Budget

Government to develop unemployment insurance scheme with Business NZ and CTU to prepare for the future of work

The public will be able to look to an “ACC” -type unemployment insurance scheme later this year that would provide 80 percent of income to people who could be made redundant or lost their jobs through no fault of their own.

The program was announced in this year’s budget and will be developed by a tripartite working group with Business NZ, the Council of Trade Unions, as well as the government.

Finance Minister Grant Robertson said Covid-19 exposed job security vulnerabilities and the risk of ‘dramatic’ income loss due to unemployment.

“Finding a job takes time, and many workers can take lower paying jobs that do not match their skills as financial pressures force them to work quickly. After the global financial crisis, the Canterbury earthquakes and Covid -19, governments had to institute ad hoc programs to support those who lost their jobs, ”says Robertson.


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Business NZ chief executive Kirk Hope said it would be a joint effort with the Department of Business, Innovation and Employment and the Department of Social Development.

Hope says the program will be modeled after similar programs underway in Scandinavian and European countries.

The termination insurance scheme will operate for a fixed period, with minimum and maximum ceilings linked to training opportunities.

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“The overriding goal is to get them back to work as quickly as possible,” says Kirk Hope, Managing Director of Business NZ.

CTU economist Craig Renney said the program will represent a “huge” change in worker protection.

Renney says the program aims to protect workers in jobs vulnerable to automation and the future of work.

Hope says the program aims to help people re-qualify and return to work.

“New Zealand does not have a redundancy program and there is little support if people are out of work. If people are left out of work and their incomes go down, it’s a pretty precarious situation. Reflection is an insurance plan for people without work, ”he says.

“The overriding goal is to get them back to work as quickly as possible.”

This year’s budget also announced the reinstatement of the training incentive allowance at levels four through seven.

Social Development Minister Carmel Sepuloni said 16,000 people will be able to retrain, acquire higher skills and transition to new careers. The program will have $ 127 million invested over four years.

“The allowance supports single parents, carers and people with disabilities on eligible benefits with the initial and continuing costs of studies, such as fees, books, transport and childcare costs,” explains Sepuloni .

“Single parents, people with disabilities and caregivers are among the most affected by the economic effects of Covid-19. They also face higher costs and barriers to education and training. “

Over the next two years, the government will invest $ 44 million to continue Digital Boost – business training courses for SMEs – and provide new digital business consulting services to help Digital Boost graduates adopt methods digital workplaces in their businesses.

One of the main messages from small businesses in the aftermath of Covid-19 was the importance of having the knowledge and tools to compete in a digital world, says Robertson.





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