A key government policy to introduce an income insurance scheme funded by employers and their staff, and given a luke-warm response by the insurance industry, is off the table.
Prime Minister Chris Hipkins announced a suite of government programmes that are being cancelled or delayed so it can focus on the cost of living crisis.
“The social insurance scheme is off the table and will not proceed as proposed,” says Hipkins. “We will need to see a significant improvement in economic conditions before anything is advanced.
“Work will continue to explore ways to best address these inequities in the long term when the economy is better placed to make change. But it is off the table for now.”
Katrina Shanks, CEO Financial Advice NZ says the organisation is heartened to see that the Government has pushed pause on the NZ income insurance scheme.
“We were disappointed in the process which had limited consultation with stakeholders and little or no public debate,” she says.
“An initiative of this scale which has financial, economic and social impacts is far reaching and we would have expected a more expansive consultation approach to be implemented to obtain wider discussion and solutions to the problem identified.
“We also believe initiatives that change the financial, economic and social outcomes of all New Zealanders need to be publicly debated and put to a country wide referendum.
“We believe sickness and disability insurance and redundancy insurance are two completely different forms of insurance and cannot be interrelated. They need to be separated to effectively find solutions to the problem identified.”
We were disappointed in the process which had limited consultation with stakeholders…
Richard Klipin, the FSC’s CEO, says Hipkin’s decision is “…really good news for all Kiwis”
“We welcome the deferral of the New Zealand Income Insurance Scheme which will not proceed as proposed while we are faced with serious economic challenges,” he says.
“Deferring the implementation will allow more time to get the details right and protect workers and employers from additional costs.”
The scheme was first announced in February 2022 by the Minister of Finance Grant Robertson who said it “…was an enduring solution that would protect people and the economy after job losses”.
See our report: Government Launches Consultation on State-Backed Income Insurance Scheme
Do you agree the Government’s Income Protection Scheme should be scrapped?
- Yes (87%)
- No (10%)
- Not sure (3%)
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