Superannuation increases non-wage labour costs

Embargoed until 10:45am – 22 October 2009

Superannuation increases non-wage labour costs

Labour costs rose 2.8 percent in the year to the June 2009 quarter, Statistics New Zealand said today. The salary and wage rates (including overtime) component of the labour cost index rose 2.8 percent. A rise in superannuation costs was the main contributor to an increase of 2.6 percent in non-wage labour costs.

The rise in non-wage labour costs was partly driven by a 30.8 percent increase in employer superannuation costs. This large rise was mainly due to an increase from 1 percent to 2 percent in the minimum KiwiSaver employer contribution, as well as the impact of the tax credit being removed.

Annual leave and statutory holiday costs increased 0.3 percent in the year to the June 2009 quarter. The small rise was partly due to one less paid statutory holiday in 2009 than in 2008, which had a downward impact on the cost to employers. Annual leave and statutory holiday costs fell 0.2 percent for the private sector, and increased 1.5 percent for the public sector.

The index for other non-wage labour costs (medical insurance, motor vehicles available for private use, and employer-related low interest loans) rose 1.7 percent in the year to the June 2009 quarter. The cost of providing medical insurance rose, while the cost of providing employerrelated low interest loans fell. The cost of providing motor vehicles available for private use was flat.

In the June 2009 quarter, workplace accident insurance costs fell 2.5 percent, reflecting decreases in ACC levy rates and increases in pay rates.

Geoff Bascand
22 October 2009
Government Statistician

ENDS

LabourCostIndexAllLabourCostsJun09qtrHOTP.pdf
lcialcJun09alltables.xls

Labour Cost Index (All Labour Costs): June 2009 quarter highlights:

From the June 2008 quarter to the June 2009 quarter:

• Surveyed labour costs rose 2.8 percent.

• Non-wage labour costs rose 2.6 percent.

• Annual leave and statutory holiday costs rose 0.3 percent.

• Superannuation costs rose 30.8 percent.

• Workplace accident insurance costs fell 2.5 percent.

• Other non-wage labour costs (vehicles, medical insurance, and low interest loans) rose 1.7 percent.

• The LCI (all labour costs) indexes have been reweighted. For more information see the commentary section of this release.

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