Mike Hosking: National's minimum wage tip to erupt election battlefield

National could scrap the Government's planned minimum wage increase if it wins this year's election. Photo / Paul Taylor, Hawke's Bay Today.

If National curtails the minimum wage rises, of all the centre right-ish sort of things they will do, it will perhaps be the most contentious.

Maybe that is why they've suggested it and not confirmed it? Maybe it's the old exercise of "running it up the flag pole" to see how it will fly.

It makes sense economically. Their argument is their method of money in your pocket is tax cuts and let everyone keep more of their income. That's a more accurate measure of what you earn, as opposed to merely handing out pay rises whether they are earned or not. That is why they should, in fact, make this policy.

What you earn per hour isn't actually the issue, it's what's left over at the end that counts. A government that boosts the minimum wage, then takes it all away with increased costs, defeats the purpose of the exercise.

You may remember when the first minimum wage rise was announced to some fanfare, the regional fuel tax wasn't far behind. So yes, you're paid more but yes you've just tipped that back into government coffers by way of a tax.

Further, all wages and income should be derived from productivity, not philosophy. You are paid more, when you do more. If you are paid more and nothing more has been made or sold, all that happens is that cost is then passed on as far down the line as it can be, either in prices that are put up, or profits that are driven down. It infiltrates into decisions like hiring, expanding or borrowing. You pay more without earning more, someone picks up the tab, and that someone is the rest of us.

A couple of our kids are pretty much on the minimum wage. They're out in the workforce in their first jobs. They've got their foot in the door, working long hours, and grafting hard. I see their pay packets, it's not a lot.

Life is expensive, they have hit the cold hard reality that every dollar they earn is used up, and every dollar they earn is to be thought about before being spent.

There is nothing like the cold hard rush of the real world experience, away from mum and dad, and the safety blanket of home, to make you realise that money is hard earned, and even harder to keep. And as a parent you see what a buck an hour means.

That's the politics of it, that's why this government has done what it's done, it's feel good. And that's why National, I suspect, are only dipping their toe.

But a minimum rise for no other reason than largesse, then flows to everyone else's wages as the gap closes. One rising leads to everyone wanting a rise.

Money is earned, not given away. That is the centre left, centre right gap. One side gets it, the other side doesn't.