Audit should locate the culprits but will it?

Fraudsters seem to be covering their tracks

Venkat Raman
Auckland, May 31, 2020

Social Development Minister Carmel Sepuloni (RNZ Picture by Dom Thomas)

The Wage Subsidy Scheme was the first relief package announced by Prime Minister Jacinda Ardern and Finance Minister Grant Robertson at their media conference on March 25, 2020 as the country moved to Alert 4 lockdown, allowing only essential services to operate.

Called, ‘The Covid-19 Wage Subsidy,’ it was available to all persons legally employed within New Zealand. It entailed a flat payment of $585.80 for people working 20 hours or more per week and $350 for people working less than 20 hours per week. The amount was payable only to employers, who were asked to apply online

As of May 27, 2020, government figures showed that $10.963 billion had been paid out to 581,751 applicants- these included employers, professionals and the self-employed- each of them a company registered under the Companies Act.

The Criteria

They were also required to satisfy the criteria prescribed.

They were required to fill in details of their business in the prescribed fields and the names of employees individually confirming their hours of work (20 hours or more a week and less than 20 hours a week). They were also required to give a declaration that the monies received will be paid to the employees mentioned in the application.

“Any breach will be treated as fraud and the employer will be liable for prosecution under the law,” the notification had warned.

Massive Task

Relief money was credited with speed and efficiency to the bank accounts of employers less than five days after the applications were received.

The Ministries of Finance, Revenue and Social Development had worked hard with Inland Revenue Department (IRD) to ensure that employers received the payment and passed it on to the employees mentioned in the application form.

The government said that more than $10 billion was paid out under the Wage Subsidy Scheme, which National Party Finance Spokesman warned of potential fraud and called for transparency and accountability.

Audit and Refund

As of May 29, 2020, audit was progressing but the first quarterly report is expected by end of June.

Social Development Minister Carmel Sepuloni said that 2435 accounts had been audited, of which 183 cases were being subject to additional review.

She also said that as on May 27, 2020, 1281 applicants had voluntarily paid money back, collectively $16.2 million and that and 56 businesses had been asked to refund all or part of their subsidy, a sum of 1.25 million.

Mr Goldsmith accused the government of ‘resisting efforts to get the information into the public sphere,’ and said, “It is important that we have confidence that there are robust systems in place to look after taxpayers’ money. These are colossal spending schemes, and it is important that money is spent wisely and New Zealanders can have confidence in it.”

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