An interesting study has come out of Victoria University – showing that the Government writes off tax debt much more easily than it does welfare debt.
There was $6 billion of tax debt vs $1 billion of welfare debt, but the welfare debt, interest and penalties were all much less likely to be forgiven – indeed that debt was likely to be deducted from superannuation and estates of the deceased.
In the year to June 2012 IRD wrote off about 50% of penalties and interest - $374 million – as well as 11.6% of core debt – another $435 million.
Ministry of Social Development wrote off $8.7 million or 2.1% of debt. That debt is mostly loans to those who couldn’t afford living costs and welfare overpayments.
More resources were put into retrieving the average $2523 of beneficiary debt than into retrieving the average $14,479 of tax debt.
It may seem odd that we’re doing everything we can to screw money out of those who can’t afford their living costs, while forgiving the debt of those who don’t pay their taxes. But that’s the philosophy of this Government: beneficiaries are second class citizens and taxpayers are worthy of respect – even if they don’t actually pay their taxes.
While not excusing fraud at either end (no-one should break the union deal of a fair day’s work for a fair day’s pay), tax fraudsters also get off much easier than welfare fraudsters – despite tax fraud generally being for larger amounts by those who can afford to pay more easily.
It seems we’ve reversed the Biblical maxim that from those who are given plenty much will be expected – and we now expect more from those who’ve been given next to nothing.