The minimum wage is set to increase by $1.50 an hour from 1 April

Prime Minister Chris Hipkins announced the new rate of $22.70 per hour as part of a raft of changes to government plans.

The Starting-Out and Training minimum wage rates will be maintained at 80 per cent of the adult minimum wage.

“I do understand that a number of small businesses will have concerns about this decision, however in a cost-of-living crisis we can’t leave those on the lowest incomes behind,” Hipkins said.

“An inflation-adjusted lift to the minimum wage will mean that thousands of New Zealanders don’t go backwards.”

Hipkins said analysis from MBIE that fed into the government’s decision suggests this increase is unlikely to have a significant impact on unemployment, because it is broadly in line with existing average wage growth across the economy.

“The impact on inflation is negligible. In the 2022 Review, MBIE estimates that an increase of 7 per cent in the minimum wage will have only a minor inflationary impact of 0.1 per cent on the wages portion of GDP.”

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