Labour's Promise to Increase the Minimum Wage

In a dramatic turn of events, the National Party and Bill English found themselves ousted from the Beehive and saw the end of the their government's nine year seat in power. Labour, NZ First and the Greens emerged in a victorious coalition and have vowed to be a government of change.  In the last twenty-four hours, new government policies have been announced and are set to be implemented in the coming months.

High on the list of changes is Prime Minister-elect Jacinda Ardern's proposal to increase the minimum wage from $15.75 to  $16.50 by April 2018 with a targeted increase of $20 per hour by 2021.  The announcement poses a concern for the Employers and Manufacturing Association, members of the association have voiced their concern over the  wider economic implications of a policy and warned that the economy could come to a 'grinding halt'. Ardern points out that a higher minimum wage means Kiwis who are living on low wages will get extra income in their pockets and enable them to survive, and that the extra income will ultimately be invested back into the economy. Higher wages is a major concern for small New Zealand businesses with many business owners questioning the negative impact of such changes on business sustainability. Ardern acknowledges these concerns as valid ones and is open to adopting a lower-tax model for small businesses. 

We are a low wage economy. There are people living on a minimum wage that cannot adequately live on the level of that wage.
— Jacinda Ardern | New Zealand Prime Minister and Labour Party Leader