How corrupt is New Zealand politics and public life? A report out today suggests that New Zealand is no longer the least corrupt country in the world.

Until recently New Zealand was widely regarded as the least corrupt country in the world. But it has taken a tumble to number four on the just-announced Transparency International Corruption Perception Index. And the country's corruption-free score out of 100 has fallen three points from 91 to 88. So does this mean we're becoming more corrupt? And how do we explain the tarnishing of New Zealand's clean reputation?

It could be that many of the National Government's various controversies are finally coming to home to roost, impacting on New Zealand's global reputation. Although these controversies have varied in their seriousness and credibility, many of them have played a role in eroding the perceived integrity of the administration and the wider public sector.

For the most part, the various scandals have appeared to do no harm to National's popularity. But amongst the more politically engaged - as well as an international audience - some might well have finally been registered as stains on New Zealand's democratic credentials.

Measuring transparency and corruption

Today's report could be seen as delayed reaction or payback for years of eroding integrity. The latest report covers a two-year period up until mid-2015. Therefore it's the first annual Transparency International Corruption Perception Index to take account of the scandals involved in the 2014 general election - especially Nicky Hager's Dirty Politics, and the other controversies involving the then Minister of Justice, Judith Collins.

To arrive at New Zealand's reduced score of 88 out of 100, Transparency International has aggregated seven separate annual assessments by independent agencies such as the World Bank and the World Justice Project. All seven assessments provide a score out of 100 on governance issues (which are 92, 93, 81, 83, 98, 88, 83). In comparison to New Zealand's score of 88, three Nordic countries have registered higher scores (Denmark 91, Finland 90, and Sweden 89). This is why New Zealand is now behind them all, in fourth place.

The Corruption Perception Index has been in existence since 1995, during which time New Zealand has always been near the top of the table. In fact for the eight years from 2006 to 2013, we were right at the top. It was only last year that New Zealand was knocked off its perch by Denmark.

Unfortunately the new Corruption Perception Index doesn't provide any commentary on New Zealand's decline, and there is little available information about our new position. Many of the contributing assessments are not public either, which means we don't know why some of their scores have dropped for New Zealand.

Fortunately, however, the World Justice Project Rule of Law index is freely available. For example, according to this, the score for "no corruption in legislature" has dropped from 92 in 2014 to 86 in 2015. And perhaps of most concern, New Zealand dropped from 3 to 6 in terms of "Absence of Corruption".

Perception problems and other measures

Of course the Transparency International index is one of perception. It is impossible to actually measure real corruption - by its very nature corruption is somewhat hidden and intangible - and therefore other metrics are necessary as proxies.

For example, when Transparency International commissioned a survey of public opinion about corruption in New Zealand in 2013, it found that 65 per cent of New Zealanders said corruption had increased over the previous three years.

Other surveys have also provided alarming evidence. The State Services Commission Integrity and Conduct Survey of 2013 found that 15 per cent of public servants "reported observing illegal conduct in the previous 12 months".

And in 2011 a TVNZ poll asked: "Is New Zealand the least corrupt country in the world?", with 57 per cent choosing the option "No, we're deluding ourselves".


Increased corruption scandals of recent years

A perception of rising corruption is entirely understandable given the increased number of political corruption scandals occurring in recent years. In particular, a number of landmark controversies have helped jolt faith in some of the main institutions of public life.

For example in 2010 there were a number of "ministerial credit card" scandals involving the misuse of public funds - this led to the resignation of a housing minister, and former Labour ministers such as Shane Jones and Chris Carter were also shamed by their records being made public.

Political finance scandals have dogged politicians of most political parties in recent years, but in 2014 the long-running Oravida scandal was especially damaging for Judith Collins. Maurice Williamson was also forced to resign as a minister for his actions in regard to another National Party donor. It was also the year that "Cabinet Clubs" became controversial for their fundraising techniques for the National Party.

Other controversial governing arrangements became problematic for National - especially the unorthodox Government-commissioned convention centre to be built by SkyCity. This was followed by the Saudi Sheep farm controversy, which the Auditor-General is due to report on very soon.

Other questions of integrity have been raised around the Government's handling of the Mike Sabin resignation, the subsequent Northland by-election bridge bribes, and various appointments to government boards of National Party supporters. In general there are many questions about threats to the political neutrality of public service, and about how well government agencies provide information to the public.

Increased debate about corruption

Never before has the word "corruption" been used so much in New Zealand politics. But this doesn't necessary mean there is more of it actually occurring. Therefore a caution about the perceptions of increased corruption in New Zealand also needs to be made. Just because there are many more media stories and allegations of corruption made by politicians, this doesn't actually mean that New Zealand is becoming more corrupt.

In these more scandal-oriented times many of the allegations thrown around remain unproven or contentious. The publication of Nicky Hager's Dirty Politics, despite all of the vitally important issues it raised about democracy in New Zealand, did not necessarily prove that corruption is now running wild.

And we should take allegations about corruption from various politicians with even more caution. Such allegations are the new weapon of electioneering. Politicians can often score easy hits against opponents by impugning their reputations.

Turning corruption risks around

The myth of a clean politics and public service in New Zealand can no longer be sustained. But will the Government and other key figures take the latest report seriously? They should. After all, many government agencies and Ministers have taken the Corruption Perception Index very seriously in the past, keen to celebrate New Zealand being at the top of the table. The number one ranking has been used as a stamp of endorsement for the way government works in this country. Ministers and departments sprinkle speeches and reports with mentions of the Transparency International success. So it should now be expected that the Government will answer the downgrade and view it as a legitimate reason for reform.

Officials and politicians need to note that the latest Transparency report has a majority of countries improving their scores in the index. New Zealand is going against the tide of reduced corruption.

Of course New Zealand could comfort itself that we haven't had the worst fall. According to Transparency International, "Brazil was the biggest decliner in the index, falling five points and dropping 7 positions to a rank of 76." In contrast we only dropped three points and dropped two positions. And Australia also declined - from 11th to 13th and from 80 to 79 on the index.

But the lesson should be that things could actually get worse for New Zealand. The experience of other countries shows that often the descent into corruption is hard to turn around. And next year's index could well see New Zealand continue it's tumble.

Declaration: Bryce Edwards is a Board Director of Transparency International New Zealand. But the analysis here is his personal opinion.
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