Grant Robertson’s new tax on employment is a broken promise that will punish productivity and reward the unproductive, says the New Zealand Taxpayers’ Union.

The Taxpayers Union is releasing Curia polling commissioned by the Union that asked respondents: Would you be happy to pay $1,000 a year more in income tax in return for a compulsory unemployment insurance scheme which would see someone made redundant receive 80% of their old salary for six months – only 31% supported this proposal, versus 42% opposed.

Union spokesman Louis Houlbrooke says, “The Government’s ‘social insurance’ proposal is really just a pumped-up new benefit scheme that will pay even wealthy people up to $1820 a week for sitting on the couch. It would be one of the most extreme unemployment insurance schemes in the world, replacing 80 percent of income." [1]

“This policy is a classic productivity killer: it taxes work and subsidises non-work. Why bother finding a new job when you can sit at home for six months on nearly full pay, courtesy of the taxpayer?”

“The new tax on employment is yet another nail in the coffin of Grant Robertson’s ‘no new taxes’ promise made in 2020. The two 1.39% levies on the worker and employer will effectively stack together as a 2.78% tax on income – an extra $1580 per year for someone on the median wage.”“The tax is especially unfair on workers who have made the choice to pursue stable careers with reliable employers. They’ll pay the tax but may not ever get the payouts.”

“The Taxpayers’ Union will fight tooth and nail to shut down this dumb tax.”

[1] Unemployment insurance schemes around the world: Evidence and policy options (Page 22)

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