Annual growth in labour costs at 3.7 percent

5 November 2008

Annual growth in labour costs at 3.7 percent

Labour costs rose 3.7 percent in the year to the June 2008 quarter, Statistics New Zealand said today. The salary and wage rates (including overtime) component of the Labour Cost Index (LCI) rose 3.5 percent from the June 2007 to the June 2008 quarter, while the non-wage labour costs component rose 4.1 percent.

The increase in the non-wage labour costs component of the LCI was partly driven by a 4.7 percent increase in annual leave and statutory holidays. This increase, down from the record increase of 9.3 percent recorded in the year to the June 2007 quarter, includes the remaining direct effect of the 1 April 2007 increase in minimum annual leave entitlements from three weeks to four weeks per year.

Employers’ workplace accident insurance costs rose 4.7 percent in the year to the June 2008 quarter, following a 9.3 percent increase in the year to the June 2007 quarter. The latest annual increase reflects increases in pay rates and, to a lesser extent, Accident Compensation Corporation (ACC) levy rates.

In the year to the June 2008 quarter, employer superannuation costs rose 2.7 percent, following a rise of 4.2 percent in the year to the June 2007 quarter. The latest annual increase incorporates the net effect of employer contributions from 1 April to KiwiSaver schemes, after tax credits of up to $20 a week per employee were taken into account.

The index for other non-wage labour costs (motor vehicles available for private use, medical insurance, and employer-related low interest loans) rose 0.3 percent in the year to the June 2008 quarter. The cost of providing motor vehicles for private use and medical insurance both increased, while employer-related low interest loans decreased. Geoff Bascand

Government Statistician 5 November 2008

ENDS

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