20 Jul 2009

Consider making dole a loan, business group urges

10:11 pm on 20 July 2009

The unemployment benefit should be a loan rather than a grant in a bid to tackle New Zealand's benefit culture, the Business Roundtable has suggested.

The business group commissioned the report which also calls for the delivery of benefits and welfare services for Maori to be regionalised, or tribalised.

The report's author, welfare researcher Lindsay Mitchell, says people should be able to opt out of the welfare system by taking out private health insurance, and then take out a loan if they lose their job and have not covered themselves adequately.

But critics say making people repay unemployment benefits could lead to unmanageable debts for those out of work.

The Beneficiaries and Unwaged Workers Trust says that would create extra stress and debt for people already struggling.

Auckland University's senior economics lecturer Susan St John says considering the loan during a recession is ill-timed, as the unemployment benefit provides a minimal safety net.