Economic Recovery

National pitches $10k hiring bonus scheme

Put on the back foot over a lack of vision, National leader Todd Muller has announced the first policy under his rule - aimed at helping employees get back into work

National has unveiled a proposal to provide $10,000 cash payments to businesses who hire additional employees, in what is the party’s first policy announcement under new leader Todd Muller.

Muller says the JobStart scheme, which would run from November until March 2021, would create a financial incentive for up to 50,000 new jobs.

After snatching the leadership from Simon Bridges last week, the new leader has come under pressure to provide details on his vision for the country, with some criticising him for a lack of specifics.

Unveiling the JobStart proposal at a business visit in Auckland, Muller questioned the Government’s optimism about unemployment staying under 10 percent throughout the year, saying private sector and Reserve Bank economists seemed less sure.

“Under the worst-case scenario in the Reserve Bank’s Financial Stability Report released on Wednesday, unemployment would reach 18 percent. Even under the Reserve Bank’s less severe scenario, it would range between 9 and 13.4 percent,” he said. 

“Unemployment of 18 percent would be absolutely, devastatingly catastrophic for this country, and its families and communities. We have never known anything remotely like it in New Zealand, at least since the Great Depression.”

The party’s policy would provide a $10,000 cash payment for each additional employee hired by a business, with a cap of $100,000 (or 10 employees).

The scheme would be capped at $500 million in total, although that could be reviewed in January 2021 if it was proving more popular than expected.

“If you, as small business owners, give just one of your newly unemployed neighbours a job before Christmas, you will be the heroes of the economic crisis."

Businesses would need to prove the new hire was an additional full-time equivalent staff member over and above their existing labour force, with half of the money paid upon hire and the remainder coming after 90 days.

They would also be required to sign a statutory declaration, similar to that for the Government’s wage subsidy scheme, to indicate they were not rorting the system.

Muller said the policy could incentivise up to 50,000 jobs over the five-month period, in line with the policy costing, although a fact sheet provided by the party noted that figure would depend on what stage of the economic cycle New Zealand was in.

He hoped the policy would help small businesses to re-employ staff they had laid off during the pandemic, while others might employ just one more person.

“If you, as small business owners, give just one of your newly unemployed neighbours a job before Christmas, you will be the heroes of the economic crisis, the way that our nurses and doctors and all five million of us who stayed at home and washed our hands were the heroes of the health crisis,” Muller said.

Responding to the announcement, Finance Minister Grant Robertson said the policy was not a new idea, with a number of other countries having undertaken similar initiatives after the GFC and now.

“Our focus for now, as I think most businesses’ is, has been around keeping people employed through things like the wage subsidy scheme.”

Robertson said he had questions about some aspects of the proposal, including whether it would lead to the creation of sustainable jobs rather than shuffling people around, but the Government would look at any ideas it thought would help.

"We welcome constructive ideas that are about getting people into work.”

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