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The work will inject $ 311 million into a job support program designed to help 40,000 New Zealanders who have been unemployed due to Covid-19 to return to work.
Speaking at a business event in Auckland on Thursday, Prime Minister Jacinda Ardern outlined some of the government’s priorities and work plan for the coming months.
One of them was to launch before the end of the year a “flexible salary plan,” a political promise that the Labor Party made in the run-up to last month’s elections.
The plan would help employers hire people who are at risk of long-term unemployment and who receive a benefit, he said. It would provide a specific and flexible subsidy, according to the type of business or the needs of the person employed.
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“We know these kinds of programs make a difference,” Ardern said.
Maori, Pacfika and women have been disproportionately affected by job losses to date, he said.
“My hope is that the expanded flexible salary plan will play an important role in helping people in these groups get back to work quickly.”
MORNING REPORT / RNZ
Prime Minister Jacinda Ardern walks on a centrist balance beam this morning, meeting with shop stewards from Etū before giving a speech to Business New Zealand.
In addition to the $ 311 million he would put into the plan, he also proposed to protect $ 30 million to help unemployed New Zealanders start a business through a “flexible wage self-employment program.”
The government would also extend the duration of its small business loan plan and make improvements to it before Christmas.
“The scheme was originally intended as an interim solution,” Ardern said.
It provided access to financing for vulnerable but viable companies that needed support to cover costs in the wake of the lockdowns and the impact of Covid-19.
“We have to acknowledge, however, that the uncertainty that Covid has created will be with us for some time.”
A proposal to extend the scheme for three years and extend the interest-free period from one year to two years would be presented to the Cabinet on Monday.
“Making these changes before Christmas brings certainty to small businesses, especially when the holiday period may be a quieter time for some businesses that may need to access the scheme,” Ardern said.
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Ardern said the Cabinet would also aim to approve more infrastructure projects to speed up the RMA process over the next several weeks in order to speed up job creation.
“Infrastructure is critical to our recovery plan. These projects are rich in jobs and will help rebuild New Zealand better after the recession. “
Ardern said that when the border configuration changed, he wanted to lead a business delegation to key trading partners, including the United States, China and the United Kingdom and the European Union, with whom New Zealand was in free trade talks.
“When we are in a position to change the configuration of our borders, a trade mission will be at the top of my list.”
An export-led recovery was important, as was sharing New Zealand’s story with the world on how it had successfully handled Covid-19 to date, he said.
This would help attract international investment to New Zealand, he said.
Appearances like Thursday’s give Ardern the opportunity to side with business and help build confidence in the government’s ability to rebuild the economy after the economic shock of Covid-19.
Business confidence is an important economic indicator for any government, particularly Labor-led governments, which are historically perceived as less business-friendly than the National.
Yet despite the Covid-19 woes and the fact that New Zealand is now in recession, business confidence is doing surprisingly well.
ANZ’s most recent business confidence survey found in October that business owners were more likely to be optimistic than dejected about how their company’s fortunes would turn.
Overall business confidence rose 14 points and only a negative net 15% of respondents expected worse economic conditions in the coming year.
A net 4 percent of companies were more optimistic about their own outlook for the next year, up 9 points from a negative 5 percent net last month.
ANZ chief economist Sharon Zollner said that did not count as “strong,” but it was a notable change from the negative 55 percent net figure recorded in April.
Employment data released on Wednesday showed that New Zealand’s unemployment rate reached 5.3 percent, and the number of people out of work increased by 37,000 in the September quarter to reach 151,000.
It is the largest quarterly increase in unemployment since 1986.
However, the unemployment rate was well below the Treasury’s forecast of 9.8 percent in the 2020 budget, and below the 6.4 percent forecast in the Pre-Election Update.
It is also well below unemployment rates in Australia (6.9 percent), the United States (8.8 percent) and Canada 10 (percent). The OECD average is 7.4%.
“While the unemployment figures released yesterday were lower than many had predicted, the disproportionate impact of job losses on Maori, Pacific and women is undeniable,” Ardern said Thursday.
Last month, with an overwhelming victory in the 2020 general election, Labor won enough votes to rule alone, the first time a single party has been able to do so since the MMP was introduced in 1996.
If the re-elected Labor Party promised to create thousands of jobs in infrastructure projects, as well as 11,000 new jobs to protect the environment and clean up waterways. Job creation through the construction of thousands of state houses was also promising.
Under the new Labor government, minimum sick leave entitlements will increase from five days to 10 days a year and the minimum wage will increase from $ 18.90 to $ 20 an hour in 2021, both costs that companies will have to use.
Ardern said the Cabinet would consider draft legislation on sick pay before Christmas, with a plan to introduce it into the house before the end of the year.
It would then go to a select committee process so that it could reach consensus on the issue, he said.
The cost of the new Matariki holiday planned by Labor will also fall on businesses when it is introduced in 2022.
