National has launched a petition to stop the jobs tax:
Labour wants to take more of your hard-earned cash, with a plan to impose a new 1.39% Jobs Tax on every worker and every employer.
The Jobs Tax would make a typical worker (earning $60,000) $834 worse off every year. That’s $834 less for your groceries, your power and other bills, and your own savings. Employers would also be forced to pay the tax for every employee on their pay roll. Yet another cost on business that will put pressure on prices and make it harder to get a pay rise.
The Jobs Tax has been dreamt up by the Government to pay for Finance Minister Grant Robertson’s latest pet project: an “income insurance scheme”. This gold-plated welfare scheme would allow those made redundant to stay off work for up to 6 months on 80% pay. This despite businesses crying out for skilled workers!
The Jobs Tax joins the long line of other taxes Labour has introduced to fleece New Zealanders of their hard-earned cash, all while delivering worse outcomes for you and your family.
Help us stop Labour’s obsession with spending your money. Sign our petition to stop Labour’s Jobs Tax today.
Want to know how much Labour’s Jobs Tax will cost you? See how much worse off you’ll be HERE.
That link takes you to a table that shows someone earning $35,000 would pay $487 a year, the employer would also pay that making a total of $974 taken from the worker and the business in extra tax.
Someone earning $60,000 would have $834 taken from them, so would the employer making a total of $1,668 taken from the worker and the business by the government.
Workers earning $135,000 and their employers would pay $1,820 each, a total of $3,640 taken from those who earned it by the government that promised no new taxes.
That’s a lot of tax that would be taken from workers and employers and who do you think would make better use of the money – the employees and the businesses or the government?
Taking that much tax to redistribute to people who may or may not need it is bad enough. It gets worse when you read Eric Crampton explaining how the scheme would be open to rorts:
A dark part of me hopes the government’s employment insurance scheme is enacted exactly as proposed.
It will be terrible.
But the rorts it will spawn will be the stuff of which economics columnists’ dreams are made.
The scheme really is not insurance. Insurance charges premiums that vary with risk. The government’s employment insurance scheme simply charges a proportion of a worker’s salary.
It’s not an insurance scheme it’s a tax and it’s not needed by many, perhaps most workers.
Has anyone bothered to investigate how many people are really at risk of losing their jobs and how many of those who, in the current environment, would walk straight into another job?
Consider seasonal employment which is only covered if a worker is made redundant before the end of the contracted picking season.
But employers making workers redundant every year will not pay a higher insurance premium.
Clever employers will put seasonal workers on to permanent contracts before making them redundant towards the end of the picking season. Workers in on the bargain will work through the initial four weeks of redundancy covered by the employer if they want to play the game again next season.
And a lengthy period on 80 per cent of their prior salary awaits.
You might even consider it a subsidy scheme for seasonal work. Attracting workers out to the regions is easier if those workers can enjoy six months of government-provided redundancy pay as part of the bargain. . .
Or consider maternity benefits.
Parental leave provides payments of up to $621.76 per week. But if a parent-to-be were to be made redundant, just consider the benefits for those on higher incomes!
Rather than see their pay drop to a meagre $621.76 per week, they could receive up to about $2000 per week – if they earned $130,000 or more before taking parental redundancy.
It really is brilliant. Labour has come up with a mechanism ensuring higher-earning women face fewer costs when having children, while doing fairly little for women on lower wages.
If a right-wing government had come up with the scheme, it would be accused of doing it deliberately, and possibly with eugenic intentions.
What employer would be so mean as to decline their employee’s request to be made redundant before the birth of their child?
And while parental leave is only available to one parent at a time, both parents in a two-income family could take redundancy. They could enjoy a full year with one parent at home with the new baby, or six months of family togetherness. On an “insurance” payment. . .
Labour has done a lot to make better-off people better-off while the poor have got poorer.
The jobs tax would do more of that and it would foster make-work schemes for employment lawyers:
Under current employment law, it is impossibly difficult to fire underperforming workers in some circumstances. It is too easy for employers to find themselves tied up in personal grievance claims for months – to the benefit of the lawyers.
But if both sides in a fractured employment relationship can agree that the worker will be made redundant, with an “insurance” scheme picking up months and months of redundancy payments at 80 per cent of the worker’s salary, everything becomes easier.
The employer neither needs to come up with a very expensive golden handshake, nor deal with months of workplace toxicity as a personal grievance case works its way through.
The worker can simply be made redundant.
You might even view it as a tidy second-best workaround to dysfunctional employment legislation. It will be far easier for employers to fire problem workers, with their agreement, when the scheme is in place. . .
If there’s ever a good time to add a new tax, it’s not when all but the wealthy are struggling with the impacts of steeply rising prices.
If there’s ever a good time to make it easier for people to not work, it’s not when there’s a nation-wide shortage of workers.
This is a bad tax made worse by the potential for rorts and really bad timing.