“Labour is continuing to incentivise welfare and punish hard work, with advice provided to the Government on their income insurance scheme warning of increased unemployment and disincentives to work,” says ACT Leader David Seymour.

“Advice from Treasury said that implementing the policy during the early stages of our economic recovery would have a “substantial contractionary effect on the economy”. In other words, it would inflict even more costs on businesses that have been through the ringer and are trying to rebuild.

“The same advice also said the scheme would create incentives for unemployment and add higher compliance costs to businesses.

“This comes at a time when Labour is increasing benefits and unsurprisingly Jobseeker numbers are through the roof.

“We should be focussed on boosting productivity, becoming more competitive and creating a healthy economy. Instead, the Government is piling costs onto businesses who are already struggling to stay afloat.

“What is even more disturbing is that the scheme is funded by a 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.

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