Employers who were not entitled to New Zealand’s coronavirus wage subsidy scheme have paid back NZ$17m ( £8.3m) into public coffers, the country’s finance minister has said, as reports emerged of companies failing to pass the money on to employees.

The scheme has been signed up to by 1.6 million New Zealanders, especially workers in the retail, hospitality and tourism sectors who have been unable to earn incomes, and may be unable to do so for many months to come.

A team of 100 fraud investigators at the Ministry of Social Development has been monitoring the rollout of the scheme, and stories of employers pocketing the cash instead of paying it to employees were rife in the first few weeks of payouts.

More than NZ$10bn (£4.9bn) had been paid out in wage subsidies, said Grant Robertson, the finance minister, and 99% of New Zealand businesses were being honest in their use of it. A total of NZ$17m had been paid back to the government, and of more than 2,400 audits undertaken, just 183 cases required further investigation.

“We owe it to those workers and employers to make sure their good work isn’t undermined by anyone abusing the scheme,” Robertson said. “We also have a duty to all New Zealanders to ensure taxpayer money is going where it is intended to support the economy.”

Since 20 March 30,000 people had also applied for the jobseeker benefit, Robertson said, and food banks around the country were experiencing growth in demand of up to 600%.

New Zealand plans to ease coronavirus lockdown in a week Read more

“This has been a true New Zealand effort in fighting a once-in-a-century social and economic crisis … we will continue to draw ideas from people from all walks of life,” Robertson said, saying the May budget would be focused on rebuilding the economy, which is expected to contract by more than 7% this year, according to the International Monetary Fund (IMF).

There are three more days until New Zealand’s strict lockdown ends and the country moves from level four to level three, meaning 400,000 people can go back to work, and food and online deliveries will be permitted, as will swimming, surfing, fishing and hunting.

More than 1,400 New Zealanders have been infected with Covid-19 and 17 have died, all with pre-existing health conditions. The country is pursuing an “elimination” strategy to stamp out the virus, and strict border controls are in place, as well as the toughest lockdown conditions in the world.