Unemployment drop shows Govt plan to protect jobs and support businesses is working
Today’s unemployment data shows the Government’s plan to protect jobs and cushion the blow for businesses and households against the economic impact of COVID-19 was the right decision, Finance Minister Grant Robertson says.
Stats NZ said today that New Zealand’s unemployment rate in the June quarter – which includes the period the economy was in lockdown – was 4%, down from 4.2% in March. This compares to the Treasury’s Budget forecast for the unemployment rate to hit 8.3% in June.
Grant Robertson said the numbers showed the Government’s decision to move quickly to put the Wage Subsidy in place to protect jobs was the right thing to do.
“Our response has protected both lives and livelihoods. The success of the team of five million with our health response, and investments to cushion the blow for businesses and households with policies like the Wage Subsidy, means that New Zealand now has economic opportunities other countries do not have.”
New Zealand’s 4% unemployment rate compares to 7.4% in Australia, 11.1% in the US and 12.3% in Canada. The OECD average is 8.4%.
“The unemployment numbers show the robustness of the economy. New Zealanders will notice in their communities that the economy is back up and running,” Grant Robertson said.
“These numbers show that going hard and early to beat the virus works. Being able to reopen our economy sooner has saved jobs. It is proof that getting on top of the virus is the best thing we can do for our economy.
“However, we know there are still some tough times to come. The Treasury expects unemployment to rise further and peak in the September quarter as the impacts of the global recession caused by COVID-19 feed through to the domestic economy. Many countries are now experiencing second waves, which will lead to a deeper global recession.
“While the number of people in employment fell by only 0.5% during the quarter and was up 1.2% from a year ago, the increase in the underutilisation rate, and number people indicating they had stopped looking for work due to COVID-19 does show the impact this global pandemic is having. That’s why we put a comprehensive economic plan in place at Budget 2020 focussed on jobs.”
As part of the economic plan announced at Budget 2020, the Government made significant investments to support New Zealanders into jobs, including:
- Free trades training to help get New Zealanders into work
- Providing businesses with up to $16,000 to help cover the costs of an apprentice’s first two years
- Boosts to He Poutama Rangatahi, Mana in Mahi, Trades Academies, Careers advice and the Maori Apprenticeships Fund
- Significant new infrastructure investment, including for 8,000 new state homes and regional infrastructure projects to support the construction industry around the country
- Support for SMEs to receive up to $5,000 for business advice and support to help them shift into e-commerce.
Employment Minister Willie Jackson said the Government has also invested in boosting employment services to support people into work.
“We’re focussed on making sure groups of New Zealanders that are historically hit hardest by recessions are supported to upskill and enter work.
“We’ve increased investment particularly to help our young people get the skills they need to get into work through schemes like Mana-in-Mahi, the Maori Apprenticeships Fund and He Poutama Rangatahi,” Willie Jackson said.
MSD’s employment services have also been supported. During the June quarter, 16,664 benefits were cancelled due to people entering work, with 7,519 of these in the month of June.