Consultation is under way on the creation of a Government programme intended to help Kiwis who lose their jobs.
Finance Minister Grant Robertson says the New Zealand Income Insurance Scheme is being jointly designed with Business NZ and the Council of Trade Unions (CTU).
But the proposal is being criticised by Botany MP and National Party leader Christopher Luxon, who says it’s a new tax that will make families worse off.
Robertson says workers who are made redundant, laid off, or who have to stop working due to a health condition or disability, would receive 80 per cent of their usual salary for up to seven months, up to the current ACC cap.
The proposal includes up to 12 months of support for retraining.
It’s to be funded by levies on wages and salaries, with workers and employers paying an estimated 1.39 per cent each.
Workers will be eligible after six months of levy contributions in the previous 18 months.
“As New Zealand moves beyond the economic and social impacts of Covid-19, there are important lessons to be learned from the way we were able to support one another through an unprecedented series of challenges,” Robertson says.
“During Covid-19, the Government protected livelihoods with the wage subsidy scheme and resurgence support payment.
“We think it’s time for an enduring solution.
“Our proposed scheme provides economic security to individuals directly, and supports them to transition into a good new job, as opposed to economic support packages which keep people in their existing job even if that role is no longer viable.”
CTU president Richard Wagstaff says the scheme will provide a financial cushion to workers left without a job through no fault of their own.
“A New Zealand Income Insurance scheme would give people the time and financial security to find a good, new job that matches their skills or to rehabilitate or retrain.
“With a tight labour market and demand for skilled workers, it is in the best interests of workers and businesses that people are employed in areas that make the greatest use of their skills.”
Business NZ chief executive Kirk Hope says job losses don’t just harm individuals and their families, they also affect businesses, communities and the economy.
“Businesses lose out on important productivity gains because the current system doesn’t give people time to find work that matches the skills they have.
“Sectors facing critical skill shortages may miss out on key workers, simply because a vacancy wasn’t available in the few weeks a worker was looking for work.”
Luxon says the scheme is a “jobs tax” that will make people worse off and it could not come at a worse time.
“National has big concerns that Grant Robertson’s new unemployment insurance will make the cost-of-living crisis even worse.
“It’s a new tax, reducing incomes at a time when, with high inflation, businesses and workers can’t afford it.
“Small businesses have been struggling just to keep the doors open over the last two years.
“Now, just when Kiwis deserve some relief, the Government wants to hit workers and businesses with a brand new tax to fund a new gold-plated unemployment benefit.”
Luxon says the scheme should be scrapped.
“The Government should just call this what it is, a jobs tax, and then they should abandon it.”
People can have their say on the proposed scheme before April 26 by going online to www.mbie.govt.nz/incomeinsurance.
