The visible hand in economics

Redundancy package

Posted on: October 31, 2008

So Labour is making it that people who lose their jobs during the economic downturn can get the benefit straight away – and over the first 13 weeks no-one will take account of their spouses income (ht the Standard).

Tell you the truth, this sounds a lot better than the scheme National are indicating they will put in place I suspect National is going to put in place – it is less distortionary and actually targets those who are in trouble. Of course, the reason it sounds better is because they are doing less – I still don’t think it is particularly constructive policy.

My only question is, why have no stand-down period during a recession and a stand-down period outside of a recession? Personally I think the two should be consistent. I buy CPW’s argument that a greater proportion of the unemployed are “unfortunate” during a recession and so we want to be lighter on them at such a time – however, again I am torn by the fact that I’m not sure whether society wants the UB as a security net, or as a guaranteed minimum income for people. The way we treat it will differ in each case – and until we are CLEAR about what we have it for, we will continue with inconsistent policy.

Personally, I would make all benefits means tested (taking into account the liquidity of a persons assets) but have them turn up as soon as you are fired (I’m not sure about when you leave a job – I’ll have to think about that one).  Update:  Why has no-one tried to argue this – it is supposed to be contensious.  I blame Friday😛

Lets see what Nationals actual plan today is – then we can “compare”.

6 Responses to "Redundancy package"

You’d probably be best to wait until National release their policy before claiming Labour’s is superior.

Oh I see your final sentence now. Perhaps the wording of your second paragraph is a bit strong (or perhaps I should read the full piece before commenting on it).

“Perhaps the wording of your second paragraph is a bit strong”

Agreed – fixed😛

Post is done goonix😉

[…] National’s redundancy package 31 10 2008 So National’s redundancy package is out. It is different to my initial impression and slightly different to the Labour package. […]

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