Social insurance, a premium not afforded to all.

Written By: - Date published: 12:02 pm, June 20th, 2021 - 59 comments
Categories: benefits, Economy, grant robertson, Politics, Social issues, unemployment, Unions, workers' rights - Tags: , ,

Budget this year delivered in ways that many of us have been waiting for. Community groups, Iwi, beneficiaries, environmentalists and more, all agreed on Budget Day that they were quietly pleased to see groups they represent receive funding. For many, that funding is just a first step. One of the details announced in the budget was funding to explore a ‘social unemployment insurance’ scheme. This scheme has been pushed by the Council of Trade Unions and Business NZ, which will work with the Government in a newly set-up Tripartite Working Party.

The pandemic and lockdown last year put the thinking around this scheme in motion. Advocates for this scheme will state that it will give temporary protection to workers who have lost their jobs. On presentation it is a social security net.

Grant Robertson, as the Minister of Finance, praised the intention of the scheme: “Like ACC for accidents, a Social Unemployment Insurance scheme would cushion the impact of a job loss. It would give workers the financial stability to find the right job for their skills, or to retrain for a new, fulfilling career path.”

This is by no means something to be against.

When we dig into it though, we realise it is no safety net. It’s a parachute that slows our drop, giving us time, before we hit that real net – down so far below. Social Unemployment Insurance is a temporary relief from vertigo. Like any insurance, it comes with its pre-requisites and pages of conditions in small typeset that are all too easy to ignore. This insurance seduces the policy-holder by playing into your fear of uncertainty, which it offers protection from. Like any insurance there are ifs, buts and maybes.

As a Union Organiser, I was surprised that this scheme had not been discussed within Union circles. As I go around worksites, ideas are talked through in office tea-rooms, corridors or storerooms. Ideas are tested, questioned – require strategic thinking and may require campaigning. I wouldn’t be surprised if you haven’t heard much about social unemployment insurance either. All too quietly, this scheme will set up a two-tier unemployment system.

The scheme would ensure workers retain up to 80 percent of the income they were receiving for a period after they lose their jobs. When I was growing up, I saw a similar scheme in place. It was not universal and did not provide that long-term security we should be asking from our welfare state. I grew up in Spain, where unemployment entitlement is calculated on the length of employment and salary rate of the income the worker received prior to becoming unemployed. My mother during the mid-2000s lost several jobs due to the changing job market. What I learnt was that schemes such as the one that the Tripartite is designing did nothing for those on low-paid precarious jobs/. I learnt that when there are two systems, and one works for most, it is easy to forget about those on that system that doesn’t work.

If you are unemployed today you may be receiving as little as $202 a week – this rises based on age, accommodation supplements, or children. No matter- benefit levels are too low for rising rents, expensive winter bills, medical bills, fluctuating fuel costs… If you are employed and lose your job, your standard of living, what you eat and who you live with, could change quickly. Social Unemployment Insurance protects the privilege of the employed against the compromise and struggle of weekly budgets on a benefit. The scheme has been put forward so workers who have lost their job are given time and income to find a job that fits their skills, or to re-train. The same opportunities are not afforded to Kiwis on a benefit.

By setting up the Tripartite group, the Government unashamedly admits that benefit levels are not good enough. It then focuses its attention elsewhere.

Social Unemployment Insurance is not addressing the elephant in the room – we collectively agree that our benefits are too low – even after the increases set out in the 2021 Budget. Instead of increasing these benefits, the Tripartite group formed by the Government, Council of Trade Unions and Business NZ will set up a two-tier system for the unemployed.

We should be focusing on raising the floor.

This is something that workers collectively in unions have a proud history of doing. It’s not just at work where we are active, but this is where you will be most familiar with what we have won for all of us. Together we push for safer, fairer, more inclusive workplaces. We have increased annual leave, improved Health and Safety laws since the Pike River disaster, we have achieved new leave for victims of domestic abuse and expanded bereavement leave so that losing a baby during pregnancy or childbirth is a given, not something that has to be asked for. In the last month we pushed back against the government’s intended Pay Freeze in the Public Sector. Outside our workspaces we should be advocating for beneficiaries the same way we as union members are front and centre in climate marches, at Waitangi Day, at Pride.

When it comes to benefits, we should be raising the floor instead of closing the door behind us. Raising the floor looks like a benefit system where benefit levels are liveable and so that beneficiaries can live with dignity while they focus on their health, or their family, or their study, without compromise.

I need to be clear- this project has not yet received funding and it is a long way from being implemented, but knowing that the Government has committed to sitting down and nutting this scheme out with the Council of Trade Unions and Business NZ says it all.

This scheme, by building an alternative to the benefits that WINZ pays, risks creating a small tear in our shared social net, it privatises the risk of unemployment and erodes our advocacy to increase benefits and improve beneficiary rights. Future decisions regarding unemployment will be split into two with a risk that benefit levels will stagnate or reduce.

Conditions outside of employment should concern all of us.

As a Union member I, with many others, hear the waiata and stand: ‘E Tu, Kahikatea’! and repeat the last line: ‘Tātou, Tātou e’.

Daniel Benson-Guiu
is a union member and organiser based in Ōtepoti – Dunedin of Catalan origin.

59 comments on “Social insurance, a premium not afforded to all. ”

  • Comments are now closed

  1. weka 1
    20 June 2021 at 12:41 pm

    Wow, thank you so much for both critiquing Labour’s intentions and framing solutions as solidarity between workers and beneficiaries. Great post.

  2. Patricia Bremner 2
    20 June 2021 at 2:16 pm

    Any system must be fair and for all. Good thought provoking post.

  3. Descendant Of Smith 3
    20 June 2021 at 2:21 pm

    There's a line oft repeated in Fallout – a post apocalyptic game.

    "War, War never changes"

    This is true of capitalist attacks on the welfare system and labour in bed with the capitalists.

    FFS Labour just increase benefits back to the NZS rate like they used to be. You had both a mandate and an opportunity to do this and you failed. You are a bunch of numpties.

    I had in an earlier post cause to link to the Jobs newsletter. This below from the very first issue.

    FROM DOLE TO JOB SEARCH

    For people who did not find a job after six months, the Employers believe they should then go on the unemployment benefit under an individual case management, and be required to undertake training, work experience, or subsidised work as directed.

    Source The New Zealand Herald 20 September 1994 "Employers Federation calls for cuts to dole" by Anamike Vasil

    http://www.jobsletter.org.nz/jbl00100.htm

    • The dole should be replaced by a Job Search allowance in the first six months after a person loses their job. This is one of the main recommendations in the Employers Federation submission to the Employment Taskforce. They envisage that the allowance should be paid at a higher rate than the unemployment benefit, to enable the person to pay for the costs of CV preparation, papers, transport and clothing. In this period the person would be responsible for undertaking their own job search without the help of the Employment Service.

      __________________________________________

      From me:

      Labour, Labour never changes!

    • Pat 3.1
      20 June 2021 at 8:08 pm

      https://www.mbie.govt.nz/dmsdocument/12803-officials-discussion-document-support-displaced-workers

      A proposal that could have been written by Act….and the CTU co authors!

      "The goal is therefore not to eliminate displacement. The goal is rather to protect workers while allowing for a continual process of displacement and re-employment in good jobs. In such an economy, firms would have the continued option of changing their labour needs, while workers could be assured of support towards suitable reemployment, without substantial loss of income through a period of job search, and retraining. Working people could be confident that displacement would be more of a “sideways step” in the labour market, rather than (potentially) being a significant “downwards step”. This is the essence of the flexicurity approach, where the objective is to protect displaced workers, not jobs. The approach promotes both productivity, and inclusion"

      • Descendant Of Smith 3.1.1
        20 June 2021 at 9:01 pm

        Compare that to how the system was described in the 1976 yearbook.

        MAIN FEATURES OF SOCIAL SECURITY SYSTEM—The present system cannot be characterised according to any single principle, theory, or formula. As already stated, it has evolved from changing needs and experience in dealing with them. For example, it looks like a form of community insurance, but is not financed, funded, or administered on an insurance basis. It is financed from general taxation; but a person's benefit bears no relation to his tax contribution. While basically income-tested and selective as to need within clashes of benefit, it is also universally applied without regard to other income or means in three main cases (superannuation, family, and medical benefits) and in the lesser miners' benefit. It transfers income from the more to the less affluent mainly on the basis of greatest help for those in greatest need. It reflects the traditional humanitarian, egalitarian, and pragmatic approach of New Zealanders and, most importantly, reflects an acceptance of community responsibility for social welfare.

        1. Funding is through taxation. The right to "contract out" on the grounds that the individual may not need, or qualify for, public aid is denied in the community interest, as it is with other State services such as education, defence, police.

          And lest we need reminding the rates for NZS and benefit were the same:

          Age, Invalids and Sickness
          single unmarried over 18 $28-75
          Unemployment
          single unmarried over 20 $28-75
          Superannuation
          unmarried person $28-75

          https://www3.stats.govt.nz/New_Zealand_Official_Yearbooks/1976/NZOYB_1976.html#idchapter_1_53820

          And lest we forget many of those for whom there were no jobs in the private sector were given jobs in the public service – particularly those with disabilities and school leavers. It was part of the government/countries welfare system – a part of welfare the previous generations like not to mention – oh and then there was of course massive institutionalisation where they hid away many of those who were unwell, had disabilities, had learning difficulties, could not perform certain tasks like tying your shoelaces at 5 (what do you mean you never had shoes til you went to school) or didn't know their alphabet (never mind their parents were illiterate and couldn't teach them) – yep national standards and milestones sucked back then too.

          Anyway worked quite well – it's not like anyone was abused – out of sight out of mind.

        • Pat 3.1.1.1
          20 June 2021 at 9:37 pm

          "Anyway worked quite well – it's not like anyone was abused – out of sight out of mind."

          ???

          • Descendant Of Smith 3.1.1.1.1
            20 June 2021 at 9:41 pm

            institutionalisation

            We now castigate those who we institutionalised previously – if we haven’t thrown them in jail.

            • Pat 3.1.1.1.1.1
              20 June 2021 at 9:50 pm

              Yes, I gathered that.

              What is causing my confusion is its confliction with the rest of the post.

              Ah you have expanded…..unfortunately the previous institutionalisation had a blind eye turned to the shortcomings and corruption of purpose…..the welfare system however had a whole of society perspective as opposed to what is being promoted by this latest proposal.

              • Descendant Of Smith …
                20 June 2021 at 10:05 pm

                In essence we pretend now that there are jobs in the private sector for everyone and all you need to do is get off your arse to get one when the truth is there never was enough jobs for everyone. Unemployment was just well hidden. At least the public service jobs gave a lot more dignity than the institutional imprisonments.

      • Craig Hall 3.1.2
        21 June 2021 at 2:10 pm

        That would also be the reasoning behind the oft-praised Scandinavian frameworks, particularly Danish flexicurity as at the end. They also have good minimum standards so that people are not left to starve if they don't qualify for the higher rates.

  4. Ad 4
    20 June 2021 at 3:09 pm

    "We should be focusing on raising the floor."

    I agree with this direction. We saw the 2-tier approach to losing your job during COVID's early months, and it was inequitable.

    This government has indeed raised the economic floor by:

    – raising the minimum wage

    – instigating the Living Wage

    – choking off entire industries which are low paid and seasonal (low quality tertiary education, horticulture, low-end tourism, hospitality)

    – shutting down most immigration

    – targeting reform os specific industries it wants to promote, and

    – intervened massively with subsidising the entire business community to keep GDP growth high and unemployment heading for 4% and below.

    I seriously think that's enough intervention for now.

    The best direction is for unions and employers keep the pressure on this government to increase benefit rates, lower taxes for beneficiaries, and continuing to raise the floor of the wage earners.

    • weka 4.1
      20 June 2021 at 3:22 pm

      The post talked about raising the floor of welfare, which Labour aren’t doing relative to the rest of society. By the time the benefit increases kick in next year, housing costs will have increased also and long term beneficiaries, some of the poorest people in the country, will have had another 12 months of losing ground. For many people the increase won’t make up for those, some will tread water, others will sink.

      Someone needs to do an OIA request on just how much of an increase the lower end get. Lots of people won’t get the full amount, some will get a few dollars. Still no fixes for people that can’t work. Too bad I guess.

      • ghostwhowalksnz 4.1.1
        20 June 2021 at 7:52 pm

        "By the time the benefit increases kick in next year"

        As mentioned in the budget they kicked in this month and again next year.

        For an adult on the single rate with not much accomodation benefit, a friend who I have asked the details for has gone from about $215 pw in the hand from the last government to $279 pw in the hand.

        'Lots of people won’t get the full amount, some will get a few dollars' that claim doesnt have much basis, as I have looked closely at one persons benefit and it shows different ( I have computer skills to help an older person through the online hurdles) who would be on the lowest level.

        MSD has an online calculator where those interested can try various scenarios to check these figures. I really do wish people would base claims on benefits on real situations rather than using 'what they think'

        • weka 4.1.1.1
          21 June 2021 at 12:41 pm

          Mate, I’m a long term beneficiary with direct experience of using the very complicated WINZ formulas that determine how we get paid. Ive also been networking with beneficiaries for years, including here on TS. It’s a known issue that increases in core benefits don’t automatically turn up in people’s ban accounts.

          please link to the calculator you are referring to.

      • KSaysHi 4.1.2
        21 June 2021 at 11:38 am

        I don't think an OIA would give that information, mostly because MSD doesn't appear to have modeled things correctly in the first place.

        The evidence for this is the public statements made by the government that "nobody would be worse" off under the Families Package changes is incorrect. MSD should have known if they modeled it correctly, and secondly because I wrote to them in late 2019 explaining why some people would actually lose money if they increased the base rate.

        In my email I pointed out that because of the calculations it would be possible for some people to lose $60/week when the base rate increased. These are the same people and their children who were suffering the most. Requested that the base rate increase not go ahead until this issue was dealt with. Response I got back was that it had been forwarded on to the appropriate person, so much for that.

        If that weren't enough I read the announcement in Stuff that everyone on a benefit could earn $160/wk without penalty. I wrote a complaint to Stuff stating this information was inaccurate and that the same group penalised from the base rate increases would actually end up worse off financially if they earned money. Some people would have money deducted well before they ever met their actual costs. Told Stuff that this could be verified by any beneficiary advocate group, or Work and Income themselves. No action was taken by Stuff, rather the reporter who wrote the piece sent me a link back to the MSD press release which was of course inaccurate.

        I know I'm right, the ministry must know I'm right, and if I could figure out to extract that information an OIA would prove it.

        FYI a quick search of beneficiary groups on FB confirms this too with comments from people who have in fact lost money after the benefit rate increases. Some even go into detail about how if they earn money their benefits reduce at the gross amount earned, leaving them worse off. This is the floor that needs moving!!

        • Rosemary McDonald 4.1.2.1
          21 June 2021 at 12:04 pm

          No action was taken by Stuff,

          The standard of what passes for journalism at Stuff is so very low it is just about subterranean.

          It might be better if they indeed did nothing.

          The Covid media support $$$ were well invested.

        • Craig Hall 4.1.2.2
          21 June 2021 at 2:15 pm

          OIA for all policy documents and ministerial correspondence relating to the increases – it will be in there somewhere.

          Alternatively, since there real life examples of the issue, just refer to the examples as clear evidence that some beneficiaries are worse off as a rebuttal of any statements along the lines of "all beneficiaries are better off".

          • weka 4.1.2.2.1
            21 June 2021 at 4:11 pm

            Won’t it only be there if they’ve bothered to discuss the issue?

            • Craig Hall 4.1.2.2.1.1
              24 June 2021 at 1:34 pm

              I know people who work at MSD and the information is calculated somewhere at MSD, so it should have been provided to the Minister.

              • weka …
                24 June 2021 at 9:31 pm

                to clarify, you believe the MSD will have calculated how many people get the full amount and those that get partial increases?

                • Craig Hall …
                  28 June 2021 at 4:47 pm

                  Yes, if for no other reason than to calculate the exact cost of it for the Budget.

                  • weka …
                    28 June 2021 at 4:58 pm

                    ah, of course, good point. So it would be worth someone doing an OIA request.

                    Wording?

                    "OIA for all policy documents and ministerial correspondence relating to the increases – it will be in there somewhere." seems like it would yield a large amount of information to then have to work through

                    • Craig Hall …
                      28 June 2021 at 10:57 pm

                      OIA for all policy documents, ministerial correspondence and calculations regarding budget costs for the increases to the benefits in Budget 2021. CC Treasury as well. That's probably the easiest way to see if they included anything or not, albeit might involve a lot of documents to wade through. Edit: could reword this to be “all advice and analyses” as mentioned below.

                      If you want to know how many didn't get the full amount, OIA for total number of beneficiaries who will receive the full amount of the benefit increases without any abatement or loss of other entitlements, and total number of beneficiaries who will not receive the full amount of without any abatement or loss of other entitlements, and a breakdown of the latter into levels of abatement and loss of entitlements in $500/year increments (or $10/week).

                      If you are targeting a particular level of abatement or a loss of income from the changes, ask for that e.g. OIA for total number of beneficiaries for whom the benefit increases in Budget 2021 will result in a reduction of their total income received from MSD with a separate total for each increase.

                      https://msd.govt.nz/about-msd-and-our-work/publications-resources/official-information-responses/responses-to-official-information-act-requests.html might also have some interesting information.

                      Edit: looking through some of those, “all advice and analyses” was a good phrase that produced some useful-looking material.

        • weka 4.1.2.3
          21 June 2021 at 4:10 pm

          Would love to have more discussion with you on this. I’d be in to putting up a post about it. Links to the MSD press releases would be a good start.

          I’be run basic situations through a spreadsheet with the core and supplementaries, I usually use a single person no kids to simplify.

          I will ask on Twitter too, others have raised this

    • lprent 4.2
      20 June 2021 at 3:33 pm

      I'd like the benefit floor to be raised as well.

      But there are whole lot of people for whom all of the things that you're describing are completely meaningless in their working life. I'm one of them.

      I've never been on a benefit apart from university. But I've had to struggle a number of times with work disappearing and the consequences of that. Based on the people I know who have had similar work losses, the biggest single problem that effectively drops people out of the work force is that they wind up being unable to seek work because their savings run out.

      I put a large part of that down to WINZ itself. It adds costs and time wasting on top of an already difficult transition. And they seldom if ever manage to offer any help at the time it would be most effective.

      Frankly the best thing any government could do is to fire WINZ and replace it with a website and really simple rules.

      The real question you have to ask is why would people want to fund a system, including your extensions above, that seldom works for them when they hit one of the most traumatic issues in their personal life, unexpectedly losing their main source of income.

      This insurance scheme paid for by earners would actually help them. None of the things that you have mentioned will do anything at all for people losing their job..

      • Ad 4.2.1
        20 June 2021 at 5:19 pm

        None of things I listed would be a direct assistance if one were made redundant. The question is what more direct state assistance is really warranted.

        If one's life is so highly geared that one needs employment insurance (such as the need to service a mortgage), surely one would take that out private employment insurance as a responsible mortgage holder? Most banks strongly encourage both employment insurance and life insurance for this reason.

        I can't see why the state would have to step in just so support the risk one took of one's promise to a bank.

        Even Kiwisaver's contributory scheme – available now for 24 years – has made a real difference for just a few.

        • lprent 4.2.1.1
          21 June 2021 at 2:00 pm

          The problem is that you don't have to be highly geared these days. Just renting or having a moderate mortgage in any of the urban centres is usually sufficient to ensure that income surpluses and accessible savings tend toward minimal.

          Most people I know who haven't nearly paid off a mortgage have their accommodation costs approaching half of their nett income after taxes and kiwisaver. They don't have much risk money, nor do they have a capacity to refurbish it after they have had to use it. If there are kids then the costs and risks escalate as well.

          This isn't exactly news. After all accommodation costs were the primary reason that working for families was put in by the state (a far more intrusive state assistance) about 15 years ago. A couple didn't have a surplus that would allow them to start thinking about having a family, and having families was deemed to be a social good for our society and economy.

          We'd only starting to see the demographic results of that now against comparisons in longitudinal studies, although it could be argued (by someone who hasn't looked at it closely) that was a extension of family benefit.

          Even Kiwisaver's contributory scheme – available now for 24 years

          Surely you mean 14 years? It was only put in place in June 2007. The social effect of that has only really just started. I've been using kiwisaver for saving for the last decade since I was 52. I'm only just starting to get to see the ballooning benefit of it in the last few years despite using the maximum saving rates and using MBA control over the managed funds.

          To see the real benefit of it, you'd need to look at the impact it has at something like 24 years, ie from someone who was 42 nearing retirement.

          However I do know that it is having a strong effect for people doing their first home. Barely hear anything else around the young engineers nest making. They start with withdrawing kiwisaver for the deposit.

          … surely one would take that out private employment insurance as a responsible mortgage holder? Most banks strongly encourage both employment insurance and life insurance for this reason.

          Sure, and I use it where and when it is appropriate. Banks mostly sell such insurance – which as far as I can see is their primary interest in it. It is like their interest in kiwisaver schemes. I don't know of any bank kiwisaver schemes that don't look like they are there for profit making for the banks.

          The costs on all of the actuarial private schemes are incredibly high relative to potential benefits. Fine if you are 25 and maintain the scheme through any of lifes vicissitudes. Useless if you're starting and stopping them as you have changes in employment, education, or simply get older. Largely useless when you're 50. Even worse they are extremely limited with any prior condition exemptions.

          For instance it simply isn't worth me getting either life insurance or health insurance (or probably even income insurance) because of prior conditions – ie age, heart condition and a TIA. Those three combined would probably chew up close to 20% of my nett income to get a complete cover.

          This is in the nature of organisations who try to make a profit from gambling – they massively stack the odds in their favour. Not to mention that insurance companies are notoriously a pain to extract the benefits you're paying for in a timely fashion.

          But realistically I don't need those, and many people don't. I need a transition policy so that the backup plans like selling property or shifting jobs have time to work. Currently that is sitting in a deposit box not doing much of a return because that makes it the safest and easiest to access. It is also way cheaper. But I doubt that many people have sufficient resources to do that.

          Frankly private industry is pretty much of a rort at this long term societal level. Just look at the the US for some prime examples.

          A state system with a low profit motive both provides a market floor for the private rorts, and it tends to stick closer to the purpose rather than trying to sell expensive and often useless policies.

          See Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry for some of these with our Australian banks.

      • KSaysHi 4.2.2
        21 June 2021 at 11:05 am

        Good call on the website, although they would need to ensure access to the internet was available throughout NZ, provide some type of device to allow access and ensure those who can't read/see/have other issues are given equal access. Even so, it would be much better than the mess we have at the moment which is heavy on staff time and low on service.

      • Craig Hall 4.2.3
        21 June 2021 at 2:58 pm

        This insurance scheme paid for by earners would actually help them.

        This is politically important – for any system to stick, it has to be popular enough that future governments can't discard it, particularly after the next election (after 5+ years, it becomes harder). A scheme which is widely available is far more likely to meet that political requirement than a narrower scheme.

        That's one of the reasons the welfare system was able to reduced in the 90s and not returned in the 00s without serious political damage, while Working For Families largely survived with minimal changes through 9 years of National.

  5. lprent 5
    20 June 2021 at 3:21 pm

    Basically the author of this post clearly doesn't understand what this particular insurance scheme is for. It isn't to gently drop people from working to living on the benefit – which is what it seems to imply with this statement

    When we dig into it though, we realise it is no safety net. It’s a parachute that slows our drop, giving us time, before we hit that real net – down so far below. Social Unemployment Insurance is a temporary relief from vertigo.

    The cynical fatalism of that statement seems to assume that finding other work is impossible. Moving to find that work is impossible. That people are too stupid to take the time to change their cost structures. Basically it is a callous and suspect version of what I see happen to people who wind up having to abruptly move jobs.

    The single biggest issue with people and the unemployment benefits is making sure that people thrust out of a paying job are not also thrust immediately from having an income and falling into debt when that income drops.

    You get a few weeks of notice, typically 2-4, or less if you are a contractor. But your life is built around having a regular flow of cash. Most of the time employers take a dim view of employees taking up notice time going to job interviews or talking to WINZ, even if you use your holiday hours to do it. Or even if the company is shutting down and they're giving you 2 weeks notice.

    When you have to run on savings, typically after a couple of final payments, then the shit happens. Few families or individuals have the savings for more than a month or so – especially when they are paying thousands in rent or mortgages. They typically won't have ten money

    This is often the start of the spiral that drops people into crippling debt. On to benefits that (as the author pointed out) are almost impossible to live on without major severe adjustments. While the stand-down periods are currently in abeyance until July, the rule about them is

    In most cases your payments will start from the date your application is approved. If you've left your job without a good reason or have been fired for misconduct, you may need to wait up to 13 weeks before your payments start.

    Typically, the reasons for good reason to leave don't include "the project finished", "my boss is a complete arsehole", "they want to arbitarily cut my hours so I get half of what I earned", and in fact almost anything apart from the company closed down. Even then normally WINZ want you to subsist off any redundancy money before they will provide any benefits at all.

    WINZ and the benefits are of absolutely no use for many if not most people seeking a job. They don't have any jobs worth chasing – it is the clearing house for employer exploitation. They waste time trying to get people to write poor CVs and pissant counselling and budgetry advice that is so old and out of date that is seems to derive from Mrs Beatons cookbook in the 1880s.

    But the things you have to do when losing a well paid job actually cost money. Savings from a diminishing pile go out faster than it originally came in.

    Changing jobs isn't just about starting to do job hunts. It is just as much about pruning costs to extend your ability to job-hunt. You'll need the money for transport to job interviews, getting the appropriate clothes (ie dumping that 1980s tie into the garbage in my case), getting a hair cut, airfares to other cities, or whatever.

    That is because it is rare to find a similar job just hanging around locally. Most of the time it takes months to jump into a new job, even with the absolute best of credentials. These days skills have time limits, they just depreciate away if you haven't maintained them.

    Pruning costs involves doing things like looking for cheaper living costs. If you are renting and can move to cheaper rentals with a 20 days notice, then you need to find a bond and weeks in advance – from the cash at hand. If you have a mortgage, you have to spend time talking to the bank or organising to sell a house. Both of which will typically cost money.

    If you have that hot internet connection or cellphone contract, you need to cough up to drop it back to a minimum service – typically incurring costs on the way through. Clearing the power bill and cutting down the usage takes time.

    You need to dump immediately all recurring costs in the near future like NZ Herald subscriptions or Netflix. You'd be amazed how those mount up.

    Look at selling unwanted gear like computers, furniture, cars. Apart from any cash generated, it helps to reduce relocation costs and rego and WOF.

    If you have kids, then you have to look at when it'd be possible to shift them from schools.

    I've done all of those things apart from the kids in my odd bouts of months between jobs. I do that even though I usually have some kind of income protection insurance. About the only things that I don't have in kill list are this site, one car and a base computer.

    Because, after all, who in their right mind would want to be at the useless and crapacious vagaries of WINZ? Especially the way that they act like loan shark and their habit of chasing people with arrest warrants

    I think that having a gentle parachute that has near immediate effect is a damn good idea to allow people a better chance at avoiding that fate.

    I know that paying private insurance to do that in the past has helped me a lot. A public scheme is likely to be better value.

  6. Stuart Munro 6
    20 June 2021 at 3:25 pm

    It does seem like an abandonment of the unemployed – a de facto declaration of "I have no sympathy, and take no responsibility, for the policies that have created massive and growing inequality in NZ".

    The idea that the unemployed may be directed to work or undertake training is particularly pernicious – in recent times the suggestions coming out of MSD have been remarkably incongruous – no match with skills or experience – they clearly don't give a toss.

    A brief respite in the mass low-wage immigration has presented a glimmer of hope, but Labour needs someone with a more comprehensive understanding of economics to bat away neoliberal wet dreams like a two-tier benefit system.

    • Craig Hall 6.1
      21 June 2021 at 3:00 pm

      Directing unemployed people into work and training has been a feature of the system for decades – it's hardly new.

      • Pat 6.1.1
        21 June 2021 at 3:28 pm

        Indeed….and dosnt require a financial markets slush fund to reimplement.

        • Craig Hall 6.1.1.1
          24 June 2021 at 11:28 am

          No, but supporting people's income while they look for work or retrain might.

          • Pat 6.1.1.1.1
            24 June 2021 at 11:32 am

            It may…providing the training mechanism is available, the employment exists and the recipient needs or is able to access either or both……and none of this requires an additional/ seperate insurance scheme to provide, especially in an inequitable format.

            • Craig Hall 6.1.1.1.1.1
              24 June 2021 at 1:59 pm

              Many families have commitments based on household incomes of $80-$100,000 – even an increased benefit will not be nearly enough to keep those families afloat for any extended length of time. This is currently recognised through TAS, so it's already something we acknowledge is required, but have implemented extremely poorly.

              It also seems unhelpful for society long term for people to lose their houses because the increased unemployment benefit doesn't pay their mortgage or other commitments which ultimately result in requiring them to sell their house or worse, a mortgagee sale. Families break up and occasionally people commit suicide over financial catastrophes like that.

              There is also the political element that one day the Nats or ACT will campaign on cutting benefits for bludgers and cutting taxes for hardworking New Zealanders, and they will eventually get in. Social insurance funded through levies is much harder to unroll once it's implemented.

              • Pat …
                24 June 2021 at 3:01 pm

                And none of those issues are solved by this policy…..but it does add additional costs to especially those who can least afford it and surprise ,surprise it does provide more public funds to grow an already inflated equity market, and provide additional underwriting to the banks mortgage books.

                • Craig Hall …
                  28 June 2021 at 4:45 pm

                  Sure they are – the living wage from 1 September will be over $70,000 p.a. for a family, and it seems remarkably unlikely that any government or any policy tank will ever put forward a benefit that pays that much long term.

                  • Pat …
                    28 June 2021 at 5:11 pm

                    Whats the living wage have to do with this policy?….absolutely nothing.

                    You are advocating to remove income from the lowest paid (not to mention the almost certain removal of any remaining redundancy clauses) to improve the situation of currently well remunerated should they become unemployed and all while not improving the employment opportunities for anyone….the proposal is a dog.

                    • Descendant Of Smith …
                      28 June 2021 at 5:57 pm

                      It's a dog's poo. I quite like my dogs and they would easily turn their noses up at this proposal.

                      I wonder what other past policies that were shite that Labour can come up with:

                      1. Increased bootcamps
                      2. Have sole parents and sick and disabled people classed as unemployed to keep unemployed numbers higher than they are and to keep downward pressure on wages
                      3: Freeze public servants wages
                      4. Keep benefits lower than NZS
                      5. Social obligations and drug testing
                      6. Stop benefits if you don't see your "case manager"
                      7. Take 25% of your benefit for housing you in an expensive motel cause it is fairer
                      8. Put mentally unwell people in prison and drug addicts in pysch units while they withdraw

                      What they won't do is make businesses put money aside for compulsory redundancy payments i.e. in a trust held aside
                      What they won't do is make businesses pay my PAYE and student loan re-payments paid out of my wages direct to IRD each pay so they can't be stolen
                      What they won't do is stop people from stealing such money (or subbies payments) then closing down their business and starting up an identical one the following day.

                      Nope they are trying to say they are good guys for lifting peoples pay and then take it off them again to pay for employers costs. Just like tax cuts – gave tax cuts to the poor then increased costs such as GST so the poor were no better off – the rich on the other hand much better off and now taking the poor's money through rents.

                      Fascists labour and national both are – in bed with employers and capitalists. Enabling the wealthy capitalists and the rentiers.

                    • Pat …
                      28 June 2021 at 7:16 pm

                      I apologise to dogs everywhere

  7. Ed1 7
    20 June 2021 at 3:34 pm

    I agree that this subject needs to be discussed – the following is worth reading:

    https://www.pundit.co.nz/content/unemployment-insurance

    The ACC scheme covers accidents, and is cheaper than commercial insurance, despite National's cynical posturing to try and make private companies appear competitive. Differences in the level of assistance between the results of accident and sickness appear to be growing – I suspect ACC spend quite a bit fighting age-related falls that result in a fracture. That will only be resolved by improving medical services, but ACC does provide some lifetime income benefits. Redundancy is a arguably a decision of an employer, and I believe employers should be responsible for at least some of the cost of their decisions to initiate the problem. That could be by a levy from all employers similar to an ACC levy, or for large companies by requiring payment of income for a period based on a formula. Care would be needed to ensure that it does not however become an encouragement to just wind companies up . . .

    Some (many) 'restructures' are an excuse to get rid of poorer performers who do not meet the criteria for being fired – some companies also wish to bring down the average age of employees for various reasons; finding other employment can be very difficult for those with a patchy work history or that are over say 50. We cannot assume they will all be able to find further work, so it is really just a question as to how quickly they should be forced to reduce costs (if that is even possible) to survive on an unemployment benefit.

    I largely agree with the article – unfortunately we cannot rely on a lot of years before a future government sees the need for cuts to income tax funded by easy pickings – we need most ordinary voters to like the security sufficiently that any changes are not just reversed in total

    • lprent 7.1
      20 June 2021 at 4:18 pm

      Yeah, that link from Brian Easton is pretty much my view point.

      The existing system sucks for allowing people to transition between jobs. Increasing the level benefits will make it suck marginally less.

      But it simply doesn't help for people who could find work within 3-4 months but don't because that they run out of savings during benefit stand downs and the extra costs of job hunting.

      They usually get ankle tapped by the current system that they have been paying for through taxes. Last night I was paying cards against humanity with a friend who has been been is currently going through and has gone through exactly that multiple times.

      Easton does a pretty good job of explaining the context and history of these kinds of systems for NZ.

  8. bwaghorn 8
    20 June 2021 at 3:51 pm

    Completely daft to run a two tier system!

    But maybe unemployment could be funded in the same way acc is funded, a levy on all earners with that money ring fenced for unemployment benefits, with less stable employment like seasonal work ,consultants and casual workers paying a higher levy.

    I see ed1 says similar, ( I tend to chuck my opinion in before reading others so I get to see if any one else thinks the same)

    • Nic the NZer 8.1
      21 June 2021 at 8:17 am

      The issue is when the scheme defaults, which happens when the first major recession hits. Typically the state unemployment insurance schemes in the US rely on federal top ups, and this makes it a political football again. It also seems unreasonable to force funding at different rates per employment category as its still effectively a tax, even if the use is designated.

      • Craig Hall 8.1.1
        21 June 2021 at 2:40 pm

        It does seem like a hypothecated tax rather than a premium. What could be done is higher or lower employer levies (which are part of the design brief) if there are industries which use it more or less.

      • bwaghorn 8.1.2
        21 June 2021 at 4:05 pm

        Acc has never defaulted to my knowledge, shit they are so awash with money they've cut levies at times over the last few years.

        • Nic the NZer 8.1.2.1
          21 June 2021 at 4:59 pm

          However the rate of accidents is relatively uneffected by recessions. This is not true for unemployment which tends to compound in economic cycles.

          I was discussing insurance with the bank and at present you can't buy new unemployment insurance from them as the downside risk is too large, and thats very likely at any rate to be the case.

          Also ACC is really funded on an ongoing basis, as this ultimately must be.

  9. ghostwhowalksnz 9
    20 June 2021 at 5:25 pm

    'unemployed today you may be receiving as little as $202 a week"

    What ? A friend who is in the lowest level for mature age next to no accomodation supplement and has some money in bank is getting $278.96 in the hand next week. Inc the $$ winter subsidy

    https://check.msd.govt.nz/services

    • Descendant Of Smith 9.1
      20 June 2021 at 6:48 pm

      Actually in many cases you get nothing as your spouse/partner works.

  10. Jackel 10
    20 June 2021 at 6:08 pm

    Historically capitalists in this country have sought to attack and dominate workers and their rights rather than include and provide for workers as they have in some other countries. This is a major reason for the economic and social problems we have today and frankly for our comparatively low productivity. Some form of employment insurance is a way to begin a new compact between capital and labour in this country. But it's a bit late.

  11. Foreign waka 11
    20 June 2021 at 7:29 pm

    As long as we don't have an agreement where the government stands philosophically and converts that into a policy that is just and applies to all equally, NZ will not make progress. There are a lot of emotions attached and it can cloud the view. Consideration needs to be given to the workforce of the future. A lot of people will be displaced by automation and how do we deal wit this. The psychology of participation in society and just reward comes into play, it is a human condition. Why are there no efforts by this government to find an agreement on the principle of work, participation in society, compensation, taxation and providing a safety net for those who are out of work or have no source of income. Any social insurance should be at a level that allows participation in the community. Or they should at least articulate what actual public policy is being actively pursued. In clear text and not piecemeal gobbledygook.

  12. Pat 12
    20 June 2021 at 7:37 pm

    https://play.acast.com/s/when-the-facts-change/howdowedesignafairsocialinsurancescheme-

    Well worth the listen and you will understand how poorly thought through (and ineffective) this proposal is.

  13. Michael who failed Civics 13
    21 June 2021 at 12:33 am

    Great research and writing. Social Insurance in Aotearoa is nothing more than a crock of shit from the PSA. Even more alarming is that ACC will run the thing. Workers will face a 3% tax increae, which their employers might also pay. if they lost their jobs, they will have to lodge claims with ACC, in prescribed form. What coud possibly go wrong with these arrangements?

    • Foreign Waka 13.1
      21 June 2021 at 2:09 pm

      This is wrong on so many levels. I think it is a prep for contracting out the admin of the welfare system, a revival of the 80's. More and more it seems that this government is worse than the nats.

    • Craig Hall 13.2
      21 June 2021 at 2:50 pm

      I don't know if you've noticed, but the current system is riddled with inconsistencies and inequities, not to mention the payments being at too low a level. Social insurance is one option for part of addressing that, but even it is implemented, the rest of the system still needs an overhaul.

      Before complaining about the PSA, at least read their whole position around Universal Basic Services, not just one strand of it. https://www.letsdoevenbetter.nz/

      • Descendant Of Smith 13.2.1
        21 June 2021 at 4:45 pm

        I fail to see why workers who have been earning more money than people who are unwell/ disabled etc and have some ability to withstand a short period of unemployment should be paid more than someone who by reason of illness, disability, intellectual capacity etc is rejected long-term by the labour market. It makes very little sense. Both need to live in the same society.

        It's the Presbyterian / Protestant work ethic of deserving and undeserving poor popping it's head up.

        As Martin Luther King said:

        "We have deluded ourselves into believing the myth that capitalism grew and prospered out of the Protestant ethic of hard work and sacrifice. The fact is that capitalism was built on the exploitation and suffering of black slaves and continues to thrive on the exploitation of the poor — both black and white, here and abroad."

        • Craig Hall 13.2.1.1
          28 June 2021 at 4:41 pm

          Because they aren’t mutually exclusive and it's better than the alternative of crashing and burning when someone loses their job and can't find another one at the same income level for 6-12 months.

  14. Pat 14
    21 June 2021 at 6:12 pm

    This proposal has stated that its goal is to allow those who lose their employment have the opportunity and time to retrain for employment.

    Consider the following….

    person 1 has both a bachelor's and master's degree and earns $120,000 pa

    person 2 has no formal qualifications and earns minimum wage,…$42,000 pa

    If they both get made redundant person 1 will receive $8,000 per month

    Person 2 will receive $2,800 per month

    Ask youself who would benefit from further training and who needs the additional support? The person earning $120K per year can be expected to have savings whereas person 2 is likely to have debt.

    Where is the equity?

    Nevermind all the other disparities this proposal entrenches.