Responding to the Labour Party's promise to pay all government contractors a living wage, the New Zealand Taxpayers' Union says the policy is an expensive feel-good exercise that will hurt low-income New Zealanders more than it will help them.

Taxpayers' Union spokesman Louis Houlbrooke says, "What the Labour Party is actually committing to is taxing minimum-wage workers in order to pay the lucky few contracted to core government departments more than they are worth."

"Since contracting businesses hire on merit, we also know that mandating an inflated wage will deny low-skilled people the opportunity to obtain work experience. Individuals who are below the skill level proportionate with the living wage will be crowded out by higher-skilled applicants."

"If Labour really wants to to help low-income workers, it would urgently pass tax cuts. We have recommended a temporary cut to GST while we recover from COVID-19. That would help all workers — whether they work for the Government or not."

© Scoop Media