Federated Farmers slams Government's unemployment insurance scheme

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The Government's proposed New Zealand Income Insurance Scheme (NZIIS) will be "hugely expansive and expensive" Federated Farmers says.

Under the scheme, someone who loses their job will be given payments worth 80 per cent of their former income (capped at salaries of $130,911), for up to seven months after they became unemployed.

The annual cost of $3.54 billion will be funded from a levy of 1.39 cents on every dollar earned by employees and matched by businesses. ACC will collect the levies and administer the scheme.

Federated Farmers was "dismayed" by the plan, which was unveiled yesterday.

"It seems strange to say the least to advance this costly scheme, especially at such a time," Feds president Andrew Hoggard said in a statement.

It was a stressful period for many Kiwis, with New Zealand in the Red traffic light setting and "on the cusp of an expected Omicron surge" Hoggard said.

"It's hardly the right time to be consulting on such a contentious piece of legislation."

Feds strongly believed consultation on such important issues should only take place when the country was in the Orange setting.

"The pandemic has been massively disruptive and stressful for many employers and the next three months are expected to be very intense," Hoggard said.

"The Government should recognise that people's wellbeing, and good process, are more important than legislative timeframes to clear the books of anything contentious before an election year."

Hoggard said acute cost pressures were hammering businesses, while high inflation was eroding individuals' real wages.

"Another tax to absorb will just add to this pressure."

Also, unemployment was currently at "rock bottom" and was forecast to stay low, he said.

"People who do lose their jobs are unlikely to be out of work for long but if they can take a seven-month break between jobs, that might change.

Listen to Jamie Mackay interview Federated Farmers president Andrew Hoggard on The Country below:

"There will also be administrative costs, including [those] to make sure the scheme isn't rorted."

Federated Farmers would prefer to see further central government efforts to attract and upskill those looking for work to fill the wide range of vacancies in the primary and other key sectors, Hoggard said.

The plan released on Wednesday is in draft form and will go out for consultation before any final decisions are agreed upon.

The Government is accepting submissions on the scheme until April 26.