Business New Zealand chief executive Kirk Hope said members of the organisation would more likely support the government’s $3.5bn income insurance scheme if it dropped cover for sickness and disability.
BusinessNZ is one of three designing parties of the government-proposed New Zealand income insurance scheme that would pay up to 80% of a worker’s wages up to seven months if they lost their job. The plan would be funded by a 1.39% levy on businesses and employees.
While the government, BusinessNZ, and the Council of Trade Unions have supported the scheme to consultation, they are not obliged to support whatever emerges from the consultation process, which ends later this month.
Hope said the scheme had expanded in scope while the three groups negotiated over what it should look like.
“When we started the conversation with the CTU, it was about a redundancy scheme,” he said in an interview with the New Zealand Herald. “It’s expanded. The government wanted to expand that to include health and disability.”
Hope admitted that businesses would probably find the original scheme – without health and disability cover – “more palatable” as far as it halved the costs, but said it was too early to say that BusinessNZ would not support the scheme after the consultation period ended.
For BusinessNZ, it was "really important to have a national conversation about [the scheme]” considering the difficulty of having a levy-funded income insurance scheme amid a pandemic and mounting cost pressures.
"It's an important message for the government to heed – businesses are really struggling,” Hope said. “There are a range of other significant factors that make the timing of this a difficult thing. That's going to be a challenge."
Hope also pointed out that the government had other policy options in case the scheme did not pull through, including a 2008 report “done by a working group with CTU, BusinessNZ, and government officials” outlining a range of options in relation to restructuring redundancy.
Last year, BusinessNZ refused to be a part of the government’s fair pay agreements (FPA) process, calling it “unfair and out of touch”. Unemployment insurance was a different matter, with BusinessNZ itself helping design the scheme, the New Zealand Herald reported.
