Media release: 27 May 2009

Hyundai calls for creative short-term unemployment measures

Hyundai New Zealand is urging the National Government to ensure tomorrow’s Budget and its future economic planning prioritises reducing the blow for the temporarily unemployed.

Hyundai New Zealand’s Tom Ruddenklau said businesses were increasingly doing their bit to help customers who faced short term redundancy, by minimising the personal impact and, by extension, the broader economic effect of the loss of spending power.

“There has been a lot of pre-Budget talk about our national credit rating, but little about the individual credit-worthiness of New Zealanders affected by the recession,” Mr Ruddenklau said.

“If moving out of recession requires New Zealanders to spend, we need to ensure people can do this with some degree of confidence.

“If the greatest concern for many New Zealanders is loss of employment then there is considerable economic benefit in people knowing there are bridging measures designed for the unique economic conditions we find ourselves in.”

Mr Ruddenklau said the Government’s $50 million package to ease the burden on families affected by redundancy was a step in the right direction, but whether it had the effect of helping maintain confidence in the critical ‘between job’ period was yet to be seen.

“Governments all over the world are grappling with this, and so it is not unique for New Zealand.”

Earlier this month Hyundai introduced Hyundai Assurance, whereby the company covers the cost of finance for three months should a customer lose a job. In a worst case where someone cannot meet payments after the three months, Hyundai takes back the vehicle with no questions asked and with no damage to the person’s credit rating.

In another example, yesterday ING Life announced it would suspend premium payments for up to six months without the customer losing cover if they lost their job.

Mr Ruddenklau said businesses instinctively knew the dangers of being overly pessimistic in this recession, and the fact that cutting back could create self-fulfilling prophecies.

“A key priority for us all should be helping maintain momentum and a sense of ‘business-as-usual’, and that includes assisting people who are between jobs through no fault of their own.”

Mr Ruddenklau said the Government had also made positive steps in easing the terms on provisional tax payments for businesses and was prepared to invest heavily in infrastructure to protect jobs, but there was room for more innovation in considering ‘bridging’ techniques for those temporarily out of the workforce.

He said that people understood the government needed to be prudent, but there was a risk that the hardship might be worse than it need be if measures were not taken to maintain economic momentum.

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