Accountants say a "concerning lack of transparency" has the industry divided on the merits of the government's proposed income insurance scheme.
Photo: 123RF
The scheme, which had been designed by the government, Business New Zealand, the Council of Trade Unions, would pay workers who had lost their job up to 80 percent of their wages for up to seven months.
It would be administered by ACC, and would be funded through levies on wages, with workers and employers chipping in about 1.39 percent each.
Chartered Accountants Australia and New Zealand said about half of its members supported the scheme as it could help people in sectors where redundancies were not offered and give people who had lost their job more time to find another role that matched their skills.
But members also had major concerns about the proposed timeframe, its cost, its effects on low-income families and the potential for the system to be gamed, he said.
"Many of our 31,000 Kiwi members have significant reservations about whether the scheme should go ahead, regardless of whether they support the policy rationale in principle," CA ANZ New Zealand country head Peter Vial said.
Accountants had also been unable to review any of the detailed data and modelling for the scheme, or how it would be funded, Vial said.
"That's a pretty concerning lack of transparency for a scheme that will impose significant costs on all New Zealand employers and employees - and considerable cost to the public purse.
"I assume that detailed modelling has been done, we asked for it back in March once the proposal was released for consultation ... we're very keen to see it because that should have some fairly robust empirical data about the needs this scheme is trying to address."
Ministry of Business, Innovation and Employment acting general manager Jivan Grewel said it planned to release the modelling in the near future.
The model examined local data about redundancies and job losses due to health conditions and disabilities, as well as international schemes, he said.
"In each case, a number of estimates have needed to be made because this scheme would change behaviour (making previous data less applicable). Also, because every international scheme is unique, we have taken care when comparing what other schemes cost, because every country has different labour market conditions, health systems, as well as cultural and legal differences."
More information about the cost of the scheme would be known once it commenced (in late 2023) and the levy would be reviewed two years after it started, Grewel said.
Vial said it would be "ambitious" to try and have the scheme up and running by the end of 2023 and suggested it would take a couple of years to develop the program to work out details, such as how it would work for low-income employees who would be least able to afford the levies.
"If the government does introduce a scheme, it needs to be as fair and efficient as possible, and economically viable, and must be careful that the proposal does not act as a disincentive for people to go back to work."
Vial said there were alternatives that could be considered, such as expanding the scope of the Accident Compensation Act to include insurance cover for health events and disabilities that people away from work, as well as implementing an Australian-styled system which would provide minimum redundancy entitlements.
However, he was not sure if these measures, if taken together, would deliver the same broad outcomes as proposed under the income insurance scheme without seeing the modelling.
Who would be eligible for the proposed scheme?
- Workers would be eligible after having made six months of contributions within the previous 18 months.
- Parental leave is covered
- Fixed-term and seasonal work is covered up until the original end date of employment
- Casual workers who can show reasonable expectation of future income will be treated like permanent workers
- People working multiple jobs are eligible if they lose a job that provides more than 20 percent of their income
- Feedback has been sought on coverage for contractors and self-employed people
- Health and disability related job losses will also be covered, helping address the disparity between support offered for accidents compared to other health conditions or disability
