Govt accused of buying votes from middle-class
The Government is being accused of rushing through a $490 a week unemployment payment in an attempt to buy middle-class votes for the September election, as one in 10 Kiwis fail to pay the mortgage or rent.
A $1.2 billion ‘‘income relief’’ scheme for workers who lose jobs because of the coronavirus crisis, which pays roughly double the usual unemployment benefit, has hit a dud note with both Labour’s advisors and the Opposition — both concerned the Government intends to set up a ‘‘two-tier’’ benefit system.
The kickback comes as a survey of 3000 New Zealanders, released by the Government’s Commission for Financial Capability, shows the majority of households are in personal financial crisis, or are close to falling into crisis — with one in 10 households missing a mortgage or rent payment due to the coronavirus crisis.
More than 40,000 people have asked for the unemployment benefit since the beginning of a nationwide lockdown in lateMarch, and in April there was a spike in hardship grants being given to people to put food on the table.
National Party social development spokeswoman Louise Upston said the scheme was an ‘‘absolute admission’’ the Government had failed to save jobs, and it was ‘‘far too cute’’ that both the wage subsidy and income payments would carry on until after the election.
The scheme was not announced as part of the 2020 Budget and appeared hastily arranged, she said. And it allowed a person receiving a redundancy package of up to $30,000, with a partner earning up to $2000 each week, or roughly $100,000 a year before tax, to claim the full $490 each week.
‘‘[For] the person that stands in the queue outside MSD who doesn’t have enough money this week, why are they less worthy than the household who had an income of $200,000, and have got $29,000 grand in redundancy payment? That is just grossly unfair.
‘‘Those that are the hardest hit, [Labour] are taking those voters for granted ... This [payment] is going for another group, who they might hope to convert, and that is not how you have a welfare system.’’
Social Development Minister Carmel Sepuloni yesterday, facing questions about the income relief scheme in the House, rejected any assertion the Government had created a ‘‘two-tier benefit system’’, saying the scheme was a temporary relief for unprecedented circumstances.
The temporary weekly ‘‘income relief’’ payments will be set at
$490 a week for fulltime workers and $250 a week for part-time workers who lost their jobs due to
Covid-19 after March 1, and will be available until November.
Sepuloni said the Opposition needed to read the Welfare Advisory Group (WEAG) report on welfare reform, which advocated for ‘‘redundancy support policies to better support displaced workers’’.
‘‘We are exploring whether this
is the type of thing that we might want to keep as part of our offering through the welfare system, but that is an exploration; we haven’t finished that work.’’
Charles Waldegrave, a social policy researcher and member of WEAG, said the group’s report contained no recommendation that the Government create a second tier of unemployment payments for middle-income earners.
He said while such ‘‘social insurance’’ schemes were not bad ‘‘per se’’, and the support for unemployed workers was needed, the $490 a week should be extended to all.
‘‘They’ve been very careful up until now with their responses [to the Covid crisis], but they’ve clearly rushed this one in, and the unintended consequence is a twotiered benefit system. ‘‘
Children’s Commissioner Judge Andrew Becroft said the income relief payments were great, for the families that would receive it. But the need for the payments proved how the usual jobseeker benefit was insufficient.
‘‘That sort of initiative, should apply to all people who lose a job, and there were plenty of those before Covid.’’
The policy has caused ructions within the coalition Government. Green co-leader Marama Davidson said she supported the payments but was concerned about talk of them being built into the system.