Government braces for inevitable unemployment hike

The 20-year-old CTV building pancaked. Photo / Sarah Ivey

The Government is braced for an inevitable increase in the number of registered unemployed once business owners and workers affected by the Christchurch earthquake exhaust an emergency funding package.

Usually a key performance indicator, particularly during an election year, Social Development Minister Paula Bennett was today philosophical at the prospect of the unemployment rate spiking as the city enters the recovery phase following the 6.3 magnitude earthquake on February 22.

"It's a reality, there's no point getting worried about it," Ms Bennett said after completing a tour of the city's eastern suburbs, one of the worst-affected areas.

The bottom line, she said, was providing financial assistance and then finding ways to return them to the workforce.

"That's what we have state support for. We have to work with them, retrain them and get them into the jobs that are there.

"We have to discuss what they can do rather than what they can't," she said.

Ms Bennett said the government's decision to waive the compulsory stand down period for people who have left their jobs in Christchurch voluntarily to move elsewhere emphasised their commitment to supporting Cantabrians - in normal circumstances people must wait 13 weeks before receiving the unemployment benefit.

Prime Minister John Key today announced the earthquake welfare package would be extended though not to what extent.

"There's no question there will be an extension of a package in some form, I don't think anyone thought six weeks would be enough to tide everyone over, it's a question of refining the package and where do we go from here," he said.

Already more than $50 million has been diverted to businesses and individuals.

Companies can claim a $500 a week subsidy for each full time employee and $300 a week for each part-time worker; people who have lost a full-time job will be eligible for payment $400 a week and $240 for part timers.

Subsidies had been approved for 87 per cent of applicants - 37,467 individuals and 5400 employers, covering more than 28,000 people' had taken up job loss cover.

About 6000 sole traders had also sought financial assistance.

An additional $8m had been paid out via Civil Defence emergency payments for food, clothing and bedding.

Ms Bennett said the Government had already provided more than 49,500 (Civil Defence grants), drawing a comparison with Christchurch's first major earthquake last September 4.

After that disaster Civil Defence made payments worth $420,000 to just 3000 people.

Ms Bennett said six recovery assistance centres staffed by representatives of Work and Income New Zealand (WINZ), Civil Defence, Christchurch City Council, Housing New Zealand, the Salvation Army and Red Cross.

Counselling services were also available.

She said 260 WINZ staff had also been brought to Christchurch to relieve local staff, who were mostly given today off.

The new arrivals also fill the void by staff that have fled the city - some are filling in at offices that have sent personnel to Christchurch.

Ms Bennett said although power and other amenities were now restored to most homes in the eastern parts of the city, people she spoke to were understandably fearful of the future.

There's concern about their jobs and what will happen in a week or two weeks time but they are amazingly resilient people."

- NZPA