Here’s what Christopher Luxon, MP for Botany, had to say about it….
Global economic research shows us that consistent, incremental increases in the minimum wage are quite digestible and positive when the economy is growing strongly. However, increases in the minimum wage actually can create unemployment when the economy is not experiencing high growth or has declined as it has in New Zealand in the last year. A typical Botany small business, of which we have thousands, employs on average 5-15 people. Under this government, it now has to fund a 25% increase (over the last 3 years) to the minimum wage (which ultimately flows through to wage inflation at higher levels too), the cost of 5 extra sick days per employee each year, and a new public holiday. It’s a big increase in their costs that they simply cannot pass through to their customers with higher prices to recover those costs. So, they either end up taking a big hit to their profits and putting the future viability of their business at risk, or cut their costs including their staff. It’s certainly a big disincentive for that business owner to employ that one extra new person that they wanted to help grow the company and that we so desperately need in New Zealand given we now have over 150,000 people unemployed and many others with reduced hours or underemployed. MBIE have actually advised the government increasing the minimum wage now as they plan will make another 9,000 people unemployed.At this time in our economic cycle we need really practical make “the NZ boat go faster” economic actions, and just ideologically increasing the minimum wage is simply the wrong action at the wrong time.
GOVERNMENT IGNORES MBIE’S ADVICE TO DELAY AND REDUCE MINIMUM WAGE HIKE