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Fact check: John Key dishonest on minimum wage

15 September 2008

Fact check: John Key dishonest on minimum wage

John Key’s attempt to persuade low paid workers he met at a South Auckland market that tax cuts could substitute for significant increases in the minimum wage is nothing more than ‘silly dishonesty’, Finance Minister Michael Cullen said.

Mr Key refused to commit to annual increases to the minimum wage when questioned over the issue in Otara on Saturday, saying only that he would cut taxes.

“Even if we assume that a National Government would increase the minimum wage by the forecast rate of inflation – something they completely failed to do in the 1990s – the second tier tax would have to drop to zero by 2011 to make up the difference with the strong increases Labour has delivered.

“This is absurd, but it is exactly what would be required. In 2009 the second tier tax rate – currently 21 per cent – would have to fall to 15 per cent, then to 7.6 per cent in 2010, and to zero in 2011.

“Even after these absurd hypothetical changes, workers on the minimum wage would still be slightly worse off than they would be under a continuation of Labour’s minimum wage increases plus the tax cuts we are delivering from 1 October.

“Mr Key can visit South Auckland all he likes, but he can’t pretend that National has the interest of low income New Zealanders at heart.”


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