MBIE said a formal decision on whether the Government will proceed with it will be made in June or early July.
However, it also said substantive legislation to govern the operation of the scheme is intended to be introduced in late 2022 and enacted in around July 2023 (likely ahead of the general election).
The director of Victoria University of Wellington's Institute of Governance and Policy Studies, Simon Chapple, said the poor process was "mind-boggling".
He fears the Government is jumping the gun, working on the assumption the public wants and needs an income insurance scheme, without having properly campaigned or consulted on it.
The proposed scheme would see a claimant paid up to 80 per cent of their income for up to seven months, in the event of a job loss due to redundancy or sickness.
If they were unemployed after this time, they'd go into the regular welfare system.
The scheme is estimated to cost $3.5 billion a year and would be compulsory. It would be funded by employees contributing 1.39 per cent of their wages/salaries to the scheme (up to a certain level). This contribution would be matched by their employer.
Chapple noted Labour didn't campaign on introducing income insurance ahead of the 2020 election. It wasn't even included in its full election manifesto. Rather, Labour (in a tax policy document linked to its manifesto) committed to "investigating" such a policy.
He feared that when MBIE finally publishes its summary of submissions from the initial consultation, its write-up could be marred by Government's expressed support of the scheme.
MBIE's acting manager of income insurance policy, Francis van der Krogt, told NZ Herald around 2000 people or organisations either made full submissions or answered a shorter-form survey.
He said officials are analysing the feedback and preparing a summary for Ministers, which will be released "in due course".
Asked why the submissions weren't published before the legislation was passed and funding allocated via the Budget, van der Krogt noted the legislation is a "small and relatively technical piece of legislation" that enables ACC to do work it wouldn't otherwise be able to do under existing legislation.
"The work will help inform final decisions. Any substantive legislation to create a New Zealand Income Insurance scheme would go through a full Parliamentary process," van der Krogt said.
MBIE, in its Regulatory Impact Statement, also explained that if the legislation wasn't passed, and the Government decided to proceed with the scheme, then ACC would be unable to expend funding provided, and would be obliged to put current implementation planning on hold until the scheme was passed into law, likely in mid-2023.
"This could undermine decision making and delay implementation of the scheme and/or put successful implementation at risk," MBIE said.
Chapple was also critical of the Government teaming up with BusinessNZ and the Council of Trade Unions to develop the policy document, rather than doing the work completely in-house ahead of putting groups with other interests on the same footing as these two organisations.
"It has been presented to the public as a done deal in a short consultation process," Chapple concluded.
"The process degrades democracy and hence undermines trust in democratic institutions."
