Govt reveals $311m extension to work support programme
Thursday, 11 February 2021
The Government is expanding its Flexi-wage initiative, offering businesses $276 a week when they hire workers struggling to enter the job market.
The scheme is intended to support businesses “getting back on their feet” to take on new workers, and is targeted at Kiwis struggling to re-enter the work force, including those who lost their jobs due to Covid.
The $311 million extension announced on Thursday widens the eligibility criteria, to include job seekers disadvantaged in the labour market but not receiving a benefit. Previously it had been available for job seekers on a benefit and at risk of long-term unemployment.
The amount of subsidy available depended on the type of business and needs of the person being employed. It could be paid at a rate of $276 a week including GST for either 24 weeks or 36 weeks, for a total of $6624 or $9936, respectively.
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Prime Minister Jacinda Ardern said the expansion would result in up to 40,000 New Zealanders being supported into work.
Through the existing scheme, 40,167 Flexi-wage subsidies were approved between 1 July 2014 and 30 June 2020.
Ardern said Flexi-wage was an “important plank” of the Government’s economic recovery plan. “The expansion of it is expected to help thousands more New Zealanders into employment.”
The extension included a ring-fenced $30 million self-employment component, and covered increased support through training and mentoring for those out of work wishing to start their own business. People claiming for self-employment could receive $600 a week over 28 weeks, which would be pro-rated for people pursuing self-employment part
Flexi-wage was also available to help with training or in-work support but the job had to continue after the Fllexi-wage finished.
The payment could sometimes be used to re-deploy a person at risk of redundancy, if they needed different skills.
Minister for Social Development and Employment Carmel Sepuloni said the expansion gave employers confidence to take on and train people, knowing the person would be supported until they were ready to meet the requirements of the job.
“This gives employers an incentive to take on new staff members to help sustain and grow their business,” she said.
Despite a steep fall in unemployment Statistics NZ data showed inequalities still existed and the recovery wasn't even, particularly for female, Maori/Pacific and young workers.
The number of Maori unemployed increased from 8.4 per cent or 33,400 at the end of 2019, to 9 per cent or 36,000 last year.
The Pacific unemployment rate went from 7.2 per cent or 14,500 people, to 9.6 per cent or 17,500 people.
“For employers, flexi-wage provides certainty by providing set rates to businesses looking for staff. The duration of the subsidy will be based on the needs of the person employed and lines up with evidence of effectiveness and international literature on the effect of wage subsidies.
“It is another step in the journey to creating a system which ensures people have an adequate income and standard of living,” Sepuloni said.
Ardern and Sepuloni spoke at a South Auckland mattress factory Sleepwell, which has hired eight workers through the scheme.
Director David Kyle said Sleepwell closed for 10 weeks during the first lockdown in March last year, but was able to keep staff employed due to the wage subsidy.
Kyle said after the lockdown business bounced back, but another lockdown could kill the business.