Jacinda Ardern rules out delaying minimum wage increase amid COVID-19 economic pressure

Prime Minister Jacinda Ardern has ruled out delaying the planned minimum wage increase amid COVID-19 economic pressure, despite ANZ Bank recommending it.

The Prime Minister was asked at her Monday post-Cabinet press conference if she is considering delaying the April 1 minimum wage increase, and she said "no".

"I think one of the benefits we have relative to other economies is that not only are we well-placed in terms of low debt, our position around surpluses, the upgrade package and that stimulus already going into the economy," Ardern said.

"Also, we have to keep in mind that what we need people to keep doing is continue to spend and consume," Ardern added, which she said is "part of keeping the economy ticking over". 

David Seymour is planning to lobby New Zealand First to try and delay the scheduled minimum wage increase to help struggling businesses amid the coronavirus economic slowdown. 

The ACT Party leader is urging the Government to delay the $1.20 increase to the minimum wage on April 1, in the face of "deteriorating economic conditions", and he believes New Zealand First might be able to help.

"It's not a bad idea. They've got to do something useful before they leave Parliament," Seymour told Magic Talk on Monday. "I might write to them to see - if they can't suggest it."

New Zealand First did not respond to Newshub's request for comment before this article was published. New Zealand First has stepped in over policies not popular with the Opposition before, such as the proposed capital gains tax.

Seymour's suggestion to halt the next minimum wage increase is supported by ANZ Bank, which on Monday said "scrapping this year's minimum wage rise seems like a no-brainer" as the global economy struggles under the COVID-19 trade slump.

ANZ Bank's chief economist Sharon Zollner wrote on Twitter: "At a time when businesses are very nervous, putting this year's minimum wage rises on hold would support employment and better social outcomes."

Seymour blasted the Government last week for its "typical" response to the COVID-19 economic impacts, such as easing access to emergency benefits but "so far refusing to ease pressure on businesses trying to keep people working".

Speaking to Magic Talk on Monday, he said: "I look at this Government and I notice that one of the first things they did is say they're going to make it quicker to get on the benefit if you lose your job.

"How about making it easier for people to keep their jobs just by delaying the increase in the minimum wage? They might not have so many people losing their jobs and going on a benefit."

Seymour described the proposed delay as "administratively simpler" and said it would "give businesses a break in tough times, and might actually help some people keep their jobs".

He pointed to a review of the minimum wages hikes by the Ministry of Business, Innovation and Employment (MBIE) released earlier this year, which claimed it'll cost the country 6500 jobs.

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

The Council of Trade Unions has argued that increasing the minimum wage takes the pressure off low income workers, giving them the ability to not have to take on extra work.

Unemployment is also low at 4 percent - below the 4.7 percent when the Government came into power in 2017. When unemployment is low wages tend to go up, as businesses seek to outbid each other for good employees.

The Opposition's finance spokesperson, National MP Paul Goldsmith, said last month National is "certainly thinking about" stopping the next minimum wage boost if elected to power, over concerns that small businesses are struggling.