Personally this is just going to make me more risk averse about changing jobs: if I move to a new employer and they suddenly run into budget problems a couple of months after hiring me then I could be summarily dismissed with no warning and no redundancy. Not a chance I’m willing to take while I have a mortgage to pay.
Sure, this law might make employers more likely to take risks when hiring – but employers already have the option of hiring new employees on three month contracts before making them permanent. So the benefits are likely to be negligible – medium and large companies can now avoid this minor bureaucratic overhead – with the drawback being decreased labour market mobility.
So how do those costs and benefits balance out? New Zealand is already one of the easiest countries in the world for companies to do business – that just got slightly easier. Great. Decreasing labour mobility will reduce productivity and wage growth. National based it’s entire election campaign on improving these two metrics and this policy is another indication that they have absolutely no idea of how to do that – so why not toss some red meat to their members and donors at their conference this weekend instead?