REVEALED: Millions In MSD Business Benefits Without Transparency

The New Zealand Taxpayers’ Union can reveal through an Official Information Act request that millions of dollars in business start-up grants handed out by the Ministry of Social Development (MSD) have resulted in large numbers of recipients returning to a benefit within two years.

MSD spent $38,512,555.69 on Flexi-Wage Self-Employment support and Business Training and Advice Grants, yet hundreds of recipients returned to a benefit with no tracking of how many businesses survive.

Taxpayers’ Union Investigations Coordinator, Rhys Hurley, said:

“MSD’s monitoring of the multi million dollar programme is so poor that it cannot say whether it is providing value for taxpayers’ money. If a private lender operated like this they would be out of business in a week.”

"A report published by MSD only last year found that "many participants struggled to establish a viable business" and "only a minority of participants earned any income. Surely that should’ve been the sign to start tracking whether this money was actually helping."

“Throwing money at feel-good schemes without checking whether these businesses succeed is not helping people into long-term work. It is setting them up to fail, then pushing them straight back onto a benefit.”

“Beneficiaries deserve better than a programme where MSD cannot even say whether these businesses still exist a year later. If they can’t target this scheme to offer proper support, they need to scrap it and focus on pathways to employment that work."