The Finance Minister was warned in March that removing the original $150,000 cap to the wage subsidy could result in taxpayer money being wasted.
The revelation comes amid growing criticism that companies took millions of dollars of taxpayer money through the wage subsidy and have since posted large profits.
Documents obtained by Newshub under the Official Information Act show Grant Robertson considered little advice, just one short briefing from Treasury, before removing the original $150,000 per business cap to the wage subsidy.
Treasury supported the removal of the cap but warned about a "risk of waste/fraud" and said that should be managed through "careful communications on expectations of who applies, future penalties for not meeting requirements at the start, monitoring and adapting, and significant ramp-up of anti-fraud and auditing activity".
A day after Robertson received the briefing, the cap was removed without changes to the subsidy.
Robertson told Newshub: "Although we didn't put in place the specific regime that Treasury may have suggested, there is still a regime in place" - referring to the anti-fraud auditing regime.
But nothing was done to prevent "waste", and many of New Zealand's largest companies are now refusing to pay back millions of dollars in wage subsidy payments despite remaining profitable.
Harvey Norman took $12.7 million in the wage subsidy and has since posted a profit of $104 million.
- Do you know of a company that has profited off the wage subsidy? Email email@example.com
The Warehouse Group, comprising The Warehouse, Torpedo7, and Noel Leeming, took $67.3 million and has since posted a profit of $44.5 million.
SkyCity took $31 million and has since posted a profit of $66.3 million.
Kathmandu Group took $6.2 million and has since posted an underlying profit of $31.5 million.
Hallenstein Glasson took $5.1 million and has since posted a profit of $28 million.
Fletcher Building took $67.6 million and while it posted a loss of $196 million, its recent earnings were up 55 percent and it expects to pay a dividend to shareholders next year.
Foley Wines took $624,000 and has almost doubled its profits to $6.9 million.
Only Fletcher Building, which laid off about 1000 staff after taking the subsidy, responded to Newshub's interview requests. It said: "the subsidy only covered a portion of the significant losses our business incurred."
In comparison, Briscoes, after posting a profit of $28 million half-year profit, has repaid the $11.5 million it took through the wage subsidy and it did not make any staff redundant.
"It was always our thought to repay it," Briscoes CEO Rod Duke told Newshub, "We just believe it's the right thing to do."
The Finance Minister says he will not try to recover the wage subsidy from businesses who have since turned the taxpayer money into private profits.
"It becomes a moral issue for that company, can they look themself in the mirror and say 'Yes we still needed that?' That is up to them."
The Prime Minister has previously labelled it "morally wrong" and National Party leader Judith Collins said if she won the election she would change the law to recover the subsidy.