By Grant Fleming of NZPA

Christchurch, Oct 30 NZPA - Labour has unveiled a 13-week assistance package that will give $2000 to all those who lose their jobs as a result of expected tough economic times.

Labour leader Helen Clark started the day on the defensive after revelations her party president had flown to Australia in a bid to dig dirt on National leader John Key's past, but she was quickly back on the front foot releasing Labour's plan for a "job search allowance".

The release of the package gave Labour the jump on National, which will announce a similar package tomorrow.

Miss Clark said under Labour's package all people who lost their jobs, who had been in the workforce for at least five years, would be able to claim the unemployment benefit for 13 weeks without any means testing.

It would be a permanent feature of the benefit system.

That would open the door to assistance to thousands of families where both couples worked, who would have otherwise been excluded.

"It's hard to see with the world economy like it is at the moment that there won't be some fallout in our economy," she said.

"There will be families that have been reliant on the two incomes coming in, for whom it will be a shock, and what we are proposing is to make sure through the job search allowance that we moderate that and give people a period of time where they can adjust their circumstances and get active support to look for new work opportunities."

Miss Clark said the 13-week allowance would be available only to those who were laid off, not those who were sacked or choose to leave their jobs.

People would have to apply to Work and Income to get the allowance and they would still be subject to either a one- or two-week stand-down depending on their income.

Most people would be eligible for $153 after tax -- the standard single rate of unemployment benefit.

Miss Clark said the package was fair, applied to everyone and was simple to administer.

"It doesn't require bureaucrats making a whole lot of decisions about whether people are deserving or whether they are likely to get back into work.

"It's saying if you've been in the workforce five years and you lose your job you are entitled to the job search allowance."

Miss Clark said it was difficult to judge the cost of the package, but Labour estimated it would cost $50 million a year "at the outside", funded from general revenue, based on some forecasts that suggested unemployment could climb as high as 5.6 percent.

She fended off suggestions the package amounted to welfare for the wealthy, saying she doubted whether very well off people would want to go to the trouble of signing up at Work and Income.

She also would not say when Labour started developing the specific allowance.

National leader John Key described the package as a "cynical attempt to move the news agenda off the back-firing 'H-fee' smear campaign they have been running".

"No great surprise that Labour would try and take our ideas. They don't have any of their own original ideas anymore."

Mr Key has said he will announce a package tomorrow of temporary cash grants for people with financial commitments, such as mortgages, who lose their jobs.

He told a Greypower meeting today he did not want to overstate the package's size, nor understate its importance for those who lost their jobs.

"It will give them confidence and comfort in their time of need, but the really big challenge is getting our economy going faster again."

He said there would be a time limit on the package, but people would have to wait until tomorrow for the details.

NZPA PAR gf pw kn