Federated Farmers is dismayed by the Government’s hugely expansive and expensive unemployment insurance scheme, unveiled yesterday.

"It seems strange to say the least to advance this costly scheme, especially at such a time," Feds President Andrew Hoggard says.

"The nation is in the Red setting and on the cusp of an expected Omicron surge that will be a stressful period for many who will be impacted by this scheme. It’s hardly the right time to be consulting on such a contentious piece of legislation."

The Federation strongly believes consultation on key issues should only be occurring when the country is in the Orange setting.

"The pandemic has been massively disruptive and stressful for many employers and the next three months are expected to be very intense. The government should recognise that people’s wellbeing, and good process, are more important than legislative timeframes to clear the books of anything contentious before election year," Andrew says.

Under the proposed scheme, a person who loses their job will be given payments worth 80% of their former income (capped at salaries of $130,911), for up to seven months after they lose their job. The Government thinks it will smooth the transition in and out of unemployment, and help people survive periods of unemployment.

The annual cost of $3.54 billion will be funded from a levy of 1.39 cents on every dollar earned by employees, and matched by businesses. ACC will collect the levies and administer the scheme.

"Acute cost pressures are hammering businesses and high inflation is eroding individuals’ real wages. Another tax to absorb will just add to this pressure," Andrew says.

"Unemployment is rock bottom and is forecast to stay low. People who do lose their jobs are unlikely to be out of work for long but if they can take a seven month break between jobs that might change. There will also be administrative costs, including to make sure the scheme isn't rorted."

"Federated Farmers would prefer to see further central government efforts to attract and upskill those looking for work to fill the wide range of vacancies in the primary and other key sectors."

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