Goff mocks PM over employment promise

John Key's Government is battling criticism from the Labour party over its job protection plans. Photo / Martin Sykes

The Government was scrambling to defend itself against criticism that its efforts to protect jobs were not making a dent, as an extra 1000 workers a week sign up for the dole.

Labour leader Phil Goff mocked the Government's Job Summit yesterday as a "gimmick", saying Prime Minister John Key had promised to save "thousands of jobs", but the nine-day-fortnight scheme had saved just a few hundred jobs in three months, compared to 1000 people signing up for the unemployment benefit each week.

Mr Goff said the cycleway was now "a pathetic remnant of the original idea and has created no jobs so far".

Mr Key listed wider steps the Government was taking and said the success of the nine-day fortnight was not the number of people on it, "it is the fact that it is there to support businesses if they need it".

However, the criticism clearly stung - new figures on the nine-day fortnight were hurriedly issued.

Yesterday morning, Minister of Social Development Paula Bennett's office said it covered 1345 workers and had "saved" 345 jobs.

Late yesterday afternoon, more attractive numbers were released - showing 2241 workers would be on the scheme, warding off 377 job losses.

Mr Key had revealed on Monday that 1000 people were going on the unemployment benefit every week, and actual unemployment was expected to be much higher.

The New Zealand Institute of Economic Research also yesterday forecast that 60,000 Kiwis would lose their jobs over the next 12 months.

Mr Key and Finance Minister Bill English both defended the Government's record, saying jobs would be created by initiatives through the home insulation fund, upgrades of state houses and school building projects, and multibillion-dollar investments in road and the national grid.

Both also pointed to the higher unemployment rate in the United States, saying it was 9.4 per cent compared to 5 per cent in New Zealand.

Mr Key gave a list of wider measures which would protect jobs, including freeing up the flow of credit to businesses and protecting New Zealand from a credit downgrade, which would help prevent job layoffs.

Mr English said New Zealand's unemployment increase was one of the lowest in the developed world.

"We don't underestimate [unemployment]. It has a big impact on [families] and on their communities. We will do everything we can, including a few more lateral projects, to help with jobs."

He said the nine-day fortnight and cycleway investment were examples and stuck by the decision to do a "rolling maul" of smaller initiatives. The Institute of Economic Research had estimated its stimulus package would "support" about 10,0000 jobs.

The Government had initially estimated between 20,000 and 25,000 workers would have used the nine-day working fortnight scheme by December 2010. If the current rate of use continued, about 15,700 workers would have used it by that time.

Ms Bennett said the Government had expected businesses to delay calling on the scheme "until times were at their toughest".