It’s expensive, it’s unnecessary, it removes people’s choice and now a poll shows most New Zealanders don’t want it. But never mind what the majority of people want, it’s Labour ideology and the government seems set on pushing on with its compulsory income insurance scheme.
The idea is that if you lose your job because of redundancy or disability you won’t need to rush to find a new one, use up your savings or go on a benefit because the income insurance scheme will pay you up to 80 percent of your old wages for up to seven months.
To pay for it, the government will filch $16.50 a week from the average worker’s pay packet, and the same amount from employers. This at a time of galloping inflation and high mortgage interest rates, leaving many families’ budgets seriously stretched.
It’s also a period of near record low unemployment – hardly a time when many businesses are contemplating making anyone redundant. Quite the opposite in fact: bosses in most sectors are tearing their hair out over how to plug workforce gaps.
The scheme would be ripe for rorts. Some businesses might give up the fight to stay afloat earlier than otherwise, knowing workers have a backstop. And some workers might treat an 80% of wages 6-month subsidy as a bit of an extended holiday. A minus for the nation’s productivity.
A Newshub-Reid Research poll conducted last week found only 33% of respondents supported the scheme, with around 50% opposed and the remaining 17% unsure.
Federated Farmers is opposed to the scheme on a number of fronts. We believe that employees and employers should be able to decide to what level, if any, of risk they choose to insure themselves against. This is particularly relevant for a large segment of the agricultural workforce who are unlikely to be in a position to benefit from the scheme and are operating in an environment of thousands of unfilled jobs in the sector.
Employers and the self-employed already pay into ACC to cover workers left injured or disabled.
Newshub presented its survey findings to Finance Minister Grant Robertson but he shrugged it off. It’s “something we’re committed to”, he said.
The compulsion for someone to join and pay, even if they don’t see any risk with their own circumstances, is another thing that grates. Federated Farmers has suggested that if the scheme is to proceed, it is as an opt-out model similar to KiwiSaver, where employees can voluntarily leave the scheme if they choose to do so.
Fingers crossed as the general election looms closer that Labour begins to realise that tying more and more New Zealanders up in over-regulation and extra cost wins no friends – nor votes.
Richard McIntyre is a Federated Farmers National Board member and spokesperson for employment.
