Our changing society - Time to get real about all fraud

TWO indicators of how our society is changing have been given prominence over the last few days.

Yesterday the Director of Public Prosecutions, James Hamilton, told us one in every four cigarettes smoked in the country is either smuggled or counterfeit.

The other development, which flies in the face of our traditional but delusional omerta on these matters, was the announcement from Minister for Social and Family Affairs Mary Hanafin that there has been a dramatic rise in the number of allegations of social welfare fraud made by members of the public against neighbours or acquaintances. The new figure showed an increase of 480% and though it started from a fairly low base it suggests a dramatic and welcome shift on these matters.

Speaking about tobacco fraud, Mr Hamilton pointed out that smuggling was costing the State around €500 million a year. This is cause enough for concern at a time when the public finances are in such a tattered state, but there is another worry.

We are by now all familiar with the great health risks associated with smoking — this month marks the fifth anniversary of the introduction of the smoking ban — but it seems that very many of the smuggled cigarettes are counterfeit and do not meet the required health standards for cigarettes. That may be an offensive oxymoron on Daffodil Day, the Irish Cancer Society’s national collection day, but by dodging a euro or two in excise those who use black-market tobacco are putting their health at even greater risk.

Though we have shied away from regarding those who fraudulently claim social welfare as thieves, it seems that our attitude is hardening. What might have been barely tolerable in the days of plenty is now considered a two-fingered affront.

It has never been easy to be critical of social welfare fraud because there is a tacit suggestion that it is an attack on the weak. There is also the thought that compared to some of the scandals of the day, the individual sums are relatively modest and ‘shure what harm is it?

If you factor in the details that almost a third of government spending goes on social welfare and that we have, by OECD standards, very lax conditions attached to granting unemployment benefits, it is easier to see it in a different perspective.

Though we all have had to acquaint ourselves with fraud and abuse in our banking systems, it does not mean that we should accept the same crimes on a different scale. After all, each set of crimes has to be paid for out of the public purse. As we begin to see social welfare fraud in a different light, maybe we should look across the Atlantic to see how we might tackle the financial services and banking sector’s greed.

Last night, the US House of Representatives approved a 90% tax on executive bonus payments by companies receiving more than $5 billion (€3.65bn) in federal bailout funds. This shows a determined response to a social cancer and hopefully it will inspire Brian Lenihan as he prepares his April 7 budget.