Process vs practice: tax and welfare prosecutions in New Zealand

Purpose This study aims to compare the prosecution policies of the tax and welfare agencies in New Zealand, showing how similar legal frameworks translate into divergent enforcement practices. Design/methodology/approach The study first compares the published prosecutorial guidelines from the tax and welfare agencies in New Zealand. It subsequently engages in a theoretically informed analysis using street level bureaucracy to highlight how differences in prosecution outcomes occur in financial crimes that are highly comparable (tax evasion and benefit fraud). Findings Both agencies require evidential sufficiency and public interest before prosecution, and both emphasise graduated enforcement. However, operational discretion shapes outcomes through enforcement pyramids, seriousness thresholds and alternatives to prosecution. Moreover, enforcement severity is symbolically maintained while rarely used in practice, creating a possible threat rather than a likely sanction. Both agencies emphasise that prosecution is a last resort to ensure compliance and protect integrity of their systems. However, key differences reflect their distinct mandates including their purpose and approach, decision-making and oversight, enforcement options and discretion. These differences are the focus of this study. Originality/value The study concludes that while there are differences in the prosecution policies, these are unlikely to result in the differences seen in prosecution decisions. Instead, analysis using street-level bureaucracy highlights the discretion at junctures prior to the prosecution decision window that result in a lack of decision-making transparency.