Govt outlines pay boost for minimum-wage earners

2018-12-19 03:01:29

New Zealand workers on the minimum wage are set for a significant pay rise.

The Government has announced it will increase the minimum wage to $17.70 an hour on April 1, with further increases to take it to $20 by 2021.

Workplace Relations and Safety Minister Iain Lees-Galloway said the 2019 increase would mean an extra $48 a week before tax for minimum-wage workers.

"The Government is determined to improve the wellbeing and living standards of all New Zealanders as we build a productive, sustainable and inclusive economy," Lees-Galloway said.

"A fair day's work should equal a fair days wage and that is what this Government is seeking to achieve."

In October 2017, the Government promised to raise the minimum wage to $20 within four years as part of its coalition agreement with NZ First.

Prime Minister Jacinda Ardern said the move had long been flagged by the Government.

"This is just steps along the path. It's important to acknowledge that at the moment we have very low unemployment at the moment and this will benefit over 200,000 New Zealanders."

The move was supported by Council of Trade Unions president Richard Wagstaff who said the organisation "obviously supported and welcomed the increases".

However, National leader Simon Bridges said the increase was too far, too fast.

"I acknowledge if you are there on minimum wage, you will welcome this," Bridges said.

"But I also think what is true is big increases over a period of time too far too fast for small businesses, for people who are unemployed and want to get a job and for cost of living which hits the pocket of all kiwis."

Bridges said the wage increase would cause businesses to either sack workers or cause higher costs to be passed on to the consumer.

The announcement provided a blueprint for how the Government expected to roll out the wage increases.

The rate will rise to $18.90 on April 1, 2020 and then $20 in April 2021.

Lees-Galloway said the increase would affect about 209,200 workers and their families.

"About a quarter of those earning the minimum wage – 36,000 people – are parents, with children," Lees-Galloway said.

Starting-out and training wages would also increase from $13.20 to $14.16 an hour from April 1, in order to stay at the legislated 80 per cent of the adult minimum wage.

Kirk Hope, chief executive of BusinessNZ, said not everyone would benefit from the big increase.

"This increase will not affect a lot of businesses, as most of them already pay higher than the minimum wage," he said.

"But it could affect some vulnerable smaller businesses and start-up businesses. There's some concern at that. For a vulnerable business already on the razor edge of profitability, it could mean some job losses."

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