New Zealand's minimum wage rises today.

The minimum wage becomes $17.70 an hour, up $1.20 from $16.50.

This is the second increase in a year and a half, and the hourly rate will rise again to $20 by 2021.

E tū union's director of campaigning, Annie Newman, said the lift in the minimum wage was welcome, but it did not go far enough.

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"E tū is pleased that this is the first of three steps toward a decent minimum wage of $20 in 2021 but $17.70 still means a gap of nearly 15 per cent between the minimum wage and the Living Wage.

"We are calling for all employers to pay the Living Wage because that is the income workers need to live with dignity."

The Living Wage is currently $20.55.

Marisa Bidois, chief executive of the Restaurant Association, said incremental increases to the minimum wage could be managed but larger figures such as $1.20 were seen to have a negative impact on business.

"A recurring comment from employers is their concern for pay parity for other employees and the upward pressure on all wages in the business," Bidois said.

"Wages are one of the hardest expenses to keep under control and, in hospitality, it can be extremely difficult to make ends meet when labour costs rise."

Leave entitlements for victims of domestic abuse also come into effect today.

Finance Minister Grant Robertson said today saw the Coalition Government delivering on its plan to provide greater support for business, workers and families in order to grow the economy and improve the wellbeing of New Zealanders.

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"The Coalition Government has a plan to grow the economy and share the benefits fairly. This package of changes shows the Government is delivering on that plan and will see thousands of business and hundreds of thousands of New Zealanders better off.

"We are delivering these important changes while continuing to manage the Government's books responsibly, shown last week by the strong surplus in the Crown accounts."

Today's changes include:

  • Introducing a $1 billion research and development tax incentive that will provide a 15 per cent tax credit to any business spending a minimum of $50,000 on research and development
  • Dropping ACC levies on average from 72 cents to 67 cents per $100 of liable earnings
  • Adding new KiwiSaver contribution rates of 6 per cent and 10 per cent, and allowing more workers access to KiwiSaver by allowing those aged over 65 to sign up
  • A $1.20 lift to the minimum wage to $17.70
  • Rates of New Zealand Superannuation and Veterans Pension will increase by 2.6 per cent
  • A new right to 10 days' domestic violence leave and flexible working conditions for victims of domestic abuse