2. Hon ANNETTE KING (Deputy Leader—Labour) Link to this
to the Minister for Social Development and Employment
Does she agree with the Prime Minister’s statement that “It’s more likely that we would fund training than wage replacement,”; if so, why did the 9-day fortnight package announced yesterday not include a training element and instead included a $60 wage replacement?
Hon PAULA BENNETT (Minister for Social Development and Employment) Link to this
The member is mistaken. The Job Support Scheme does not include a $60 wage replacement; the Government is providing an allowance of up to $62.50 a fortnight.
Has she seen the Prime Minister’s comments that he hopes that firms will top up the difference in wages; if so, is she aware that a firm paying employees $20 an hour that wants to lay off 10 workers would have to spend an additional $10,000 a fortnight to take up her scheme and provide the top-up? If so, why would any employer provide such a top-up?
Hon PAULA BENNETT Link to this
I am aware that there is choice in this scheme. It is about employers and employees coming to an agreement to help save jobs in their workplace, and this Government is supporting that choice.
Jo GoodhewHon PAULA BENNETT Link to this
On the 10th day employees can have an extra day for their own purposes, which is a benefit to many people, according to Alistair Thompson of the Employers and Manufacturers Association. Training will be a feature of the scheme in some workplaces, and we encourage that. The entire scheme is voluntary, and it is for businesses and employees to find an arrangement that works for them. Our focus is on keeping people in jobs.
Will the flow-through from employers to employees be treated as taxable income for employees; if so, could an employee receive as little as $4.57 net an hour for an 8-hour day?
Hon PAULA BENNETT Link to this
The scheme is voluntary, so businesses and employees will come up with what suits them. The Government will pay a top-up allowance of $12.50 for up to 5 hours per fortnight. What happens for the other 5 hours is up to businesses and their employees. The 5-hour subsidy from the Government is taxed.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. The first part of that question was extremely simple: will the payment that flows through from the employer to the employee be taxable in the hands of the employee? That is a very simple question, and all that fluff about choice has no relevance, because tax is not a matter of choice—at least for workers.
Hon PAULA BENNETT Link to this
What happened there was the member was so interested in jumping up to raise his point of order that he did not hear the end of it.
Mr SPEAKERThe member may not use that kind of language in a point of order or make any reflection on another member in a point of order. I think there is a public interest issue here about whether certain payments are taxable. As the member making his point of order pointed out, tax is not a matter that is voluntary. I invite the Minister to respond and to reply to the question, which was whether the payments will be taxable in the hands of the recipient.
Hon Gerry BrownleeThe member will resume his seat. Clearly, those asking the question did not hear that answer, and I have to confess neither did I. I invite the Minister to clarify it.
Is the Minister aware that the Tai Rāwhiti District Health Board is cutting the number of its employees by 3 percent in response to the effects of the global recession? How does she reconcile that with her comments made on Morning Report this morning about the exclusion of the public sector from the Job Support Scheme because the sector was not affected by the global economic situation?
Hon PAULA BENNETT Link to this
What is quite clear is that this scheme is for businesses that are having a drop in productivity. That is where this focus is. That is the area where this scheme has been introduced, and that is what it will introduce.
Hon David Cunliffe Link to this
When the Prime Minister has trumpeted this idea as the most major outcome from the over-hyped Job Summit, why is the Minister being hung out to dry for defending a trivial programme of some $20 million that, at best, will save 2,000 jobs when we are facing 80,000 extra unemployed this year alone?
Hon PAULA BENNETT Link to this
Unlike that side of the House, we do not think that saving jobs is trivial; we take it really seriously. I can say that with the $20 million that is possibly being spent on this scheme, $30 million is being saved in potential unemployment benefit numbers, which is a positive thing, as well.
Hon David Cunliffe Link to this
Does the Minister agree with what John Key told the Wall Street Journal, which is that National’s real formula for prosperity is a return to privatisation, liberalisation, supply-side monetarism, and—God forbid—Rogernomics, or is that not just so 1980s?
Hon PAULA BENNETT Link to this
I think that says more about the member’s own credibility than this Government’s.
Hon David Cunliffe Link to this
I raise a point of order, Mr Speaker. Do you consider that that answer constitutes addressing the question, which covers a number of core elements of economic policy?
Hon Bill EnglishI raise a point of order, Mr Speaker. The deputy leader of the Labour Party used a term that was unparliamentary. I ask that she withdraw the comment.
Hon Trevor MallardBecause I did not hear it, I invite the Hon Annette King to indicate whether she did say something that was unparliamentary.
David GarrettHon PAULA BENNETT Link to this
This package gives those employers who are going through a temporarily tough time because of the global economic situation, a bit of breathing space and a reduction in their wage bill so that they can keep more workers on in their jobs.