A December 2020 NZ Herald article revealed that on 2 March 2020 Business New Zealand executives had a meeting with officials and the Prime Minister and the Minister of Finance. Business New Zealand proposed a wage subsidy scheme and two weeks later Cabinet approved a wage subsidy which required businesses to have an actual or […]
Stakeholders influence inappropriate Read More »
On 16 March 2020 Cabinet decided that a 30% loss of revenue for at least one month should be required. The following quotes show how officials tried hard several times near the end of March 2020 to have the 30% loss of revenue requirement removed but they wanted a 12-week lump sum payment to be
Treasury wanted more excessive payments to businesses Read More »
The wage subsidy was implemented to support struggling businesses to retain an attachment to employees during a Level 3 and 4 shutdown. This was the main wage subsidy objective and the need to retain an attachment or connection to employees was stated about 9 times in advice documents. The need to cover this in the
Wage subsidy objectives not followed in Declaration Read More »
The wage subsidies we are mainly concerned about are the main wage subsidy and the extension wage subsidy. Subsequent wage subsidies made some changes to the Declaration that were an improvement and are evidence of the problems with the first two wage subsidies. The Declaration failed to include the main wage subsidy objective of Ministers
Declaration rules inadequate Read More »
In 2020 the MSD paid out almost $14,000 million of wage subsidies very quickly and there was not time to do more than check a small number of the over 750,000 applications. The wage subsidy was paid for 12,20 or 22 weeks but the vast majority of businesses were only closed for 5 or 7
Overpayments ignored Read More »
As at 4 February 2022, MSD has conducted 3,074 pre-payment checks of applications involving more than 80 employees, 4,026 pre-payment checks on integrity exceptions, 3,789 random post-payment checks, and 3,906 targeted post payment checks. COMMENT: Compare with 750,000 recipients and about 1.2m applications. Auditor-General’s report on management of the wage subsidy. May 2021 Audits of applications, carried
Audits only desk checks and conversations Read More »
Auditor-General’s report on management of the wage subsidy. May 2021 4.80 Inland Revenue’s work has also involved looking at whether some applicants GST on taxable supplies (the supplies that a business uses and claims back the GST on when it purchased those supplies) had reduced for a relevant period. Analysis of this information might help
Official and business data ignored Read More »
The MSD knows that the wage subsidy has been subjected to abuse ranging from school children, couriers, consultants and farmers through to large businesses and an Auckland woman who received over $35,000,000. Some employment agencies were paid up to $23,000,000 for everyone on their books. In each industry there were many businesses that did not
Reports indicating widespread abuse ignored Read More »
Auditor-General’s report on management of the wage subsidy. May 2021 In my view, the use of a high-trust approach at the outset needs to be balanced with adequate verification after the payment has been made to properly protect the use of public money. I have also recommended that the Ministry of Social Development seek written
Failure to write to recipients Read More »
Staff instructions. July 2021 COMMENT: The MSD did not ask for advice about prosecuting so a year later had not prosecuted anyone. Auditor-General’s report on management of the wage subsidy. May 2021 The public organisations managing the Wage Subsidy Scheme have identified a number of applicants they consider might have acted unlawfully. In my view, it
Failure to prosecute Read More »
