Election 2020: First Union slams the National Party for considering stopping minimum wage bumps

The First Union says the National Party would be "punishing the lowest-paid workers in the country" should it stop the next minimum wage boost if elected to power.

National finance spokesperson Paul Goldsmith was asked by Radio New Zealand's Morning Report on Tuesday if a Government led by his party would commit to stopping the minimum wage increasing to $20 per hour.

Goldsmith said while he wouldn't commit to it on Tuesday, it was "certainly something we're thinking about".

The minimum wage is set to rise to $18.90 in April this year, up from $17.70, in what will be the second $1.20 increase in a row under the current Coalition Government. If the current pattern continued, it would reach $20 an hour by 2021.

First Union general secretary Dennis Maga said "dangling tax cuts" is not a way to reduce income inequality.

National leader Simon Bridges this week promised in his economic plan to keep taxes low, keep debt low, create more jobs, and lift New Zealand's GDP, among others.

"Just as we are making positive steps towards reducing income inequality in New Zealand and climbing up the OECD rankings, the conservative Opposition is apparently keen to abandon ship and continue punishing the lowest-paid workers in the country," Maga said.

He said in a statement there had already been a decade of "inaccurate scaremongering" under National.

Maga disagrees with the claim that minimum wage increases would lead to job losses in small businesses.

"Those comments have never had any basis in reality - they are entirely political and do not bear any real scrutiny," he said.

"Many workers would prefer properly funded services over a couple of bucks per week extra in the pocket."

First Union general secretary Dennis Maga.
First Union general secretary Dennis Maga. Photo credit: The AM Show

He said Goldsmith's comments on Tuesday morning suggest "election posturing".

Goldsmith told Morning Report one of the groups struggling with minimum wage increases are exporters because the "rest of the world doesn't care about our cost structure - they just want the thing at the same price".

Productivity was the issue, he said, which would lead to less investment and "ultimately that leads to fewer opportunities for New Zealanders to get ahead". 

The latest figures from Stats NZ show that labour productivity in New Zealand is lower than that of Australia. New Zealand's most productive area has been primary industries while goods-producing has been stagnant. 

The previous National-led Government increased the minimum wage an average of 3.4 percent per year. So far under Prime Minister Jacinda Ardern, it's gone up 6.6 percent per year.