Workers and their employees would each pay 1.39 cents in the dollar to fund the scheme. Photo / 123rf
Workers and their employees would each pay 1.39 cents in the dollar to fund the scheme. Photo / 123rf
Businesses are being urged to provide feedback on a proposed $3.5 billion a year income insurance scheme to help workers who lose their jobs through restructuring, recession or personal illness.
Under the proposed scheme, someone who loses their job and meets the criteria would receive payments worth 80per cent of their former income (capped at salaries of $130,911), for up to seven months after they lose their job.
Workers and their employees would each pay 1.39 cents in the dollar to fund the scheme, which is based on the work of a group involving the Government, Business New Zealand, and the NZ Council of Trade Unions.
ACC would be responsible for collecting the levies and administer the scheme. While the amount of levies charged could change over time, they would be frozen at 1.39c for the first two years of the scheme.
BusinessNZ chief executive Kirk Hope said it would give newly unemployed workers support and more time to find work that matches the skills they have, especially in a tight labour market such as now.
"It would mean better skills-matching in the workplace and greater labour market mobility in general, allowing greater productivity, and greater job satisfaction," he said.
"It would allow displaced workers to get back in the workforce quickly, perhaps with some retraining, retaining their new full value to the working economy.
"And it would be valuable where job displacement has been the result of a technology transition in the workplace in a time when technologies in business and the workplace are going to become more frequent."
A public consultation document on the proposed scheme was published yesterday on the Ministry of Business, Innovation and Employment (MBIE) website.
The proposals estimate that $1.83b annually would go to covering the cost of people facing job displacement, with another $1.73b going to health condition and disability claims.
Analysis cited by the Government suggests the costs of unemployment could amount to $15.4b a year over the first five years following job losses, assuming the displacement of 100,000 working people.
BusinessNZ said it was important for wide public discussion.
Hope urged businesses and the public to contribute their thoughts throughout the three-month consultation phase.
BusinessNZ CEO Kirk Hope. Photo / Michael Craig
A spokeswoman for Fonterra, one of the country's largest employers, said the co-op would assess the details of the scheme.
"We will consider the proposals and whether we will make a submission as part of the consultation."
The public consultation document said the scheme was designed to shift behaviours in the economy.
"If successful, we expect workers who are displaced to take time to find the right job, rather than taking the first one available, which might be a poor fit with their skills and experience."
The Financial Services Council welcomed the discussion paper, saying the proposed scheme was a significant step that needed to be carefully considered.
"With unemployment currently at a historical low and a large fiscal cost to the scheme, it's essential that the Government takes the time to get this right and that industry feedback is taken on board," FSC Chief Executive Richard Klipin said.
"It is also important to note that the scheme caps financial support at six months so if it is implemented the need for New Zealanders to still carefully manage and protect their own financial risk profile will remain.
"We know that the future of work is going to be dynamic and challenging and consideration of an income insurance scheme will be an important part of it. We welcome the opportunity to be a part of this national conversation," concluded Klipin.
Kerry Davies, national secretary of the Public Service Association which has almost 80,000 members, said now was the time for the welfare state to evolve to meet the challenges and needs of the 21st century.
"Climate and technology change will mean people's working lives will be increasingly disrupted and the pandemic has shown us that Government and public services have a key role in actively supporting people through this."
