Impact to New Zealand
New Zealand’s third ranking in the latest Corruption Perceptions index (CPI) is a step back. This is the first time since the CPI was revised in 2012 that New Zealand is not in the top two.
New Zealand remains firmly entrenched in the group of eight small industrialised democracies that also includes the four Scandinavian countries, the Netherlands, Switzerland, and Singapore that consistently top the Corruption Perceptions Index.
In the overall picture, New Zealand continues to have one of the least corrupt public sectors in the world, but loses bragging rights to being considered the best.
The gradual decline in our score highlights that complacency is not an option in our continued battle against corruption.
We also need to remind ourselves that the CPI is a relative comparison of countries and by no means an indicator that we are free from the effects of corruption.
New Zealand may not return to first any time soon
In general New Zealand has been experiencing a slow downward trend in its component scores over the last several years. This year a significant drop in one component - the slice of corruption related data taken from the World Economic Forum Executive Opinion Survey (EOS) index - exacerbated the results.
As a result, in 2023 New Zealand with a score of 85 sits five points below first place Denmark and three below second place Finland. While the World Economic Forum is one of the most volatile component indexes, should a significant rebound occur, getting back to the top would require other countries to falter. Historically five point swings among the leaders have not occurred.
Meanwhile four other countries are on our tail with Norway (84), Singapore (83), Sweden(82) and Switzerland (82).
World Economic Forum Executive Opinion Survey
The 2023 drop in score for New Zealand was primarily due to responses to the Executive Opinion Survey (EOS) undertaken by the World Economic Forum in 2023. The EOS is one of the eight contributing surveys/assessments to the CPI.
The EOS was held between April and August 2023. There are two corruption related questions in the survey that contribute to the Corruption Perceptions Index.
While New Zealand is still given a positive tick by most executives, the survey responses in 2023 indicate reduced business leader confidence in government integrity systems.
Business Confidence
Business confidence may be declining because of:
- Large fraud cases – mortgage, tax, and COVID-19 payments during 2022 and 2023
- Widespread scamming not being addressed
- Poor transparency in Infrastructure projects
Trading Partners
The 2023 CPI showed a slight decline in score for New Zealand’s top trading partners. The low score of China - our top trading partner - is something all New Zealand businesses must be concerned with.
Reminder - the CPI ranks public sector corruption
Transparency International notes that “as a measure of public sector corruption, the CPI does not capture issues related to financial secrecy and money laundering, or the role of the private sector in allowing the corrupt to safely hide and enjoy the proceeds of their crimes”.
