Workplace Update: Budget 2021

Government / 27 May 2021
Workplace Update: Budget 2021

On 20 May 2021, the Government presented its budget.  The budget’s focus was on recovery and wellbeing, however there were some announcements for employers to take note of.

Reinstatement of Training Incentive Allowance

People working in retail, trade and accommodation have been the most impacted by pandemic-related labour market changes, disproportionately affecting young people, Māori, Pacific people, and women.

This budget provided for the reinstatement of the Training Incentive Allowance, to assist with study costs, including fees, books, transport and childcare costs. This funding targets approximately 16,000 sole parents, disabled people and carers receiving eligible benefits to assist them to retrain or obtain new qualifications in Levels 4 to 7 (certificate to bachelor’s degree).

Further support to adopt digital technology

The Small Business Digital Training, Advisory and Support Programme is intended to support a partnership with the private sector to deliver a two-year nationwide programme to supply core digital business skills’ training and business action plans to up to 60,000 New Zealand small businesses.  The goal is to promote greater adoption of digital skills and processes to assist small business to keep working through potential future disruptions and succeed in an increasingly digital environment.

Working panel formed to consider a new social unemployment insurance

Social unemployment insurance schemes are common overseas.  There is currently no statutory requirement to pay redundancy compensation in the event that an employee is made redundant or a business fails.

The Government is considering implementing a social unemployment insurance scheme, which could provide those who lose their jobs with around 80 percent of their income for a certain period of time, with minimum and maximum caps.  The driver for this is to avoid significant income shocks and to enable workers to take the time to find the right job to suit their skillsets, rather accept unsuitable, lower paid work due to financial pressures.  Government, employers and workers would all pay into the scheme.

Funding has been provided for a Social Insurance Tripartite Working Group involving Government, Business New Zealand and the New Zealand Council of Trade Unions to consult with stakeholders on how this would work. The Ministry of Social Development has estimated the potential cost at between $450 million and $5 billion a year, depending on its generosity and the number of people accessing the scheme, although those costings are not considered ‘robust’.

Message for Employers

Understanding upcoming changes to Government policy and how they might impact on your business is important.  We will continue to keep you up-to-date with any changes to workplace law and practice that might follow.

Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.


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