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Minimum Wage Decision A Signal Of What This Government Really Thinks About Workers

The decision today by the Government to cut the minimum wage in real terms is a sign of what they think about workers, said CTU Economist Craig Renney.

“All New Zealand workers have the right to a liveable income to support their families – they deserve to be paid a Living Wage,” said Renney.

“The Government is increasing the minimum wage by a paltry 2% to $23.15. This falls well short of the Living Wage rate, which is currently $26. That is simply heartless at a time when so many are doing it tough.

“Inflation is currently 4.7%, and a 2% increase means in real terms cuts for the lowest income workers across New Zealand. Taking money away from hundreds of thousands of workers during a cost-of-living crisis defies understanding and is poor economics.

“The proposal wasn’t even supported by MBIE officials, who recommended a 4% increase, rather than a 2% increase. That’s an annual difference of $944.32. If the minimum wage had kept up with inflation, that would have been a $1,274 difference annually – or $24.52 a week.

“How are workers meant to keep up with rising food and rent costs if the Government is cutting their wages in real terms? This is a Government that doesn’t seem to know how difficult life is for working people and those on low incomes. It’s simply out of touch and focused on tax rises for the wealthiest people and landlords instead.

“Such an inadequate increase may save some New Zealand businesses a few dollars, but it will cost everyone more in the long-run. It will mean higher payments in tax credits. It will mean higher support for rental payments. It makes no sense from an economic and or fiscal perspective.

“The Government should do the right thing and deliver a minimum wage that doesn’t see New Zealand workers fall further behind,” said Renney.

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