Key player in Government's income insurance scheme threatens to pull support if tax cuts not included

A key player in the Government's redundancy safety net is threatening to pull support if there aren't tax cuts for business.

Business New Zealand worked with unions and the Government to design the income insurance scheme, but their support comes with big caveats.

Over the past two years, just keeping your head above water has been hard for hospitality and that's not all down to COVID-19.

"Increasing costs across the board so we're not out of the woods by any stretch of the imagination," said Trinity Group owner Jeremy Smith.

Coming down the pipeline is the Government's mandatory scheme to support workers who lose their jobs - another cost, and a big one

"If we implement this cost that's going to cost us around $65,000 per annum," said Smith.

The income insurance scheme is like ACC for jobs - a levy paid for by workers and employers at 1.39 percent of wages. If you're made redundant or can't keep working, the scheme pays 80 percent of your wage for seven months.

"It enables you to fund and think about future crises so it is an important part of income support,' said BusinessNZ chief executive Kirk Hope.

BusinessNZ was instrumental in setting up the scheme, but it is now threatening to pull support if sick or disabled workers are included as it says there's other government support for them.

It also wants the scheme to be cost neutral so if employers are forking out for it they need a tax cut in return.

"If tax is paid, then it's paid elsewhere, we think is a very important part of the policy," said Hope.

The Workplace Relations Minister - who also wears the Transport Minister helmet - isn't worried about the wobble in support.

"We have genuinely kept an open mind given the feedback that we received in the consultation process so we haven't ruled anything in or out as a part of that," said Michael Wood.

Labour didn't explicitly campaign on the income insurance scheme so the only feedback the Government's had is through the consultation process.

There have been more than 2000 submissions, but Newshub's been told those won't be published until next month, six months after they were submitted.

The hospitality sector raised concerns in their submission that the scheme will be manipulated.

"We'll agree a redundancy and then basically the person can be unemployed for up to six months if they don't rush to find another job," said Smith.

But Wood said: "We will clearly stand behind a scheme that's about giving New Zealanders greater income security in what's an unstable and unpredictable world."

What an unpredictable world it would be for Labour to give tax cuts to businesses