Experts criticise govt for haste and lack of input into proposed income insurance scheme

Richard Klipin, CEO of the Financial Services Council, and Katrina Shanks, CEO of Financial Advice New Zealand, say it’s disappointing their members were not consulted during the initial stages of the scheme and were offered no part in drafting the MBIE document that was subsequently offered to the public for consultation and feedback.

Klipin says insurers have been managing life and health insurance for New Zealanders for generations and have the skills, capability, depth and understanding on how a scheme like this could operate.
“Given this specialised knowledge, it is surprising and concerning that the sector was not consulted in the build and development of the proposal and was engaged only once the proposal was released to the wider public for feedback.”

Shanks says it’s a big policy change for New Zealand “and it needs the correct amount of time [for everyone] to be able to understand the implications and how it would be delivered”.
For example, if the government wanted to cushion for six months the economic shock for fulltime workers losing their jobs because of serious illness, disability or redundancy, it might consider what she calls “step changes” to welfare benefits rather than trying to introduce another taxpayer-funded insurance scheme.

Klipin says once the government’s proposal “is right”, another idea might be a public-private arrangement like KiwiSaver where the government sets the framework and then goes to the market to find providers. This approach needs to be investigated, debated and planned, he says.