The Government will be developing an unemployment insurance scheme along with Business NZ and CTU to prepare for the future of work.

The public will be able to consult on an "ACC-style" unemployment insurance scheme later this year that would provide 80 percent of income for people who may be made redundant or lost their jobs through no fault of their own.

The scheme has been announced in this year's Budget and will be developed by a tripartite working group with Business NZ, the Council for Trade Unions, along with the Government.

Finance Minister Grant Robertson says Covid-19 has exposed vulnerabilities in job security, and the risk to "dramatic" income loss from unemployment.

"Finding a job takes time, and many workers may accept lower-paid jobs that don’t match their skillsets, because financial pressures mean they need work quickly. After the Global Financial Crisis, Canterbury earthquakes and Covid-19, governments have had to institute ad-hoc programmes to support those who have lost their jobs," Robertson says.

Business NZ chief executive Kirk Hope says it will be a joint effort with the Ministry of Business, Innovation and Employment and the Ministry of Social Development.

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Hope says the scheme will be modelled on similar schemes running in Scandinavian and European countries.

The redundancy insurance scheme will work for a fixed period of time, with minimum and maximum caps linked to training opportunities.

CTU economist Craig Renney says the scheme will be a "huge" change to workers' protection.

"The overarching purpose is to get them back into work as quickly as possible," Business NZ chief executive Kirk Hope says.

Renney says the scheme aims to protect workers in jobs that are vulnerable to automation and the future of work.

Hope says the scheme is intended to help people re-skill and get back into work.

"New Zealand doesn't have any redundancy scheme and there's little support if people are out of work. If people stay out of work and their income drops it's a pretty tenuous situation. So this thinking is an insurance scheme for people out of work," he says. 

"The overarching purpose is to get them back into work as quickly as possible."

This year's Budget also announced the reinstatement of the Training Incentive Allowance to level four to seven qualifications.

Social Development Minister Carmel Sepuloni says 16,000 people will be able to retrain, gain higher skills and transition into new careers. The scheme will have $127 million invested over four years.

“The allowance supports sole parents, carers and disabled people on eligible benefits with the upfront and ongoing costs of study, such as fees, books, transport and childcare costs," Sepuloni says.

“Sole parents, disabled people and carers are among those most affected by the economic effects of Covid-19. They also face higher costs and barriers to education and training."

Over the next two years the Government will invest $44m in continuing the Digital Boost - business training courses for SMEs - and providing new digital business advisory services to help Digital Boost graduates adopt digital ways of working in their businesses.

One of the main messages from small business in the wake of Covid-19 was the importance of having the knowledge and tools to compete in a digital world, Robertson says.