New Zealand’s score has declined again, from 85 to 83 in the just released 2024 Corruption Perceptions Index (CPI), slipping our global ranking further into fourth, with Singapore moving into third place. This also bumps New Zealand off the top rank in the Asia Pacific region. Whilst still in the top ten, New Zealand has surrendered its position as world leader in integrity and transparency.
For many years New Zealand scored top alongside Denmark, now it is now 7 points behind its previous peer.
The decline started in 2015 and whilst it recovered briefly in 2020-21 it now appears to be in more rapid decline.
TINZ’s 2024 research report sets out the problem: An assessment of the effectiveness of anti-corruption institutions in New Zealand in deterring, detecting and exposing corruption.
Our research found that New Zealand’s response to increasing corruption pressures over several years has been lacklustre and complacent. We have not taken a strategic approach to preventing and finding corruption, we lack a well-resourced lead agency. Collaboration and information sharing including with the private sector has been variable and there are legal weaknesses that frustrate investigations.
We are seeing corruption in public procurement and contracting, immigration and border services; and in the exploitation of migrants. Many financial organisations are not adequately identifying risks around politically exposed persons. We urgently need legislation and tools to help shine the light on those abusing our financial and social systems for personal gain. That includes transparency of those who ultimately control companies and trusts – this would enable investigation and exposure either both by regulators and by researchers and the media. Shell companies, and trusts are being used to hide and shift illicit funds. There has also been a rapid increase in fraud experienced by New Zealanders – individually and through businesses.
Transparency International New Zealand is also concerned about a lack of transparency in political lobbying and political finance. In addition, where legislation is passed under urgency or where it is poorly considered, this can undermine both public participation and judicial oversight.
What can be done to improve New Zealand’s score on the Corruption Perceptions Index?
Recommendations from our 2024 research and from global assessments (e.g. OECD) offer a clear pathway to regaining our world leading status.
- We need a zeitgeist shift in thinking about anti-corruption in New Zealand towards positive prevention. This includes stronger, more visible leadership by the Public Service Commission on public sector integrity, and a single well funded agency with the primary and high-profile responsibility for anti-corruption monitoring, coordination, research and strategic operations.
- That agency needs to lead development of an overall anti-corruption strategy that:
- clarifies agency roles and responsibilities;
- ensures efficient sharing of strategic and operational information and practice;
- builds an effective early warning system regarding corruption changes;
- effectively identifies, analyses and remedies weaknesses in the anti-corruption network;
- requires better public reporting on anti-corruption resourcing and activities.
- The lead agency needs a strategic policy focus on identifying areas vulnerable to corruption, where competition is lacking and where there is extensive discretion and limited transparency.
- A comprehensive review and reform of the OIA is required.
- A public register of beneficial ownership of New Zealand companies, trusts and limited partnerships that enables greater transparency of the ultimate controller of these entities is urgently needed. The policy work has been done, we now need it built and in place.
- The financial transparency of political parties needs reform.
- We need better lobbying transparency and conduct, and some means to address rotating door issues for politicians and senior public servants.
- The state of the media has deteriorated more than others. At a time of increasing polarisation there is public good in a strong publicly trusted media, including trustworthy and politically neutral government owned media.
Global CPI Theme
The global theme of this year’s Corruption Perceptions Index is the climate crisis. Countries across the globe, including New Zealand, must place integrity at the heart of climate initiatives if we are to use the most of our limited time and resources in the face of an existential crisis. Placing integrity at the heart of climate change means putting science in front of politics or sector influence and using reputable standards-based approaches. Regulations and policies must prioritise environmental and climate needs along with our global climate commitments.
Overall, New Zealand’s strategies to mitigate climate change are not viewed as top class. The Climate Change Performance Index, for example, ranks New Zealand 34th out of 67 countries. Similarly, the Climate Action Tracker rates New Zealand’s policies and actions as “highly insufficient,” noting they are “not at all consistent” with limiting global warming to 1.5 degrees Celsius.
Anti-corruption should be a core part of climate action and policy making, and a way to improve countries’ ability to mitigate and adapt to the climate crisis. As the climate field is still developing, this provides an opportunity to design and implement specific regulations and standards to protect against theft, policy capture and other abuse.
Movement at the top
The diagram below shows movement of the seven ‘least corrupt’ scoring countries over the last 14 years.
All countries have had periods of decline since 2012 with Denmark and Finland recovering somewhat, and other countries wavering up and down. Denmark faced corruption scandals in 2018. Finland slipped but recovered through an anti-corruption strategy and lobbying register. Singapore’s decline has been less marked, partly through the investigative and prosecutorial efforts of its anti-corruption agency. Switzerland has suffered from corruption scandals and has been criticized for how it responds to them. Norway has faced multiple recent cases involving conflicts of interest and cronyism. Luxembourg has strengthened its legal framework, improving transparency, and expanding whistleblower protections.
Performance of other countries and regions
The top ten countries (those assessed as having lower levels of corruption) are Denmark (90), Finland (88), Singapore (84), New Zealand (83) with Luxembourg, Norway and Switzerland on 81, Sweden (80), Netherlands on 78 and Australia on 77.
Trading Partner Comparison
Pacific countries
Australia’s CPI score has improved two points to 77 – this takes it back to its 2017 levels after a marked drop over time, and it is back into the top ten. Actions prompting this increase could include the establishment of a National Anti-Corruption Commission and broadening of its AML legislation.
Papua New Guinea has improved again (its score was 25 ten years ago). Vanuatu has also improved to 50, a steady increase from 43 in 2017. Fiji has improved after a drop, back to its 2021 score of 55. Other Pacific states are not covered by the minimum number (3) of CPI contributing sources.
Regional Shifts
In analyzing the long term shifts by region, the last five years have seen a consistent decline in the CPI values. The earlier five-year period to 2019 saw much greater variation in regional experiences. Over the decade to 2024 both the American and European regions have seen a persistent decline in CPI values, the Asia Pacific region and the ECA regions have had quite similar patterns over that ten-year period.
What can be said about New Zealand’s shift in score this year
This year, overall New Zealand has dropped two points in its score. The trend line is the biggest concern.
The Corruption Perceptions Index (CPI) is a composite index, drawing from 13 reputable surveys/assessments, eight of which encompass New Zealand. TI has a peer reviewed process to evaluate each year the relative impact of contributing surveys in order to preserve the veracity of the overall score. This can also include rescaling across the contributing surveys.
Some of the contributing sources are open to view. An example is the Bertlesmann Stiflung Sustainable Governance Indicators – this highlights many positive elements of New Zealand’s integrity frameworks, but also notes that the “New Zealand political system is not entirely immune to potential loopholes or abuses. For example, concerns exist regarding the lack of transparency in the lobbying industry and the so-called revolving door practices in which individuals shift between government positions and private sector jobs, and vice versa. There are also ongoing concerns about party financing rules.”
The 13 data sources capture the assessment of experts and business executives on a number of corrupt behaviours in the public sector. Generally these sources cover common ground in terms of public corruption. They include: bribery; diversion of public funds; use of public office for private gain; nepotism in the civil service and state capture by specific interests. Some of the sources also look at the mechanisms available to prevent corruption in a country, such as: the government’s ability to enforce integrity mechanisms; the effective prosecution of corrupt officials; red tape and excessive bureaucratic burden; the existence of adequate laws on financial disclosure; conflict of interest prevention; access to information; and legal protection for whistleblowers, journalists and investigators.
Examples of questions from contributing surveys are copied below:
Economist Intelligence Unit Country Risk Service
- Are there clear procedures and accountability governing the allocation and use of public funds?
- Are public funds misappropriated by ministers/public officials for private or party-political purposes?
- Are there special funds for which there is no accountability?
- Are there general abuses of public resources?
- Is there a professional civil service or are large numbers of officials directly appointed by the government?
- Is there an independent body auditing the management of public finances?
- Is there an independent judiciary with the power to try ministers/public officials for abuses?
- Is there a tradition of a payment of bribes to secure contracts and gain favours?
The PRS Group International Country Risk Guide
This is an assessment of corruption within the political system. The most common form of corruption met directly by businesses is financial corruption in the form of demands for special payments and bribes connected with import and export licenses, exchange controls, tax assessments, police protection, or loans. The measure is most concerned with actual or potential corruption in the form of excessive patronage, nepotism, job reservations, exchange of favours, secret party funding and suspiciously close ties between politics and business.
Varieties of Democracy The V-Dem corruption index is part of a broader expert survey run by the University of Gothenburg, V-Dem Institute and University of Notre Dame. It includes measures of six distinct types of corruption that cover both different areas and levels of the political realm, distinguishing between executive, legislative and judicial corruption. Within the executive realm the measures also distinguish between corruption mostly pertaining to bribery, and corruption due to embezzlement. The assessment is done by a country expert.
What is the CPI? How is it compiled?
The Corruption Perceptions Index is compiled by Transparency International from 13 international reputable assessments/surveys by business and academic experts of levels of corruption in public services. TI uses the data on relevant corruption questions in each of those sources. Transparency International does not make any individual judgement of a country’s standings in the CPI.
To be included in the CPI a country needs to be covered by a minimum of three out of the 13 contributing surveys. (eg New Zealand is covered by eight, Australia by nine, Papua New Guinea by six and Fiji by three).
What types of corruption does the CPI cover?
The contributing surveys provide expert opinions on corruption in the form of bribery; diversion of public funds; officials using their public office for private gain without facing consequences; the ability of governments to contain corruption in the public sector; excessive red tape; nepotistic civil service appointments; conflict of interest of public officials; legal protection for whistleblowers, state capture by narrow vested interests and access to information on public affairs/government activities.
The CPI does not cover direct citizen perceptions of corruption, tax fraud, illicit financial flows, organised crime, enablers of corruption (lawyers, accountants), money-laundering, private sector corruption or informal economies and markets.
