Wellington, Aug 26 NZPA - Bank workers' union Finsec is again calling on the Government to put job protection conditions into the retail deposit guarantee scheme.

Finance Minister Bill English yesterday announced the scheme would be extended, in revised form, until the end of 2011.

Finsec campaigns director Andrew Campbell said last night the Government should have extracted commitments to sustain jobs for New Zealanders in the finance industry in exchange for massive public underwriting of businesses.

"With unemployment forecast to hit 8 percent the Government has missed an opportunity to protect jobs within our wealthiest corporations," he said.

"Bill English has given profitable banks a taxpayer underwriting while asking for nothing in return for Kiwi workers."

Finsec demanded the same sort of job protection in May, and at the time Mr English said he would consider the union's position.

"We'll see if we can take it anywhere but I think it would be fair to tell them now that there's no prospect the Government would remove the bank guarantee because of a loss of bank jobs," he said.

"Removing a guarantee from one of our major banks could have quite significant economic effects on thousands of jobs."

When he announced the extension yesterday Mr English said some finance companies would find the next few years "challenging" as they tried to meet a new regulatory regime and changes to the retail deposit guarantee scheme.

The current scheme ends on October 12 next year and the extended scheme announced yesterday would change from that date.

It would become voluntary and higher fees would be charged for lower credit ratings, he said.

Those with a lower rating than BB would not qualify.

The maximum bank deposit per person would also reduce from $1 million to $500,000 and to $250,000 per non-bank deposit.

Over 80 institutions are covered by the scheme, with many of the smaller finance companies benefiting from it at little or no cost.

In total, more than $120 billion of deposits from around 3.5 million depositors are covered by the guarantee.

It was sparked by the collapse of a number of finance companies and some are still struggling as they cope with the credit crunch in the wake of the international financial crisis.

Mr English warned finance companies that he was giving them time to sort their businesses out.

"Any institutions who are covered by the guarantee need to focus on getting their affairs sorted out," he said.

"They will need to prepare for a time past 2011 when there will be no guarantee. Some of those institutions may find that a challenge, but the intention of the guarantee is to protect the depositors on the way through."