'Not a broken promise': Grant Robertson says new unemployment insurance will be paid via levy, not a tax

Finance Minister Grant Robertson says despite plans to introduce a levy-funded unemployment insurance scheme, he hasn't broken Labour's election promise of no new taxes - yet. 

Under the proposal, announced at Thursday's Budget, if someone is made unemployed they could get 80 percent of their previous wages, rather than the much smaller Jobseeker Benefit. 

No funding has been allocated for the ACC-style scheme yet. ACC is funded through levies separate to taxes, and this scheme would be funded the same way, Robertson told Newshub Nation on Saturday.

"The working proposal is an ACC-style scheme, and, yes, that would be a levy-based scheme. How much that is, exactly where that falls in terms of employers or employees - that's what we've got to work out."

Ahead of the 2020 election, aside from a new top tax rate, Labour promised it wouldn't introduce any new taxes. It's since made tweaks to the housing bright line test and changed tax rules for landlords which increase tax liabilities, but aren't technically new taxes.

"BusinessNZ, the organisation that represents business owners, and the CTU came to us together and said, 'Let's design something," said Robertson.

"Round the world, Germany's got it; Canada's got it; the Nordic countries have got it. So we're at the beginning of that process. We'll be consulting with New Zealanders, and we did commit to this in our manifesto as well."

The unemployment insurance scheme also wouldn't be a tax, but a levy, Robertson said.

"I don't see it as [a tax]. I see it as actually a levy and an insurance-based scheme."

Newshub Nation host Tova O'Brien pushed Robertson on the difference between a tax and a levy.

"Let's wait till 2023. We're some way off," Robertson replied. "It is not a broken promise, but we're a long way away from that."

There will be a general election in 2023, which could give Labour the chance to campaign on the extra costs for taxpayers and get a mandate from the voting public. But it could come sooner. 

"BusinessNZ and the Council of Trade Unions are pushing us to go quicker," said Robertson.

Grant Robertson on Newshub Nation.
Grant Robertson on Newshub Nation. Photo credit: Newshub Nation

As for how much people would get, Robertson said there would be an income cap - so he, for example, couldn't claim $267,787, 80 percent of his salary. 

"There will be maximum and minimum caps, and they would be significantly south of that."

But they could cover smaller six-figure salaries, he admitted. 

"What we do recognise is, you know, at the other end - at the minimum-wage end - you also have to make sure somebody's got enough to live on there too."

The idea has the backing of ACT's David Seymour. Their policy is a little different, and would be funded by 1 percent levy matched by a 1 percent tax cut.

"For up to 13 weeks you get 50 percent of your income, up to $60,000, so it's capped," he told Newshub Nation.

"We have designed this policy, what I will say it's very, very hard to do. Once you make it affordable, it's not as generous as people hope. We're interested in having the discussion about that... I wish them luck."

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