National calls for return of 90-day trials, despite Treasury report saying they don't work

The National Party is calling on the Government to "urgently restore" 90-day trial periods for new employees, saying it'll help people who've lost their jobs during the pandemic get back to work.

"Since the outbreak of COVID-19, there have been reports of at least 14,000 cumulative job cuts from large companies with more to follow, and ANZ business confidence figures show 42 per cent of firms intend to cut staff," said workplace relations and safety spokesperson Dan Bidois.

"The Government watered down the 90-day trial periods so that only businesses who employ less than 20 people can implement them. Fully reinstating the trial periods to cover firms with more than 20 employees will give businesses greater confidence to take on more staff."

In 2018 the Labour-led Government watered down the trials, introduced under National, which allowed employers to drop new employees if they didn't perform well in the first three months. Only firms with 19 or fewer employees can now use them. 

A report by Treasury in 2016 found they had a "statistically and economically insignificant" effect on hiring rates, didn't increase employment opportunities for beneficiaries or youth, didn't increase short-term hiring and didn't increase the likelihood employees would stick with the same employer for a lengthy period of time. 

There was "statistically weak evidence" trials might boost employment in construction and trades by about 10 percent.

"The primary effects of the policy were to reduce the cost to firms of continuing their pre-policy behaviour, while requiring many employees to shoulder the cost of increased initial uncertainty about their job security."

National MP Michael Woodhouse - who was Workplace Relations Minister at the time - disputed Treasury's findings, saying he had anecdotal evidence it was working

Labour planned to get rid of trial periods altogether, but kept them for smaller periods as part of their coalition arrangement with New Zealand First. 

Dan Bidois.
Dan Bidois. Photo credit: Dan Bidois/Facebook

Bidois said reinstating the trials would give businesses "the confidence to invest and grow".

It comes after new National leader Todd Muller and finance spokesperson Paul Goldsmith unveiled a plan to pay businesses $10,000 if they hired new people - $5000 on hiring and the rest after 90 days. Muller said it would create 50,000 jobs, but his third-ranked MP Amy Adams told Newshub Nation on Saturday it wouldn't "magic up jobs that weren't there', but instead "make a critical difference for a business who's just thinking, 'Gosh - can I afford to take that risk?'".

The number of Kiwis in employment fell 37,500 in April under lockdown, Statistics NZ said.

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