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I can't understand why Grant Robertson thinks proposing another tax on workers right now is a good idea.
That is essentially what the unemployment insurance idea is; a tax.
You can call it a levy or a contribution or whatever other euphemism you want to use but if you’re taking 1.39 percent out of a worker’s pay packet, it’s just going to feel like a tax.
On a pay packet of $100K a year, that’s $1400 you’re losing. Every year.
Sure, a lot of us would love the idea that we are then guaranteed 80% of our income for 6 months if we are made redundant, but hands up if redundancy is your biggest concern right now?
The unemployment rate has today fallen to 3.2%. The job market’s so tight that you know if you lose your job, you’ll probably walk straight into another one.
Now, hands up if the cost of things, like your mortgage, is starting to worry you. And now we’re probably seeing what’s really worrying people.
Incomes are squeezed. Inflation is rising. Banks are putting mortgage rates up.
This weekend the papers carried a story about an early childhood teacher who is struggling so hard to make ends meet that he’s growing his own vegetables and catching his own fish and even then, can barely afford to fix his car.
That is what inflation and the rising cost of living is doing to workers. The last thing they want to hear is that the government wants to take more out of their pay packets.
I think this idea is a mistake.
This feels like a gift to the opposition parties, both of whom have already started hammering the government on inflation and taxes.
ACT has for months been talking about how Labour’s policies are making it harder for so called Kiwi battlers to make ends meet
National has in the last fortnight started hammering the message about the Labour government putting up fuel taxes.
Labour is vulnerable on the cost of living and taxes.
They’ve broken their ‘no new taxes’ promise too many times in the last four and a half years, with the Auckland fuel tax and then the 39% wealth tax at the last election, and they’re only going to get more vulnerable as inflation keeps on lifting the price of everything for the foreseeable future and making it harder to make ends meet.
I don’t know why they’re doing this, whether they really believe in the necessity of unemployment insurance, or whether they want to look busy or whether they’re beholden to the unions.
I have no idea. But politically it feels like a mistake.
I think they’ve just given the opposition parties another stick to clobber them with.