Minimum wage hike: National urges Government to defer due to Covid-19 economic uncertainty

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson. Photo / Mark Mitchell

National has joined the increasing chorus of voices urging the Government to defer the planned minimum wage increase in light of the economic uncertainty created by coronavirus.

He has called the current situation an "economic crisis" and even said that New Zealand was on the doorstep of a recession.

"Businesses are facing substantial cost increases when the minimum wage goes up on April 1," party leader Simon Bridges said this morning.

He wants the Government to defer the increase by at least six months.

He told media this morning the wage hike would be the "final straw" for many small businesses.

"I think there is just no question – if we put the minimum wage up, there will be job losses.

"It is much better to have people in jobs in tough times like this than to have them on the dole."

Despite this, both Finance Minister Grant Robertson and Prime Minister Jacinda Ardern said scrapping the wage increase was not on the table.

"It's important to us that we continue to support people on low and middle incomes – the idea that we would stop it is a broad-brush approach that's not appropriate," Robertson told media this morning.

And he said providing a minimum wage increase was something most businesses have already factored in and it will support demand in the economy.

This comes after ANZ – New Zealand's biggest bank – said yesterday that scrapping this year's minimum wage rise seems like "a no-brainer given the pressure on businesses".

Its chief economist, Sharon Zolner, said that at a time when businesses were very nervous, putting this year's minimum wage rises on hold would support employment and better social outcomes.

She noted the Government made the increase conditional on New Zealand's economic situation when the hikes were introduced.

The minimum wage was meant to be raised to $18.90 an hour next month.

The Act Party agrees with Zolner.

"The Government must now make it easier for businesses to create jobs and keep workers employed by delaying this year's minimum wage increase."

Bridges said everyone wants to see higher incomes, but governments need to be responsive to the realities on the ground.

"Many businesses are struggling to keep employing workers right now, which should be the priority."