Min Wage increase welcome but!

The Kiwi Party
Press Release

"Every time the issue of increasing the minimum wage is raised, there are always those who claim the government should not interfere in the market," said Kiwi Party leader, Larry Baldock.

"Even the Business NZ chief executive, Phil O'Reilly, in his statements reported in the media this week, did not oppose the idea that the Government has a role to set minimum employment conditions. His only concern was with how much businesses could bear.

"Good businesses must keep control of their costs and often labour is a major cost.

"I don’t think employers are inherently selfish and mean spirited. They take great risks with capital and provide a livelihood for the nation. It is just that when times are good, like they were in the last decade, we do not see many examples of them raising wages voluntarily. Because the good times don’t last for ever, those with an eye on the future productivity of their businesses and companies, are reluctant to increase costs.

"If we want to catch up with Australia, increasing the minimum wage to $15 while at the same time offering employers a tax credit to offset the cost, would be a step in the right direction.

This would be a great way of raising wages with a minimal impact on employers.
Labour Minister, Kate Wilkinson, is quoted as saying that “increasing the wage from $12.50 to $15 would have constrained new job growth by between 5400 and 8100 positions.”

But Mr Baldock says, “that would not have to be the case if the Government offset the cost for employers with tax credits. If that raised the earnings of 100,000 Kiwis by $100 a week, the cost would be around $500 million pa.

"However the net cost would be less when you factor in the returned revenue in PAYE taxes, GST and increased business taxes on profits when that money is spent in the economy. Also consider the improvement in business conditions when less of our labour-force are seen leaving for the higher wages in Australia and I would say it is a win/win for all.

The Minister said "We would love the minimum wage to be $15 an hour if it was sustainable and it didn't result in job losses.”

"Well I am telling you Minister, there is a way to make yourself and 100,000 other Kiwis very happy.

Raise the minimum wage to $15 with a tax offset to employers."

Ends

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