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Government’s policies will make it harder for unemployed workers

NZCTU President Richard Wagstaff is concerned that the Government’s welfare and employment policies will make it harder for people who lose their jobs, following the release of new employment data.

The data shows that unemployment rose for the December 2023 quarter, to 4%, and the Treasury and Reserve Bank both expect it will rise to 5% by the end of this year. In real terms, that means a further 60,000 people will be unemployed, compared to 2022.

“Unemployment is always stressful, but the Government’s recent policy decisions will make things even more difficult for displaced workers,” said Wagstaff.

“The Government has ended work on the income insurance scheme, which would have provided displaced workers with up to seven months of financial support after losing their job, at 80% of their salary or wages. This would have helped to reduce the high rate of wage scarring – the pay cut that workers often experience as a result of losing their job – that New Zealand has compared to our OECD peers, and supported workers to upskill and retrain.

“The Government has announced its intention to introduce new sanctions for welfare recipients. But the evidence is clear that this punitive approach to welfare doesn’t work, and only serves to compound social harm and increase poverty.

“The Government has also extended 90-day trials to businesses of all sizes, meaning that many job seekers who do find work will feel insecure in their employment for the first three months. As with their other policy decisions, there is no evidence that 90-day trials increase employment.

“Instead of helping people through the cost-of-living crisis, the Government’s policies are further reducing employment security, and increasing poverty,” said Wagstaff.