Draining the Swamp

Fraud, Corruption, and Conspiracies

It is an old adage that when one is uncovering and exposing a rort one needs to follow the money.  Where is the payoff going?  Who is benefiting?  In New Zealand we have had an example recently where traditional opponents conspired together to cream off some money from the tax payers to feather their own nests. 

The cause d'jour was workplace health and safety.  The conspirators were traditional opponents--the Council of Trade Unions ("CTU") and Business NZ.  Together they persuaded the government owned Accident Compensation Corporation to pay out $20m over ten years to the respective organisations/pressure groups to "train" employees in health and safety practices.  This from the NZ Herald:

Beginning in 2003, the money was paid to the Council of Trade Unions (CTU), employers' group Business NZ and private training provider Impac Services.  However the documents showed the $19 million spent "did little, if anything, to reduce workplace accidents", Taxpayers Union executive director Jordan Williams said.  The documents released under the Official Information Act showed reviews of the programme showed its net effect in reducing injuries were "small in size and were inconsistent in direction to be considered effective".

In other words, workplace safety would have improved whether the $20m of tax payers money was paid out or not.

ACC analysis found that over the time the programme was working there was a reduction in claims even in workplaces where no safety or workplace activity has occurred.  The analysis suggested that even if the training was responsible for half of the reduction in accidents, at best only 16c in every $1 spent did any good, or in other words, 84c in every $1 was being wasted.

Thankfully, the ACC is canning the rort.  But, spluttered the CTU, think of the importance of having all those trained safety representatives in workplaces.

CTU Secretary Peter Conway denied the programme was a waste of money, saying workplaces were safer with trained health and safety representatives.  ACC-funded health and safety representative training was "hugely valued by both employees and employers and is a good investment towards confronting our health and safety issues''.  "Independent evaluation of the course undertaken in 2008 was very positive. We know that it delivers value for money - trained representatives are more likely to recognise hazards, and to know what kind of action to take to help mitigate the risks of those hazards,'' he said.

Ah, we have experienced some of this stuff.  Johnny gets selected to attend a "work and safety" course funded by the taxpayer.  He comes back bristling with zeal about the numerous hazards confronting employees in the workplace and how they can be mitigated and prevented.  He may even go so far as to hold a few "consciousness raising" sessions amongst work colleagues.  Within a month Johnny is hard at work again, too busy to engage in any mothering work. 
Taxpayers Union executive director Jordan Williams, which publicly exposed the rort, said:

"Business NZ and the CTU have created a nice little earner for themselves", said Mr Williams.  "It's a disgraceful example of big corporate and union welfare chewing through taxpayer cash."

Quite.  Good on the Taxpayers Union--making a genuine contribution to the fiscal health and safety of taxpayers.

One is reminded of Adam Smith's dictum: when rival business owners are put in a room together, not five minutes pass before they will be conspiring in some scheme or other to defraud the public.  And usually these days such schemes involve some sort of government funded system of rules and regulations or "for your own good" programme. 

Put a union representative in the room with the rival business owners and within two minutes a rort will have been hatched.