Why are you concerned about NZII?
The scheme excludes our most vulnerable people, and puts financial pressure on other vulnerable people. See our concerns here.
Why are some unions keen on NZII?
They agree with us that the current welfare system is broken: support levels are too low, sanctions are cruel, and eligibility rules prevent people from forming supportive life partnerships. Unions worry about the drop in income suffered by paid workers who lose their jobs. We do too: it’s a drop specifically caused by New Zealand’s inadequate welfare system. While unions have expressed support for the welfare system to be fully resourced, some of them are also calling for NZII to be fast-tracked over better welfare. NZII will be good for some union members but not all, and it won’t be good for those for whom work is impossible or inappropriate in the long-term. Flat levies will be unaffordable for low-wage workers. NZII may protect some people in paid employment from the inhumane welfare system if they lose their job, but others will be excluded from the higher support of NZII. This includes people bullied out of their jobs, those whose disability lasts for longer than six months, those with caring responsibilities, and others.
We agree wholeheartedly with unions that job loss is a huge concern: it can take away security, it can hit people’s confidence as well as their financial security. That’s why we want the Government to reform welfare so that all people who lose their jobs can access a liveable income, good support and training (if they decide it makes sense for them), whether or not they have a partner. We support compulsory employer-funded redundancy pay-outs.
People who access the current welfare system are workers – they are carers, volunteers, community workers and people looking for paid work. We need to make the current welfare system liveable for all those not in paid work instead of building a new system which reinforces inequities.
Some unions also believe NZII will move wealth from capital to workers as there’s an employer levy as well as an employee levy. However, the MBIE discussion document suggests it is likely the employer levy will be passed on to employees, in the form of suppressed wages: “Over time, it is also likely that employer levies will be reflected in wages” (p.41)
Can’t we have both NZII and better welfare?
The Welfare Expert Advisory Group’s recommendations were received by the Government over 3 years ago – and most have still not been implemented, a stark contrast to NZII which is being fast-tracked despite its complexity, size and unknown conseqences. The current proposal is for NZII and not for NZII and better welfare. Unions who support NZII say they support good welfare as well – but NZII makes adequate welfare reform far less likely. This is divide and conquer. Conditions for benefit recipients will get worse as those with income security are shielded from the broken welfare system, reducing political pressure to improve welfare as a whole, and by taking resources that could be used to reform welfare. NZII will mean less solidarity.
Besides, even with good welfare, NZII may not be appropriate. Let’s solve our crises of housing and poverty before we offer high-earning workers high long-term payouts.
What about helping people get out of ‘sunset’ industries due to climate change?
NZII is not fit-for-purpose to do this. We need to collectively ensure that our responses to climate change include and support everyone. Whole workforces (such as the fossil fuel industry) and communities need good, well-resourced support and proactive bespoke industry-wide packages to meet these challenges, rather than insurance for individual workers that only kicks in on a business-directed timetable. Retraining and university study (reinstating postgraduate allowances, as Labour promised but never delivered) as well as assisting with relocation and new housing are just some of the responses required. Not inefficient and inadequate NZII.
Liveable incomes for everyone, alongside locally-based universal public services, are effective ways of responding to climate change.
What about helping low-paid workers and precariat workers?
Adequate welfare would assist low-paid workers in the gig economy, as well as contract and part-time workers, more than NZII. Some will be ineligible for NZII, and others will find the levies unaffordable, and any NZII payouts inadequate.
NZII’s 80% compensation rate is similar to ACC’s. But an ACC report found that “lower income households might not be able to afford to live on ACC’s 80 percent weekly wage compensation rate.” People should have access to adequate support without paying unaffordable and unfair levies.
What about helping people who become terminally ill?
NZII is not fit-for-purpose to do this for everyone. We need a generous system that ensures every family has their needs met, so nobody is forced to work when it is injurious to their health or hastens their passing. Instead NZII would be based on prior income of the individual, not the needs of themselves and their whānau. Being ill can be expensive. Low-wage workers with life-limiting illness—particularly those with children—may find themselves needing to continue to work even if they are eligible for NZII because they can’t afford to live on 80% of their low wage while critically ill.
What about helping disabled people who cannot be in paid employment?
NZII is not fit-for-purpose to do this for everyone. We need a generous system that supports people who are affected by chronic disability (longer than six months), and a system that supports those for whom work has always been impossible or inappropriate. NZII makes this less likely, and discriminates against people with disability.