June 10, 2010

• NZ Faces Challenges of Credit Card Scandal, Pt.2
     Restoring taxpayer confidence.

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  It's not quite clear how New Zealand's government got into such a mess with the credit card scandal. Typically, safeguards are in place that protect agencies against wide spread card abuse. However, it appears rules for New Zealand's ministerial credit cards appear to be very lax. Proof is in the stacks of receipts that indicate officials had no knowledge of the excessive use of the government's cards by top officials for personal expenditures. In an interview with Radio New Zealand, Prime Minister John Key said there has been talks in the past about the use of credit card spending but it always appeared to be within the rules. He noted that "The question is whether the rules are set appropriately."

  Key further noted that ministers' jobs require that they do a great deal of traveling and they spend a lot of time away from home which can often require the purchase of needed items. Nevertheless, Key acknowledged that the credit card situation could "undermine confidence in politicians."  A spokesman for Ministerial Services responsible for overseeing ministerial credit card spending, said ministers were given free rein to spend what was "actual and reasonable". Despite the flexibility in spending, ministers are required to submit statements with supporting documentation for all spending. All ministers receive a handbook that contains the rules for spending.

  Prime Minister John Key has requested a review by the Auditor-General's Office of the Systems, rules and protocols around ministerial credit cards which will not be available for several months. No details of the audit have yet to be released, however, they will be looking at how effective the system is. The process is expected to cost New Zealand's taxpayers more than $50,000. There is question as to whether the abusive card spending falls under the category of any criminal offence. If it does, some ministers will be looking at up to three months in prison as well as a loss of job.

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