attitudes towards welfare fraud and tax evasion. In contrast
to previous research findings, this study shows that harsher attitudes are held towards tax
evasion than welfare fraud. Education and income level provide the greatest level of signifi-
cance in explaining attitudes towards welfare fraud; and age and income source provide the
greatest level of significance in explaining attitudes towards tax evasion.
Keywords
Attitudes, blue-collar crime, tax evasion, welfare fraud, white-collar crime
Introduction
This research investigates differences in attitudes towards tax evasion and welfare fraud
in New Zealand. Tax evasion is generally undertaken by well-educated, privileged indi-
viduals: to evade tax, it is necessary to have earned or collected the funds in order to
engage in the evasion behaviour, e.g. through revenue earned, pay-as-you-earn deduc-
tions from employees’ wages, or goods and services tax collected. Moreover, a reason-
able knowledge of the tax system is required in order to engage in the serious tax evasion
that is the subject of this study. Conversely, benefit fraud is typically undertaken by
those with low income and fewer resources.
Corresponding author:
Lisa Marriott, School of Accounting and Commercial Law,Victoria University of Wellington, PO Box 600, Wellington
6140, New Zealand.
Email: lisa.marriott@vuw.ac.nz
Reference to tax evasion in this study is used to describe the deliberate non-payment
of tax obligations. Tax evasion is an illegal activity. The study does not include tax
avoidance, which is when the tax system is used to ensure the best possible outcome
for tax purposes, but within the law. Reference to welfare fraud is where funds are
deliberately claimed from the welfare system that recipients are not entitled to.
Research in jurisdictions other than New Zealand suggests that individuals view the
crimes of tax evasion and welfare fraud differently, despite the conceptual similarity of
the two offences (Australian Institute of Criminology, 1986; Karlinsky, Burton, &
Blanthorne, 2004; Marston & Walsh, 2008; Smith, Button, Johnston, & Frimpong,
2011). Tax evasion and welfare fraud are both financial crimes that have the same
victim – the state and society as a whole. Moreover, both offences are deliberate, with
the key difference that tax evasion is not giving monies owed to the state, while welfare
fraud is taking monies that one is not entitled to from the state. Both crimes result in the
same outcome: reduced resources for the government to provide services to society.
However, while studies indicate that society views these two offences differently, no
theoretical explanation has been provided for why this is the case.
This study has two components. First, it measures the differences in attitudes towards
tax evasion and welfare fraud in New Zealand. Second, it offers an explanation for the
differences in attitudes found. These two components are addressed via a unique online
survey methodology.
The purpose of examining attitudes towards tax evasion and welfare fraud crime is
twofold. First, results of this study allow some tentative proposals to be made insofar as
why individuals perceive tax and welfare offending differently. Second, research suggests
that the public is not as punitive as often perceived by politicians and those in the justice
system (Maruna & King, 2004). Thus, to the extent that society’s views of crime are
reflected in outcomes in the justice system, it is necessary that these views are captured
accurately. This study captures these attitudes, as well as offering an explanation of what
underpins these preferences, which may assist with informing practice in the justice
system.
The study commences in the next section, which outlines the literature on attitudes to
tax evasion and welfare fraud. The subsequent section details the theoretical framework
used for analytical purposes in this study. ‘Methodology’ section outlines the survey
methodology and approach used for data collection. ‘Data analysis and discussion’
section outlines and analyses the data, with conclusions drawn in the final section.
Background
Numerous research outputs suggest that individuals view tax evasion as less serious than
other offences involving similar financial amounts (Australian Institute of Criminology,
1986; Cullen, Link, & Polanzi, 1982; Evans & Kelley, 2001; Gupta, 2006; Karlinsky
et al., 2004; Smith et al., 2011). A number of studies ask individuals to rank different
types of offences. These studies indicate that the public are generally less concerned
about taxation fraud than they are about benefit fraud (Marston & Walsh, 2008;
Smith et al., 2011) and that tax evasion is considered as less serious than other forms
of financial fraud (Australian Institute of Criminology, 1986; Gupta, 2006; McIntosh &
Veal, 2001; Orviska & Hudson, 2002; Smith et al., 2011). In Evans and Kelley’s (2001)
124 Australian & New Zealand Journal of Criminology 50(1)
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