Thursday, 5 March 2020

Coronavirus: Government must delay minimum wage increase

“The Government must delay the 1 April increase to the minimum wage in the face of deteriorating economic conditions”, according to ACT Leader David Seymour.

“It is typical of the Government that they are prepared to ease access to emergency benefits for people who lose their jobs, but have so far refused to ease pressure on businesses trying to keep people working.

“We are now facing the prospect of a recession. Many businesses will have declining revenues and won’t be able to sustain a 7 percent increase in labour costs. That’s before other costs like KiwiSaver are taken into account.

“There is no practical reason the Prime Minister can’t do it. This is a Government that puts Parliament into urgency to change foreign political donation laws in 24 hours. To change the minimum wage, it doesn’t even need to go to Parliament. The Prime Minister needs only to sign an Order in Council. It could be done this afternoon if she had the political will.

“MBIE already predicts 6,500 fewer jobs will be created as a result of the 1 April minimum wage increase. It also said things could be worse in difficult economic times.

“In its annual minimum wage review in February, MBIE told the Government that, in the case of ‘a worsening economic context, a lower increase…would need to be considered to mitigate against disemployment’.

“We now have that worsening economic context. Slowing economic growth, low business confidence, international trade tensions and now a global public health emergency.

“The Government has made it easier for workers affected by coronavirus to access benefits. It must now make it easier for businesses to create jobs and keep workers employed by delaying this year’s minimum wage increase.

“Tourism, forestry, hospitality and other sectors of the economy will be seriously hurt by the impact of coronavirus.

“Of course, if businesses are doing well, they can still raise wages. The question is whether businesses that can’t afford increase wages should be forced to by the Government.”