Summary of ministry of social development wage subsidy failures

Its failure to clarify or include in the Declaration important objectives, requirements and conditions.

Its failure to adopt established beneficiary investigation and prosecution processes and, consequently, to use lax processes that rarely resulted in a prosecution.

Its reliance on phone calls by staff inexperienced in business and accounting processes.

Its avoidance of requesting evidence that could be used in a prosecution.

Its failure to ever ask for evidence of compliance with some main Declaration requirements stated aim to complete investigations by December 2020.

Its failure to quickly carry out and publicise investigations and prosecutions in order to encourage repayments and deter fraud continuing after the original wage subsidy.

Its failure to request extra investigation staff, despite a 171%increase in payments, as pointed out by the Finance and Expenditure Committee.

Its failure to write to all recipients as recommended by Deloitte in 2020 and the Auditor-General in 2020 and 2021.

Its failure to request the repayment of the 5 or 7 week overpayment for most businesses who received the original main wage subsidy (contrast with beneficiaries.)

Its false public claims about phone calls being audits.

Its failure to ask anyone for verifying evidence.

Its failure to take any notice of criticisms by 6 Professors of accounting, business and economics.

Its failure to take any notice of potential fraud revealed in over 200 news media articles and on its database.

Its failure to recognize that the voluntary repayment of most of the $800 million repaid indicates that vastly more repayments would be made if requested.

Its failure to accept that businesses had been hugely overpaid after it was supplied on many occasions with verifying data from IRD, Reserve Bank, Statistics NZ and data collection businesses.

Its failure to accept and deal with widespread fraud as evidenced by over 132,000 applications being rejected and a further 75,000 being closed and its poorly conducted initial and later checks revealing together about 15% fraud.

Its failure in quarterly reports to alert Ministers to huge overpayments and major problems that needed to be corrected and the potential for billions of dollars to be repaid by simply writing to recipients.

Its failure to prosecute anyone for 18 months until forced to start taking token actions against individuals for blatant dishonesty.

Its failure to deal with overpayments and fix other major problems that were brought to its attention.

Its failure to properly deal with Auditor-General recommendations, criticisms and suggestions.(see Quotes)

Its failure to request copies of GST returns, as the only accurate way to verify revenue declines, before this was suggested by the Auditor General.

Its failure to properly design the reviews and evaluations recommended by the Auditor-General resulting in them only revealing 15% fraud when the total should have been much higher. Then ignoring the results.Etc.

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