Govt strikes deal with McDonald's

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Thousands of beneficiaries could soon be flipping burgers under a deal between Work and Income and McDonald's.

Social Development Minister Paula Bennett revealed the agreement during a select committee meeting at Parliament yesterday. The agreement will provide up to 7000 unemployed for the fast-food chain's restaurant expansion plans over the next five years.

During a debate on unemployment numbers, Bennett said Work and Income was taking an innovative approach to finding work for the 2700 people a week now signing on for the dole.

She said Work and Income was placing about 1600 people a week in jobs, leaving a weekly increase in beneficiary numbers of 1100.

Unemployment was rising more sharply than in previous recessions and was having a "major impact" on the economy, Bennett said.

She said the rise in beneficiary numbers had cost taxpayers $1.2 billion since last October, and the Treasury forecast that total benefit-related expenditure would rise by $4.9b to hit $38.6b over the next five years.

On current projections, unemployment would reach 80,000 by early next year and peak at 90,000 the year after still short of the 168,000 unemployed at the height of the 1996 recession.

Under the deal with McDonald's, Work and Income would help with the recruitment and training of 7000 staff in service roles and "positions which provide a career path", Work and Income deputy chief executive Patricia Reade said.

"We're very pleased that we will be able to offer unemployed people over the next five years opportunities in the food and hospitality trade," she said.

McDonald's intends to open 30 new restaurants over the next five years.

Labour employment spokeswoman Ruth Dyson said that while jobs at McDonald's were better than being on the dole, the plan was "not the best example" of the Government's commitment to "upskilling the economy".

The deal followed the Government's decision to cut a tertiary education training allowance for beneficiaries, she said.

"If that's the vision for employment in New Zealand, it's got quite a few pieces missing out of the jigsaw," Dyson said.

Prime Minister John Key said he was concerned about the extra money required to fund benefits. "When we spend a lot on benefits it means there are a lot of New Zealanders not really earning a lot. Life on a benefit is not exactly a luxurious life," he said.

The recession has led to the Government postponing an election pledge to make people on the domestic purposes benefit go back to work once their eldest child has turned six.

- The Press