Govt is chuffed as consultations begin on income insurance scheme – but the Nats point out it’s a new tax

A double dose of Covid announcements from The Beehive – regarding rapid antigen tests and booster shots – was accompanied by two spending decisions to help specific groups,  arts and culture and Pacific people, in the name of the recovery from Covid.

There have been announcements regarding the country’s economic wellbeing, one to welcome news that unemployment has fallen to record low levels, the other to tell of a programme to lift Southland’s economic performance.  The Southland Just Transition Work Plan can be downloaded from the Southland Just Transition website:

And there has been an announcement to remind us what day it is.  It’s World Wetlands Day today.  Hurrah.

Then there has been news of consultations beginning on an income insurance scheme.  This perhaps belongs among the economic announcements but also qualifies as a “labour market” initiative – and a big one.

But is it a good one?

Not according to the Nats, who are hollering about the tax-gathering and profit-draining aspect of the scheme.   

The consultation is open on the proposed New Zealand Income Insurance Scheme, jointly designed Government, Business New Zealand and the New Zealand Council of Trade Unions.  It aims to ensure workers made redundant, laid off, or who have to stop working because of a health condition or disability, receive 80 per cent of their usual salary for up to seven months, up to the current ACC cap.

The proposal includes up to twelve months of support for re-training.

Finance Minister Grant Robertson said such a scheme was an enduring solution that would protect people and the economy after job losses, like those seen after crises like the Canterbury earthquakes and COVID-19.

“As New Zealand moves beyond the economic and social impacts of COVID-19, there are important lessons to be learned from the way we were able to support one another through an unprecedented series of challenges. 

“During COVID-19, the Government protected livelihoods with the Wage Subsidy Scheme and Resurgence Support Payment. This was primarily done through keeping people in their existing jobs and supporting businesses most directly affected by the pandemic.

“We think it’s time for an enduring solution. Business NZ and the CTU jointly approached the government about this work, and we have progressed it through our tripartite Future of Work Forum. A range of Ministers and departments have contributed to the proposals alongside our social partners.”

The proposed scheme provides economic security to individuals directly, and supports them to transition into a good, new job, as opposed to economic support packages which keep people in their existing job even if that role is no longer viable, Robertson said.

The proposals are available at People can have their say by completing a short survey or providing a submission. Consultation closes on 26 April 2022

We are heartened that Opposition leader Christopher Luxon can recognise a new tax when he sees one.

He describes the scheme as a government plan to impose a new tax on every worker and business in the country and he says it could not come at a worse time.

 “With prices growing twice as fast as wages, Kiwi families are worse off than they were 12 months ago under Labour.

“National has big concerns that Grant Robertson’s new unemployment insurance will make the cost of living crisis even worse. It’s a new tax, reducing incomes at a time when with high inflation businesses and workers can’t afford it.”

New Zealand historically has had very good labour market outcomes and a welfare system that, at least until Labour took office, did a good job of acting as a social safety net to help those who had fallen on hard times get back on their feet, Luxon huffed.

 “But the Government wants to impose yet another centralised, bureaucratic welfare scheme on top of the one we already have.

 “The Government should just call this what it is – a Jobs Tax. And then they should abandon it.”

Nor were the Nats impressed with the latest unemployment figures.

National’s Social Development and Employment spokesperson Louise Upston says confirmation that the labour market remains extremely tight makes the Government’s failure to address the benefit dependency crisis even more shameful.

There are almost 90,000 more people on a benefit today than when Labour first took office, she says.

“It will surprise many at a time of low unemployment and high job vacancies that there are still more than 187,000 people sitting on the Jobseeker benefit.

 “It begs the question, what is the Government actually doing to support those on benefits into jobs?”

Kiwis are spending far longer on the benefit too.

“116,000 people now spend more than one year on a Jobseeker benefit, an increase of almost 50,000 since Labour were first elected.

 “We know that the longer someone is stuck on a benefit, the harder it becomes to return to the workforce.

 “The Labour Government has engineered a dependency crisis that is the exact opposite of kindness. We need to be more aspirational for New Zealanders and break the cycle of dependency.”

The Covid news (medical) mentioned in our opening paragraph was that:

  • The Government has secured the delivery of enough rapid antigen tests (RATs) to help New Zealand through a widespread Omicron outbreak in the coming months. It has secured an additional 36 million tests for delivery over the next two months on top of the 16.9 million orders already confirmed for delivery in February. Along with the 5.1 million tests already in the country, New Zealanders will have access to over 55 million rapid antigen tests in the coming two months. A total of 123 million rapid antigen tests have been ordered through to June.  Costs weren’t mentioned.
  • Cabinet has decided to reduce the interval between a person’s primary vaccination course and the booster from 4 months to 3 months – starting this Friday 4 February,

And the Covid news  (more money for some favoured people) tells us:

  • The Arts and Culture Event Support Scheme will be boosted by $70 million, enabling the coverage of the Scheme to be extended  to 31 January 2023 for events that were planned before the move to Red.
  • The Cultural Sector Emergency Relief Fund has been provided an additional $35.5 million to fund more direct support for individuals and organisations.
  • The Screen Production Recovery Fund has been boosted by a further $15 million.
  • The Government is providing a $1.5 million dollar boost to the Prepare Pacific Community Vaccination Fund. This will directly support Pacific community-led initiatives to encourage boosters and child vaccinations.

Latest from the Beehive

Booster interval reduced to three months

A million more New Zealanders over 18 will be eligible for their booster from this Friday, COVID-19 Response Minister Chris Hipkins announced today.

Unemployment falls to lowest level on record

Unemployment has fallen to its lowest level on record as the hard work of business and workers along with the Government’s actions to support the economy during the Delta outbreak resulted in more people in work and higher wages.

Consultation begins on income insurance scheme to protect workers, benefit businesses

An income insurance scheme will better protect workers and incomes, increase the availability of skilled workers and help communities and industries during economic shocks and transitions.

Funding for Pacific Community as we get ready for Omicron

The Government is providing a $1.5 million dollar boost to the Prepare Pacific Community Vaccination Fund.

Government welcomes call to action on World Wetlands Day

The Government has welcomed the call to action for this year’s World Wetlands Day today, which has the theme ‘Wetlands Action for People and Nature’.

Putting Southlanders back in economic driving seat

Southlanders are being put back in the driving seat of their economic future thanks to a newly released work plan launched today.

Government delivers further support for arts and culture sector

Following the Government’s shift to the Red traffic light setting and ongoing pressures on the arts and culture sector, the Government is moving swiftly to cushion the blow, providing further support for the sector, Minister for Arts, Culture and Heritage Carmel Sepuloni announced today.

Government secures extra 36 million rapid antigen tests

The Government has secured the delivery of enough rapid antigen tests (RATs) to help New Zealand through a widespread Omicron outbreak in the coming months.

2 thoughts on “Govt is chuffed as consultations begin on income insurance scheme – but the Nats point out it’s a new tax

  1. How much more of these unemployable leeches can taxpayers be expected to take without an astronomical eruption? They have totally wrecked NZ economy, social structure, now creating a bunch of self-entitled Sepuloni-supporting lazy thieving no-hopers.


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