MSD Fraud: Record Highs, Record Lows

It is ironic that, while overseeing a $44 million drop in benefit fraud detection, the Social Development Ministry has experienced the largest staff fraud in public service history - all under the leadership of Social Services and Employment Minister Steve Maharey, ACT New Zealand Social Welfare Spokesman Dr Muriel Newman said today.

"In 1999-2000, MSD's Benefit Control Unit established $86 million in benefit fraud. Under this soft-on-welfare Minister's leadership, this has now dropped $44 million, to $42 million," Dr Newman said.

"Now, it has been discovered that it is not just beneficiaries defrauding the system, with one employee having fraudulently obtained $1.9 million over the past two-and-a-half years. MSD CEO Peter Hughes has partly blamed structural changes for allowing this fraudster the opportunities to commit this crime - changes that Mr Maharey promoted.

"It is of huge concern that, largely due to the Minister's tinkering, benefit fraud detection has dropped to a record low and staff fraud is at a record high. I have written to the Social Services Select Committee - which audits the Social Development Ministry - to request a briefing from the Minister, the CEO, and the Audit Office.

"Taxpayers deserve answers, and it is up to the Select Committee to get them, on the taxpayers' behalf. It must be determined just how robust the systems used by Winz, to prevent fraud, really are.

"The public must have confidence in the integrity of the systems used by New Zealand's largest Government department. Reassurances to the Select Committee would be the first step to restoring this," Dr Newman said.

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