Bank fees give Key $100m to aid jobless

By Paula Oliver

National's plan to help people who lose their jobs because of the international financial crisis could be paid for with money generated by the bank deposit guarantee scheme.

Leader John Key hinted at the weekend he would this week unveil a scheme offering support payments and loans to people who lose their jobs during the turmoil.

The payments would be part of a wider move by National to help people get back into the workforce.

Any payment or support would be targeted and carry a time limit.

It would also probably be aimed at middle-income earners who have commitments such as mortgages but no savings to carry them through a period without work.

Because of the country's tight economic situation, National and Labour have little room left in which to make more promises that will cost money.

But the bank deposit guarantee scheme announced by Labour at its campaign launch a fortnight ago is expected to make more than $100 million for the Government through the fees banks have to pay.

The big four banks have tens of billions of dollars in deposits, and have to pay a 0.1 per cent fee to get the Government guarantee cover.

National was yesterday cagey about how it would pay for the policies it will outline this week, but it does appear to be looking at the bank deposit money.

"I can't make a comment about that," Mr Key said yesterday when asked by the Herald.

The cost of any support scheme is likely to be much less than the amount coming in from the banks.

National's foray into assistance payments for unemployed people is another step into territory traditionally associated with Labour.

Mr Key has done this often since he became National leader, and appears to be trying to outflank Labour politically in the final two weeks of the campaign.

But Labour also has some new policies up its sleeve to deal with the economic recession and is likely to unveil them soon.

And it also will have access to the bank deposits scheme's fees.

Mr Key said it was almost inevitable that some people would lose their jobs when the international crisis hit the local economy.

"Some New Zealanders will be feeling very nervous," he said.

The support plan was designed to help them remain confident and carry them over until they got another job.

It appears Mr Key has been talking to banks to find out how they would treat customers with mortgages who lost their jobs.

Those discussions may have played a role in the design of National's new policy, but Mr Key would not discuss it further yesterday, saying only that an announcement would be made towards the end of the week.

Labour has already promised a retraining allowance for people who lose their jobs.

The cost of that policy has been roughly estimated at about $5 million, but the total depends on the effect the international financial turmoil has on New Zealand.

- NZ Herald

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