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MSD rejects Integrity Institute claims

03 July 2023.

We reject the Integrity Institute’s misleading $10 billion “overpayment” claim and can see no reasonable basis for making it, says George Van Ooyen, MSD’s Group General Manager – Client Service Support.

The Integrity Institute’s reasoning appears to be based on a misunderstanding of the eligibility criteria for the Wage Subsidy Scheme, and of the results of our integrity work to recoup funds that applicants were not eligible for.

MSD has made a complaint about this misleading advertising campaign to the Advertising Standards Authority, which is investigating the matter.

The claims made in these advertisements do not reflect the multiple independent reviews of the Wage Subsidy Scheme and MSD’s integrity program, including the Auditor-General’s report published in 2021.

No evidence of widespread misuse has been presented by the Integrity Institute, and it would be inappropriate for MSD to rely on their “I have estimated” or “I have calculated” statements.

The Wage Subsidy was a high-trust scheme set up to support workers, families, and businesses during COVID-19 restrictions so that they could recover financially afterwards. About $18.8 billion was delivered to support more than 1.8 million jobs.

It is important to note that the profits applicants may have gone on to make after receiving the wage subsidy does not affect their eligibility.

MSD has no powers to forcibly recover payments that applicants were eligible to receive. However, we are committed to identifying and investigating any instances of wage subsidy misuse and it is not accurate to suggest we have done “nothing” to recoup wage subsidy payments.

We have a team of more than 100 investigators and about 40 to 50 per cent of them have been focused on wage subsidy work as the scheme progressed. This is a significant investment in its integrity.

We have engaged with thousands of applicants since the scheme began. As of 23 June 2023, this had contributed towards 24,774 repayments being made, recouping $819.4 million for taxpayers.

We have completed 15,367 pre-payment and post-payment checks on wage subsidy applications, resolved 6,703 allegations of wage subsidy misuse, and completed 627 wage subsidy-related investigations.

Our pipeline of investigations and prosecutions has so far seen 37 people brought before the courts for wage subsidy misuse, in relation to around $3 million in subsidy payments.

Seven people have been convicted and sentenced to date and another six are awaiting sentencing. A further 11 cases are in the process of having charges filed.

MSD is also undertaking civil recovery action in relation to 31 businesses, with civil court action having commenced in ten of these cases.

Eleven significant and complex cases of alleged wage subsidy fraud, involving larger sums of money, have also been referred to the Serious Fraud Office.

We expect more court action to follow as we continue our investigations into a mix of businesses and individuals.

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