Examples of widespread overpayments and abuse

Statistics show that wage subsidies were paid for more workers in some industries than the number officially recorded.

Tourism and hospitality businesses were far more badly affected than other businesses but many were able to make up their lost revenue after the lockdown and some repaid the wage subsidy.  Inner city cafes and restaurants were badly impacted by people continuing to work from home.  These were the businesses that mainly complained about how they were suffering.

Retailers were closed during the main lockdown but their sales increased by 5% for the year ending 31 December 2020 according to Paymark statistics published  on 12 January 2021.

According to the MSD, some children under 5 and some adults over 85 claimed and were paid the wage subsidy. School children who delivered circulars for a few dollars a week were paid thousands of dollars.

An employment agency, Adecco Personnel Ltd,  with a staff of under 100 was paid $12.2 million for the temporary workers it had on its books. It later received $1.6 million for the August 2021 wage subsidy Another employment agency, AWF Ltd  was paid $25 million and this included the 8 week extension wage subsidy when there was no lockdown and a heavy demand for temporary workers. They also claimed for the August 2021 wage subsidy.  Another employment agency repaid the wage subsidy they received.

Farmers, orchardists and other businesses doing essential work were able to work during the lockdown but many claimed the wage subsidy for their family and staff. If farm or orchard is entered in the MSD employer search, 5 employers come up with a message that there are more but access is not available.  The MSD could deal with these and other types of essential businesses but it has not bothered to do this.

A farming leader sent us a copy of a letter he wrote to The Treasury and the MSD in which he said that there was a division in the rural community between those who took the wage subsidy and those who thought that doing this was fraud.  In some areas lists of those who took the wage subsidy had been circulating. He outlined why no farmers should have claimed and retained the wage subsidy.

Team New Zealand was not a trading business so had no genuine drop in revenue.  However, they claimed over $1,500,000 for the first three subsidies. The MSD has failed to take any action.

The MSD has basically ignored over four thousand wage subsidy abuse complaints. This includes a few OIA requests we sent in to find out how they justified their decisions.

An Auckland woman worth over $500 million received $45 million for Farmers, Whitcoulls and Pascoes. This included two Auckland shutdowns where wage subsidies were claimed for retail staff working normally throughout the rest of the country.  No other retail chains did this.

Australian based retailers do not have to publish their New Zealand accounts so no pressure has come on them to make repayments. Bunnings received $27,200,000 but they would have benefited from the boom in home improvement sales after the lockdown. Harvey Norman received  $12,700,000 and their Australian shareholders were told that profits had increased almost 20% and New Zealand sales revenue had increased 28% and profits in July and August were up 185%.  The New Zealand Companies Office records show that profits for the year ending 30 June 2020 were $53 million and at 30 June 2021 $86.5 million.

Michael Hill Jeweller announced that their first half 2020 profit would be almost double that for the same period in 2019. They received the initial wage subsidy for 12 weeks based on a 30% drop in revenue and then claimed the extension wage subsidy for  8 weeks based on a drop in revenue of 40%.  Retailers experienced a big surge in revenue after the lockdown so most did not apply for the extension wage subsidy.

We dealt with Rainbow Print at the time of the first lockdown. These Christchurch printers were paid the original, extension and Auckland resurgence wage subsidies. Apart from 5 weeks they were working normally but a complaint about them was ignored.

In every industry there were businesses that did not apply for the wage subsidy or who have repaid it because they said that this was the ethical thing to do. Nick Mowbray and the owners of some of these businesses called on those who did not need part or all of the wage subsidy to repay it.

While many Christchurch professional firms did not claim the wage subsidy or have repaid it, an investigation by an independent researcher has revealed that about one third to half have retained what they claimed. The initial wage subsidy was paid to those who predicted a drop in revenue of 30% and confirmed that they had used their cash reserves and tried to get bank and other assistance. Professional firms were paid the wage subsidy for 12 weeks but their employees were able to work from home during the 5 week Level 4 and 2 week Level 3 lockdowns. After that they would have been back in the office busy dealing with any postponed work and a surge in new work during the remaining 5 or 7 weeks of the wage subsidy. Some firms also said that they had  later had a 40% drop in revenue and they claimed a wage subsidy extension for a further 8 weeks. Some even claimed for the Auckland lockdown in August 2020.

It is very easy to fiddle a drop in revenue by delaying the processing of invoices. The MSD should have requested copies of GST returns for April, May, June and July 2019 and 2020 and required recipients to certify that these showed the required decline in revenue.

The Ministry has not asked any business to provide anything to verify what they claimed  but has instead just hoped that recipients would act honestly.

Chartered Accountants and lawyers were kept very busy giving advice and were able to work from home but research shows that about half did not repay the original wage subsidy and some claimed the extension wage subsidy.


A check of the wage subsidy employer search on the Ministry of Social Development website shows that 34 of Christchurch firms of consulting engineers did not claim or retain the initial wage subsidy.

A total of 13 have retained the wage subsidy and a further 3 have also retained the extension wage subsidy with 2 of them also claiming for the Auckland lockdown in August.

During the lockdown consulting engineers could not have carried out checks of work not being done by contractors but they would have had design and other work they could do at home for 5 or 7 weeks. The wage subsidy was designed to help struggling businesses retain employees during shutdowns when there was a risk of them being dismissed due to lack of work but this was not an issue here.

Two small firms of consulting engineers claimed both the wage subsidy and the extension wage subsidy. The only large firm to claim both was Kirk Roberts Consulting Engineers Ltd.  They received $774,537 478,808 making a total of $1,253,345.   They stand out because they are only 1 of 3 firms out of 50 to retain the extension wage subsidy. Two thirds of other consulting engineers doing much the same work as them did not claim or repaid the wage subsidy and would not have claimed the extension wage subsidy at a time when consulting engineers were very busy. The MSD failed to investigate a complaint about Kirk Roberts.

Tonkin and Taylor Ltd, consulting engineers repaid $5,253,496 Also Holmes Group, Beca Consolidated Group and other large consulting engineering firms repaid.


In a stuff article on 14 January 2021 Realestate.co.nz said that:  “There were 109,128 properties listed for sale nationally in 2020 which was a decrease of 2.6 per cent on the 112,007 properties listed in 2019.  The average national asking price rose by 10.7 per cent for the year.” These figures indicate that overall agents had higher commission income due to higher property prices in 2020 than in 2019. Clearly, they did not suffer a 30% and later 40% drop in revenue over 12, 20 or 22 weeks.

Extract from Business Desk article about repayments published on 5 January 2021: “The rampant real estate sector also has refused to pay back any of its subsidised payments. The top three realtors alone, Harcourts, Bayleys and Barfoot & Thompson claimed a combined $8 million in wage support for the 50-day lockdown during March and April.  Several, including Harcourts and Bayleys, went on to claim the subsidy extension despite the market bounce, which has seen the most frenetic pace of house buying on record in NZ.  And given the number of people employed in the sector – the Real Estate Authority lists more than 15,000 staff across 892 listed firms – that could come close to $100 million in subsidies. None of that is finding its way back yet, according to MSD stats.”

COMMENT:  Most individual real estate agents would earn commissions not regular wages and salaries. From time to time they could go for a month or more without any income and then have a good run.  Most individual agents could have claimed wage subsidies but the names of individuals are not published by the MSD. Pre-payment checks should have rejected duplicate use of the same IRD number.

Harcourts and Bayleys have franchise operators around the country who would have made a claim under a different name. For example, Whalan and Partners Ltd operate in Christchurch under the Bayleys name. It is difficult to know how much the total paid out was to those operating under the Harcourts and the Bayleys name.

Barfoot and Thompson were paid for everyone working for them but the company did not claim the extension or Auckland resurgence wage subsidy so this indicates that Harcourts, Bayleys and other real estate agents should not have applied for and be keeping these subsidies. After the 5-week lockdown, delayed transactions were completed and there was a big increase in property sales and prices. Harcourts and Bayleys would not have had a 40% reduction in revenue and should not have claimed the extension wage subsidy. One Bayleys company claimed the Auckland resurgence wage subsidy but other agents did not so this indicates that they were not affected by a short lockdown.

A report by Emeritus Professor, Jilnaught Wong, of Auckland University contains details about how businesses were able to abuse the wage subsidy.

Complaints were made through the MSD wage subsidy complaints page but these complaints disappear without trace. The MSD has said that it has not replied to those who made complaints.

The MSD could have checked its database for business names that indicated that they were an essential service or were able to work from home without interruption but it did not do this.

The MSD should have monitored the evidence presented to the Employment Relations Authority that showed wage subsidy abuse in about 70 cases but they did not do this and have not taken action against these employers.

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