The $6.8 million package for businesses offered last week by the government was an insult: business mentors and export junkets – just what people who aren’t allowed to access their businesses need. Now, Key and Bennett have announced they are slashing wage support and and the job loss payment. It will hammer the Christchurch economy.
So far, the government has been paying about 8,000 businesses $500 per week per full-time worker and $300 per part-time worker to subsidise the wages of about 60,000 workers. Over 6,000 more workers have seen their jobs destroyed by the quake. They have been getting $400 a week.
Those payments are to be cut.
The current rates will stay for three weeks, then the second round begins. For the first fortnight, the wage subsidy will stay the same. The fortnight after they’ll be cut to $375 per full-time worker and $225 per part-time worker, the fortnight after $250 and $150. Then, nothing.
The job loss payment will remain just for three more weeks then it will be abolished. People will have to apply for an ordinary benefit. If they can get one – and, remember, most unemployed people are ineligible for the dole – they can get a top-up as well: $50 for a single person, $80 for a couple, up to $110 for a person with kids. And that will end in six weeks.
What does the government think will happen as it first slashes and then eliminates these payments that are supporting 30% of the Christchurch workforce? Don’t they realise that more of the businesses will collapse? Do they think that all the extra unemployed plus the 6,000 who have lost their jobs already from the quake plus the 15,000 who were already unemployed are just going to find jobs with the CBD closed down and the oil price strangling the rest of the country?
Ludicrous. All that will happen is more businesses will fold and more workers will be made unemployed. The government is sucking money and jobs out of the Christchurch. It will force families to default on their mortgage and to leave the city. It will create a vicious cycle.
Maybe if there was some action on the residential rebuilding that will be needed that would create some jobs but there just isn’t any. The Japanese tsunami was 18 days ago and they’re already erecting temporary housing. Here, five weeks after the quake, the government is still talking about building temporary housing at some undefined time in the future.
The Righties will protest that continuing to support all these workers is unaffordable. Tell me that once the government has canceled the half a million in tax cuts that the National MPs pocketed have pocketed from their salaries alone. Or when they cut the billion dollar a year subsidy to polluters under their ETS. Or when they cut funding for white elephant motorways where the costs exceed the benefits. Helping Christchurch workers isn’t unaffordable, it comes down to choices.
I’ve said it before and I’ll say it again: it’s a travesty that there was no plan in place to deal with mass job dislocation and loss from a large disaster. Instead, we have to hope that when a disaster hits there will be a government with the competence, will, and fiscal resources to make something up on the spot. Not good enough. We need universal EQC insurance for homes and businesses tagged on to rates, we need a tiny (less than 0.1%) income levy for universal disaster income insurance, and we need plans for constructing mass temporary housing quickly.