Minimum wage to increase next year
New Zealand workers on the minimum wage are set for a significant pay rise, as the Coalition Government signals how it will move toward its goal of a $20 p/h minimum wage by 2021.
Minimum wage will increase to $17.70 an hour on 1 April 2019 – an increase of $1.20 per hour
For a full time worker this will mean an extra $48 a week before tax – enough to make a real difference for working people, says Workplace Relations and Safety Minister Iain Lees-Galloway.
“The Government is determined to improve the wellbeing and living standards of all New Zealanders as we build a productive, sustainable and inclusive economy,” says Iain.
“Today’s announcement also provides certainty to businesses who told us they wanted to know when the changes to the minimum wage were going to happen.
“With the labour market tight and unemployment at the lowest since 2008 at 3.9 per cent, now is the right time to lift the wages of our lowest paid New Zealanders.
“The increase to $17.70 p/h will benefit approximately 209,200 workers and their families, lifting wages throughout the economy by $231 million per year and making a big difference for families.”
About a quarter of those earning the min wage – 36,000 people – are parents, with children.
This means the starting-out and training wages will increase from $13.20 to $14.16 per hour from 1 April 2019, in order to stay at 80 per cent of the adult minimum wage.
“To provide businesses and workers with greater certainty, I am indicating minimum wage rates of $18.90 to come into effect on 1 April 2020 and $20.00 to come into effect on 1 April 2021. These indicative rates are subject to each year’s annual review, in accordance with the statutory process, which will take into account the economic conditions at the time,” says Iain.
“The Government carried out wide consultation with employer and worker representatives, including Business New Zealand and the CTU, and listened to the need for certainty on our travel toward $20 p/h minimum wage by 2021.”
New Zealand First spokesperson for Employment Relations Clayton Mitchell says raising the minimum wage is one part of the Government’s approach to lift the wellbeing of all New Zealanders, and was a key part of the Coalition Agreement.
“New Zealand First is excited to be part of a Coalition Government that is serious about building our economy from the bottom up,” says Clayton.
“This is a good move for New Zealand and a great move for New Zealanders ensuring a fair day’s work receives a fair day’s pay.
“The Coalition Government is creating good employment opportunities for Kiwis with the Provincial Growth Fund, innovative training schemes like Mana in Mahi – Strength in Work and encouraging more post-school training through the Fees Free scheme.”