Accountants air reservations on income insurance scheme

However, the members also had concerns regarding the scheme, such as the implementation timeframe, cost, and its effects on low-income families. They also raised the possibility that the system could be gamed.

“Many of our 31,000 Kiwi members have significant reservations about whether the scheme should go ahead, regardless of whether they support the policy rationale in principle,” CA ANZ New Zealand country head Peter Vial told RNZ.

The organisation’s members were also unable to review the scheme’s deeper modelling specifics, as well as its funding mechanisms, Vial said.

“That’s a pretty concerning lack of transparency for a scheme that will impose significant costs on all New Zealand employers and employees – and considerable cost to the public purse,” Vial said. “I assume that detailed modelling has been done, we asked for it back in March once the proposal was released for consultation … we’re very keen to see it because that should have some fairly robust empirical data about the needs this scheme is trying to address.”

Jivan Grewel, acting general manager of the Ministry of Business, Innovation and Employment, said the ministry is planning to release the modelling soon.

“In each case, a number of estimates have needed to be made because this scheme would change behaviour (making previous data less applicable),” Grewel said. “Also, because every international scheme is unique, we have taken care when comparing what other schemes cost, because every country has different labour market conditions, health systems, as well as cultural and legal differences.”

Vial said that there are several alternatives to the proposed scheme, such as expanding the scope of the Accident Compensation Act to include insurance cover for health events and disabilities that leave employees unable to work, as well adopting a system similar to Australia’s, which provides minimum redundancy entitlements.