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Home / New Zealand

Cost of living: PM highlights minimum wage increase at Wellington event

NZ Herald
31 Mar, 2022 12:10 AM4 mins to read

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As the cost of living continues to rise here there are a few things you can do to keep your energy costs down. Video / NZ Herald

The Prime Minister has joined colleagues in Wellington at an event ahead of tomorrow's increases to the minimum wage and benefits.

The minimum wage will increase 6 per cent from the start of April, a move unions welcomed but some businesses have raised warnings about.

Student allowance and living costs payments will increase by $25 per adult per week.

Prime Minister Jacinda Ardern is expected to highlight minimum wage increases and related measures aimed at combating rising living costs. Photo / Mark Mitchell
Prime Minister Jacinda Ardern is expected to highlight minimum wage increases and related measures aimed at combating rising living costs. Photo / Mark Mitchell

The PM's event comes as the Government faces sustained pressure from National over living costs.

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Speaking this afternoon, Ardern said middle-income earners would also benefit from tomorrow's changes.

She said the family tax credit would be increased.

Ardern said the changes meant some households would be be better off than in 2017, when Labour entered Government.

"For some families, this is $175 a week more now than they were receiving back then."

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She said a Working for Families review would take some time to go through.

"But that hasn't stopped us from [increasing] the family tax credit which we have."

She said the Government had also adjusted the Best Start payments and the threshold for childcare assistance.

Best Start is a weekly payment for families supporting a newborn baby.

Some of the April 1 changes were highlighted in February.

Social welfare benefits and payments will increase due to Work and Income's annual general adjustment.

Ardern said half-priced public transport would start for three months. The Winter Energy Payment starting on May 1 should cover one million people, she added.

Murat Üngör, University of Otago senior lecturer in economics, said inflation was still rising, with domestic and global pressures meaning it was likely to keep rising for some time.

"Those minimum wage gains, along with simultaneous increases to other benefits and superannuation payments, are already eroding," Üngör wrote in The Conversation today.

"Given all this, perhaps the better question is whether minimum-wage policies reduce poverty overall. But again, the research has been contradictory."

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Üngör added: "It's clear low-income households will continue to struggle to keep pace with the rising cost of living."

Workplace Relations and Safety Minister Michael Wood announced the increases in February.

He said the minimum wage would rise $1.20 an hour to $21.20 and the starting-out and training minimum wage would increase from $16 to $16.96.

Wood joined the PM and Social Development and Employment Minister Carmel Sepuloni at the event early this afternoon.

BusinessNZ chief executive Kirk Hope previously said employers - some dealing with large revenue falls due to Covid restrictions - had little time to prepare for the change.

National Party leader Christopher Luxon has called on the Government to adjust tax brackets to match inflation.

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And today he said the April 1 changes would be of no help to middle-income households.

"Labour is giving with one hand and taking with the other. Increases in benefits and minimum wage will be quickly eaten away by the rising cost of living," Luxon said.

"A family with two kids on an average household income of $110,000 will get absolutely nothing out of this package as they don't qualify for Working for Families entitlements."

He said under National's proposal to inflation-adjust income tax brackets, such a family would get a $1600 income boost.

Tributes for Jackson

Ardern paid homage to respected Māori lawyer Moana Jackson.

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The PM said Jackson left his mark "on an entrire generation and beyond" after working in indigenous rights, and Treaty of Waitangi and constitutional issues.

Jackson was a judge on the International Tribunal of Indigenous Rights in Hawaii in 1993, and again in Canada in 1995.

His nephew, Māori Development Minister Willie Jackson, also paid tribute.

"Uncle Moana was just so articulate and I never ever saw him raise his voice to anyone," Jackson told the Herald.

"Uncle could dismantle any argument. He was one of the most brilliant minds I have ever known."

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