The National Party has launched a campaign to stop Labour's proposed Income Insurance Scheme.

The scheme was first put forward in the 2021 Budget, is modelled on similar social insurance schemes in Europe and would provide a new ACC-like safety net for workers who found themselves unemployed.

On Tuesday, September 20, the Government released hundreds of submissions from employers, business groups, unions and individuals, who responded to a discussion on the document issued in February.

Some of the country's largest employers but also the Salvation Army and Child Poverty Action Group came out against the scheme, though for largely different reasons.

Officials estimated last year that the scheme would cost $3.5 billion a year, depending on how many were made unemployed.

The scheme would be funded by a tax on workers and employers, who would both be expected to pay approximately 1.39 per cent of employees' pay - a 2.77 per cent tax in total.

National Finance spokesperson Nicola Willis. Photo: RNZ.

Finance spokesperson for the National Party Nicola Willis says the new "jobs tax" will make Kiwis across the country $834 'worse off every year,” and many people are not aware about the Government plan.

She likens the plan to the now scrapped "Kiwisaver tax" proposal to standardise the application of GST to fees and services of managed fund providers.

'Despite major financial challenges facing New Zealanders, Finance Minister Grant Robertson expects you to give away more of your already-stretched pay packets to pay for his pet project,” says Willis.

'Many people will be surprised to learn of Labour's quiet plan to impose a new 1.39 per cent Jobs Tax on every working Kiwi and every employer.

'National will be campaigning to make sure New Zealanders know about it before it's too late to stop it.

'The new Jobs Tax would make a typical worker (earning $60,000) $834 worse off every year. That's $834 less for groceries, bills, and people's own savings. It's a cost Kiwis can't afford.

'This latest tax grab by Labour is being proposed to pay for an ‘income insurance' scheme. This gold-plated welfare scheme would allow people made redundant from their jobs to stay out of work for up to six months on 80 per cent pay. It would come with a multi-billion price tag.

'Employers will also be hit with a new 1.39 per cent tax, meaning they'll have less cash available for pay rises and may be forced to hike prices to pay for it.”

Finance Minister Grant Robertson. Photo: RNZ.

Finance Minister Grant Robertson says Willis' statement is 'misleading,” and the Governments 'financial decisions on the scheme's design have yet been made”.

'While everyone's situation will be different under the income insurance scheme, reflecting their circumstances. As an example, for a person earning $1160 a week, they would pay $16.12 a week in levies,” says Finance Minister Grant Roberson.

'If they lost their job and were eligible for support, they would then receive $928 per week in insurance payments.

'This scheme is needed and came about as a result of the urging of Business New Zealand and the Council of Trade Unions. New Zealand is among only a few countries in the OECD without an income insurance scheme, which will fill a gap in our social security system.

'Currently, when redundancy or health conditions and disability results in someone losing their job, New Zealanders get far less support than those in practically any other advanced country.

'Some 100,000 New Zealanders lose their job every year and during a major economic shock like the Global Financial Crisis, 200,000 found themselves out of work. The Government has worked alongside Business New Zealand and the CTU to develop a scheme to provide an enduring solution to protect workers and the economy after job losses.

'It is also important to note that final decisions on the scheme's design have yet been made. In any event it is not due to come into place until 2024 at the earliest.”

Willis adds the plan by the Government is 'yet another case of skewed priorities from a Government that is increasingly out of touch with New Zealand families”.

'National is determined to speak up for hardworking New Zealanders who are already being hit by rising prices and higher interest rates and who can't afford to pay yet another new tax.”

'We are campaigning to stop this tax and have pledged that if Labour do introduce it, National will repeal it.

'People power stopped Labour's KiwiSaver Tax, now it's time to stop the Jobs Tax too.”

- Additional reporting by Tom Pullar-Strecker/Stuff.co.nz.