The Government's mooted $3.5 billion income insurance scheme is a step closer after Parliament passed a bill to allow ACC to start working on it.
It was a contentious debate, however, with National and Act opposing and the Green Party abstaining.
The Government announced its plan for social unemployment insurance in February, which would pay people 80 per cent of their salaries (up to a cap) for seven months after losing their job. The plan would be funded by a levy of 1.39 per cent on employees and businesses.
It's designed to ensure people re-enter the labour market at an appropriate pay level after being made redundant.
The bill passed today is to enable ACC to carry out work to bring the scheme into operation, should it be established later.
The scheme was jointly designed by the Government, Business NZ, and the Council of Trade Unions. The three parties have supported the scheme to consultation, but are not obliged to support whatever emerges from the consultation process which ended in April.
Officials estimate the total annual cost of the scheme to be $3.54b, made up of $1.81b for displacement and $1.73b for health conditions and disability claims.
Minister for ACC Carmel Sepuloni said the new law would allow ACC to start work on developing a scheme, which is expected to be in place by 2025.
Sepuloni said more than 100,000 New Zealanders lose their jobs every year, and more through shocks like Covid-19.
"It's often difficult for people to find work that matches their skills after redundancy, and they end up taking lower-paid jobs.
"This wage scarring costs our economy more than $15 billion per year.
"It makes it more difficult for our employers to get the skilled workers that they need, but it also causes hardship for individuals, families, and whānau, and disproportionately impacts low-income, Māori, and Pacific households."
Sepuloni said New Zealand was one a small number of countries that did not have a social insurance scheme to protect workers.
National Party workplace relations and safety spokesman Paul Goldsmith called it a "new jobs tax" and would eat up the Government's one-off $350 cost of living payment announcement in the Budget.
A person earning $72,000 would have to pay $1000 a year into the scheme, Goldsmith said.
"They're laying the path for a new jobs tax, which they never talked about in the election and they didn't talk about in the Budget.
"This won't help New Zealand families deal with the cost of living crisis that they're dealing with today."
The Green Party abstained, not because it was opposed, Jan Logie said, but because the party had not yet decided a position on the scheme itself, so couldn't fully support a bill that would enable it.
Of concern, Logie said was that the Welfare Expert Advisory Group (WEAG) had considered these issues and not recommended an income insurance system.
"That for us is a bit of a flag and a concern as a starting point
"For really low-wage income workers, we're worried about what that will mean for them being able to keep food on the table, particularly at a time where people are really struggling, and that migrant workers will be paying that levy but will not be entitled to the insurance at the other end. That for us is really problematic."
Rather, the Greens proposed a guaranteed minimum income, compulsory redundancy of four weeks, to implement the WEAG report, to have free education, and to have paid parental leave extended and increased, she said.
The bill passed its third reading with the support of Labour and Te Pāti Māori.