Skip to main content

Questions for Oral Answer: Employment Scheme, McDonalds—Government Subsidy

SUE BRADFORD (Green) to the Minister for Social Development and Employment: By how much, if anything, is the Government subsiding McDonalds through assistance with recruitment and training of staff as part of Work and Income's 5-year deal with the company?

Hon PAULA BENNETT (Minister for Social Development and Employment) : I can tell the member that, as with other industry and employer partnerships, the amount of funding depends entirely on which Work and Income job seekers the company employs. The funding follows the individual. For example, a long-term beneficiary may attract a job subsidy of up to $16,800 over a 12-month period; that is, up to $380 per week. Another person hired directly by accessing Work and Income's database may not be on a benefit and may attract no funding at all. To give the member an example, in Dannevirke we referred 54 people to McDonald's. Of those 54 people, 27 were hired and started work last weekend. Twelve of those 27 people who were hired had been on a benefit, and eight of those 12 beneficiaries attracted a skills investment wage subsidy, for a total cost of $36,000 over 6 months.

Sue Bradford: Why does the Minister think it should be a priority use of Ministry of Social Development funds to subsidise a fast-food multinational whose net profit after tax in New Zealand in 2008 was over $23 million?

Hon PAULA BENNETT: As I previously stated, the funding follows the individual, so that the individual can get a job with any employer. It is a job subsidy for long-term beneficiaries, and it has been around for years. The job subsidy that goes with the individual is not new. The partnership and the way that we access those employees are different, but the job funding is not different or exceptional.

Sue Bradford: Why on earth does the Government believe it is important or appropriate to put this kind of money into picking up the costs of McDonald's training, recruitment, and employment, when a company like that can well afford to pay its own wages, given that its employees are mostly on the minimum wage anyway?

Hon PAULA BENNETT: Let us be quite clear that in order for individuals to get that level of funding, they would have to meet certain criteria. They have to be long-term unemployed, and they have to need the assistance of Work and Income in getting a job. The funding follows the individual no matter who the employer is; that is what is happening with this scheme. There is nothing exceptional about it, there is nothing unusual, and there are no hidden agendas.

Katrina Shanks: Are there other industry and employer partnerships that have the potential to absorb increasing numbers of—

Mr SPEAKER: I apologise to the member. I ask members to bear with me; I just could not hear that supplementary question at all. It is my fault and I accept that; my ears are not functioning properly.

Katrina Shanks: Are there other industry and employer partnerships that have the potential to absorb increasing numbers of job seekers?

Hon PAULA BENNETT: Yes. We currently have 78 industry and employer partnerships; we will see people being placed in jobs over the coming year. One partnership that I would like to highlight is in the aged-care and disability support sector, which has huge potential. The Department of Labour estimates that the number of paid caregivers needs to more than double to 48,200 by 2036. We are already working with employers, the industry training organisation, and unions in this sector to put Work and Income job seekers on to this career path.

Sue Bradford: Is the McDonald's deal not just an apprenticeship programme for a low-wage economy; and if the Government is serious about closing our wage gap with Australia, would it not be better to restore the Government's recent funding cuts to skilled job creation and apprenticeship programmes, and to boost the minimum wage?

Hon PAULA BENNETT: I am sure there are a number of ideas around how we can help those particularly young people into employment. The job subsidy is one of them. As well as that, I am sure the member has other ideas that she is putting forward now and that are worth listening to.

Sue Bradford: Why are the Minister and her department so optimistic that there will be up to 7,000 jobs for the unemployed from McDonald's over the next 5 years, at a time when more and more people are hanging on to their jobs and when, for example, we just learnt that a new supermarket in New Plymouth is receiving 10 applications for every single job that is available?

Hon PAULA BENNETT: Because McDonald's is opening new restaurants throughout New Zealand rapidly; that is why there will be more jobs with the company. McDonald's is accessing our database, and we have a deal that by the end of the year it will be able to access our job bank, which will allow the company to search for a candidate. So we are more or less work brokering; we are putting people who are on the unemployment benefit at the moment forward for interviews with McDonald's. I will quote from a man who wrote to me recently, a Māori gentleman who came from a large family and who left school at 15. He said: "At 22 I started working for McDonald's. During my time there I remember telling a young boy I was training: 'Listen, mate, if you work really hard you can be anything you want, maybe even own your own store. Last I heard, he owned three McDonald's.' "

^ Back to Top