“Labour’s income insurance plan will hurt productivity and make welfare dependency even worse”, says ACT Welfare spokesperson Karen Chhour.

“Our welfare system is due for an overhaul. It imposes a one-size-fits-all solution that works for no-one. It fails people trapped in long-term dependency. It fails workers who pay generously into a scheme that does not support them adequately if they unexpectedly lose their job. It fails to address the realities of a modern economy.

“ACT is open to some form of employment insurance, but Labour’s plan will do more harm than good.

“Labour is proposing an almost 3 per cent tax increase on workers when Kiwis are already struggling with cost of living. Only Labour could believe that adding new taxes will help productivity.

“Labour says employers will pay for some of this scheme, but the new tax will ultimately come out of workers’ overall pay. There’s no free lunch.

“ACT has previously proposed an employment insurance scheme, but it wouldn’t have increased taxes and it would have required workers to actively look for work and report in.

“Labour appears to be encouraging workers to take as long as they like to find work.

“Slowly but surely, Labour is transforming welfare in a way that will increase dependency – by making benefits more generous and removing obligations on welfare recipients.

“ACT welcomes a debate about employment insurance, but Labour’s plan will effectively punish work and subsidise unemployment. New Zealanders shouldn’t tolerate that.”

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