The unions, business, and Phil Goff have all gritted their teeth and called the Nats’ $15 million wage subsidy scheme for small businesses affected by the Christchurch earthquake ‘a start’. The problem is, it’s likely to be the end. If the government had any intention of doing more, it would have done it. This scheme will leave workers and employers severely out of pocket, killing businesses and jobs.
There are about 77,000 workers (5% of our workforce) unable to work due to the quake. To ask their employers to continue paying their wages unaided would be a death sentence for many recession-weakened firms.
The Nats’ response is a $350 a week subsidy to firms employing 20 or fewer staff. It will only be for the staff who would work if the business was open, not workers who can’t get to work due to their personal circumstances. The bill is expected to be $15 million (how the Herald got $100 million is anyone’s guess, it can’t possibly be that much)
First off, the quantum of the payment is inadequate. $350 a week is less the minimum full-time wage. It’s less than half the median wage of $750 a week. Employers are ‘asked’ to cover the difference, which will be over $400 a week for half of workers. That will be enough to send firms to the wall. Or they’ll have to stop paying, leaving families to get by on a pittance while trying to rebuild after a major disaster (let’s hope they have home insurance, because the government’s not going to help if they don’t).
Second, most workers are excluded from the scheme. The bulk of worker are employed by larger firms with over 20 employers. Those firms, if shut by the quake, are suffering exactly the same problems as smaller ones and more families are dependent on the incomes.
Third, limiting the scheme only to workers who would be able to work if the business were open but not those who can’t get to work because of their personal circumstances is an unfair and illogical distinction. Expecting those who can’t get to work to rely on emergency WINZ grants when WINZ itself is severely affected is callous.
Fourth, no word on how the self-employed or contractors are affected. I’m especially worried about the workers who are employed as ‘contractors’, they are always the ones who get screwed.
When South Canterbury Finance collapsed not one of the mostly wealthy people, who had put money into a company knowing it was risky but greedy for the interest rates, lost a cent. The government could easily afford to extend the same generosity to those who have suffered in this earthquake through no fault of their own. To fund it, it could delay the tax cuts for the rich by as little as a year or even just six months.
I saw some video of what the RNZ reporter described as John Key’s ‘roadshow’. They went to one of the emergency centres where the number of homeless families is growing as aftershocks make more and more homes unstable.
As a photo-op, Key pretended to read a book to a little girl. He didn’t tell her parents ‘the government will stand behind your family and make sure you’re not out of pocket – we’ll cover your wages and your uninsured losses’. He didn’t say ‘we’re announcing a program to get you into a home as soon as possible and, until then, we’re calling on people with big houses and spare rooms to accommodate you’. No, he pretended to read a book.
The book was titled ‘The Suspicion of Innocence’. That seemed poignant.