Reactions to job insurance plan mixed
‘‘They could start by giving a huge tax incentive to the people who want to get ahead in the lower income category. ’’
A new ACC-style unemployment insurance scheme proposed by the Government has drawn fire, praise and ‘‘maybes’’ from Waikato businesses and unions.
The scheme, announced this week, would be funded by a 1.39 per cent levy on pay, matched by employers, providing laid-off workers with support for up to seven months.
Pukeatua dairy farmer Chris Lewis, an employment spokesman nationally for Federated Farmers, said his workers he had talked to felt ‘‘it’s another thing coming out of my wage packet’’.
Net pay reductions could affect spending in the wider economy. The scheme could also contribute to bigger labour shortages as people would be able to take more time to get another job, said Lewis, who has five workers and up to three casuals.
It was better to keep people in ‘‘the system’’ of work as much as possible.
An opponent of the scheme is Robin Ratcliffe, managing director of Waikato-headquartered heavy trailers manufacturing giant Modern Transport Engineers, who employs about 200 people.
‘‘I think it shows the immaturity of the Government,’’ Ratcliffe said.
He would prefer to see more done to stimulate the economy and jobs growth, and to get people into housing.
‘‘They could start by giving a huge tax incentive to the people who want to get ahead in the lower income category.’’
Noting his firm was 18 months behind in orders and could do with a hundred more staff, Ratcliffe said the scheme was ‘‘absolutely stupid’’, adding that it was ‘‘putting the ambulance at the bottom of the cliff.’’
However, Pam Roa, managing director of Frankton-based food processing machinery maker Longveld, felt the pros outweighed the cons.
‘‘A lot of [small and medium enterprises] don’t provide for redundancy payouts in their employment agreements,’’ Roa said, adding that the majority of people in New Zealand work for such businesses.
She agreed the levy would be an additional cost for businesses.
The Waikato-based national secretary of the NZ Dairy Workers Union, Chris Flatt, felt the scheme was ‘‘bold and what we’ve been looking for’’.
‘‘Everyone pays a little bit in and you get help in your time of need,’’ said Flatt, whose union has thousands of members in Waikato and Bay of Plenty.
While many members were covered by redundancy clauses, the scheme could add to their sense of security and give people time to retrain for another good job rather than just accept anything new.
The national secretary of the Public Service Association (PSA), Kerry Davies, grew up in Thames, which was hit by the closure of the Toyota factory, which led to people leaving town and flow-on economic effects locally.
The PSA was generally supportive of the plan, noting some recent big disruptions that had hit the economy. A key question, Davies said, was ‘‘as people move from traditional jobs, how do you support them to retrain and move into new jobs?’’.
Wintec chief executive Dave Christiansen said it was hard to argue against the outcome being sought by the scheme, noting that anything reducing the impact of job losses on employees and their families ‘‘has to be a good outcome, or at least a less bad income’’.
While he was sure there would be disagreement over the best policy, ‘‘pretty much anything will, for many workers, be better than what we have had in place’’.
The Hamilton City Council employs about 1300 staff and chief executive Lance Vervoort said the scheme had merit, was wellintentioned ‘‘especially in these uncertain times’’ and could help in unforeseen circumstances.
‘‘From a humane point of view, it helps people avoid a crisis in their lives,’’ he said.