Hon John Key
Prime Minister
11 March 2009

Media Release        

Government moves fast to help retain jobs

The Government will provide financial assistance to employers to encourage them to retain workers, Prime Minister John Key announced today.

A Job Support Scheme will be aimed at private sector businesses with over 100 full-time employees. Employers, workers and unions will negotiate voluntary agreements to reduce their hours of work to a nine-day fortnight. The government will pay employers $12.50 (the adult minimum wage) an hour per worker, for up to five hours a fortnight.

While workers are in the scheme they cannot be made redundant.

Mr Key says the nine-day fortnight idea received urgent attention after it was identified as a priority at the Job Summit.

“I recognise that some firms are feeling the effects of difficult economic times and I want to move quickly to help save jobs,” Mr Key says.

“This is a practical measure that will give businesses some extra time to ride out the tough conditions, and to retain jobs as they do.

“We need to be realistic, however – there will still be redundancies and this is not a silver bullet. I believe it is important to save as many jobs as we can, while we can.

“By reducing hours, employers will be able to retain their workforce and will be better equipped to respond when economic circumstances improve,” Mr Key says.

Along with the Job Support Scheme for employers with more than 100 workers, Mr Key says the government is also looking at how small businesses might be able to benefit from a similar scheme.

The programme for larger businesses:

Will be available to businesses with more than 100 employees. There are about 1600 companies which fit this category and they employ 580,000 people.

Will be available to businesses from March 27, 2009 through until December 31, 2010 - but only for up to a six month period within these dates.

The government’s contribution will be paid direct to employers to give to the workers it has negotiated a voluntary agreement with to reduce work hours to a nine-day fortnight.

Will be available to up to 10 employees for each averted redundancy.
Will apply to employees who have been full-time for the two months preceding going into the scheme.

Is anticipated to be picked up by between 20,000 and 25,000 workers, making the approximate cost $16 million to $20 million.

“We are continuing to work constructively with unions and business as we decide on the finer details of the scheme,” Mr Key says.

“Cabinet will receive a progress update on Monday.

“This is the first idea put forward at the Job Summit that is coming to fruition. I’m sure it won’t be the last,” Mr Key says.

ENDS

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