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Minimum wage decision early test for new Government

In the absence of FPAs, the minimum wage is assuming greater importance, as more Kiwis are employed on it.

The Government is due to decide how much it will increase the minimum wage at Cabinet today.

“Today’s decision by Cabinet on how much it will increase the minimum wage will be another early test for this Government, providing another telling insight into the importance it places on supporting working kiwis,” said Richard Wagstaff, NZCTU President.

“Ahead of the election, the coalition parties were all over the place on this issue – ACT was against any increases and National was muted.

“We know that the numbers of Māori, women, Pacific Peoples, disabled and other disadvantaged groups are over-represented among minimum wage earners. An increase to the rate makes a real difference to people on the poverty line.

“These are also the very people doing it tough in a cost of living crisis and this Government has made it a priority to support people through these challenging times.

“In the absence of FPAs, large scale collective bargaining, the minimum wage is assuming greater and greater importance over time, as more and more Kiwis are employed on it.”

The previous government consistently increased the minimum wage, bringing it up from $15.75 in 2017 to $22.70 in 2023, a 44% increase overall.

In 2023, a full-time minimum wage earner is getting $278 more before tax than they were in 2017.

Treasury and the Reserve Bank are projecting that inflation will be 4.3% for the year ending 31 March 2024. This means the minimum wage needs to increase to at least $23.67 to ensure that minimum wage earners do not take a pay cut in real terms.

“We urge the Government to have a heart and do the right thing by those earning the least and maintain the momentum of the last few years – now more than ever that should be a priority,” said Richard Wagstaff.