Minimum wage rise: 175,000 Kiwis set to get a pay rise of $44 a week from April 1

Minimum wage will increase to $20 an hour on April 1. Photo / 123rf

Minimum wage will increase to $20 per hour on April 1 with the Government following through on its commitment from last term.

The deadline has been welcomed by the Council of Trade Unions, saying it will help the New Zealander's who are the "working poor" facing rent increases.

But National's workplace relations spokesman Scott Simpson called the commitment "a cynical re-announcement" of the last Government's promise designed to draw attention away from the pressure on Speaker Trevor Mallard.

Simpson said the minimum wage rise had been signalled last term and questioned why a press statement was issued on the day Mallard was grilled by a select committee on his $330,000 defamation case.

"It's just cynical."

Minister for Workplace Relations and Safety Michael Wood this morning unveiled the April deadline for increasing minimum wage and said it would mean a $44 a week pay rise for about 175,500 Kiwis.

The increase was estimated to boost wages across the economy by $216 million which meant more spending power.

"There are many Kiwis who earn the minimum wage that have gone above and beyond in our fight against Covid.

"I think everyone agrees those who served us so well during lockdown – including supermarket workers, cleaners, and security guards – deserve a pay rise," Wood said.

The previous Government committed to boosting wages to $20 per hour by 2021 and Labour included the promise in its election manifesto.

Wood said signalling the wage increases over the past three years meant businesses had certainty and time to prepare.

Council of Trade Unions president Richard Wagstaff said minimum wage increases were really important and mean a lot for the many "working poor" who were facing rent increases.

"We think this is a really important and significant step the Government's taken and we're pleased to see it."

Wagstaff rubbished the argument that minimum wage increases led to job losses and said "the facts have not borne that out one bit".

Advice from the Ministry of Business, Innovation and Employment on April's increase from $17.70 to $18.90 estimated a 6500 restraint on job growth.

"Their forecasts and Treasury's on this issue are consistently wrong, wrong, wrong and I think have very little credibility."

Wagstaff said minimum wage increases often coincided with historic lows in unemployment and in fact increased productivity because it forces industries to move away from cheap labour.

"And the people who get the money have more spending power and we know people on the minimum wage spend what they get."

Simpson said the increase would put more pressure on businesses which shouldn't be the ones to pick up the responsibility of increasing wages because the Government hadn't done enough to curb rent increases.

The starting-out and training minimum wages will also rise to $16.00 per hour, to remain at 80 per cent of the adult minimum wage.

The Minimum Wage Act 1983 requires the responsible Minister (currently the Minister for
Workplace Relations and Safety) to review the minimum wage rates by December 31 each year.