Simon Bridges: Minimum wage rise 'too far, too fast'

News 01/04/2019

Simon Bridges says the minimum wage increase kicking in on Monday is "too far, too fast" - and teachers are also wondering how it will be paid for.

It's rising $1.20 to $17.70 an hour - the biggest increase in history, in dollar terms. The training and starting-out minimum wage rates are to increase from $13.20 to $14.16.

They're both well-below what the Living Wage campaign says is needed for an adult to get by - that's $20.55 an hour - but Bridges says 25c or 50c would strike a better balance.

"Not $1.20. Too far, too fast," he told The AM Show on Monday. "I think it will mean some people lose their jobs because those small businesses particularly, they just can't suck it up. I've talked with them. I talk with small business owners every week.

"I can tell you it's not just that though, right? It's the threat of capital gains tax, it's businesses over 20 employees losing the right to get rid of someone who's clearly unsuitable before 90 days, it's the re-unionisation that's coming through this so-called fair pay. You put all that together, and this is why our economy is weakening."

And teachers are wondering where the extra money schools will need to pay staff is going to come from.

NZ Education Institute president Lynda Stuart says some teacher aides, support and early childhood centre staff will be owed a payrise today, some up to 4 percent, which is great - but expensive - news.

"The Government will need to put additional money into the operations grants for schools," she told Newshub, or else they'll drop below the minimum wage.

More than 200,000 Kiwis will be affected by the rise in minimum wage.

Bridges said employees are "gloomy", because some will lose their jobs as a result.

"They do not believe they are going to get payrises - they see what's coming at their employer. They're not stupid, they can see what we can see, which is a weakening economy."

Supporters of minimum wage increases say while some might lose their jobs initially, low-income earners tend to spend all their money, boosting the economy and creating jobs in the long-run.

The Government's aim is to increase the minimum wage to $20 by 2021.

Other changes that kick in today include tax breaks for businesses that spend at least $50,000 on research and development; dropping ACC levies from 72c per $100 to 67c; new KiwiSaver options of 6 and 10 percent; superannuation going up 2.6 percent; and giving up to 10 days' leave for victims of domestic violence.