ACT's pledge to reverse sick leave, pause minimum wage hikes, scrap extra public holiday and benefit boost

If the centre-right wins in 2023, ACT promises to pause minimum wage hikes, reverse sick leave increases and the upcoming benefit boost, and scrap either the new Matariki holiday or another public holiday.

The benefit will rise by $20 a week in April, the second annual rise as part of the Government's $3.3 billion beneficiaries package in Budget 2021. The Government already increased the benefit by $25 a week in 2020.

Along with an extra $20 a week as part of increases to Family Tax Credits aimed at families on the lowest incomes, Prime Minister Jacinda Ardern hopes it will help low-income families cope with three-decade high 6 percent inflation.

"All of those will help with easing the pressure but we continue to think about what we can do to particularly support middle-income earners during this time," Ardern said earlier this month.

But ACT MP Karen Chhour, spokesperson for social development, says the Government is entrenching welfare dependency with the benefit increases.

"Welfare should be about helping people get back on their feet, not allowing them to abuse the system and depend on the state. Welfare should not be a lifestyle choice," Chhour says.

"Almost 188,000 adults are receiving the Jobseeker benefit, yet we have severe labour shortages in many sectors that are not being addressed."

The Government also hopes that increasing the minimum wage from $20 per hour to $21.20 in April will help low-income earners get by.

"The wage increase will have a stimulatory effect on the economy as many workers will spend the extra money on goods and services, which in turn, will help support businesses," Workplace Relations Minister Michael Wood said last month.

ACT MP and small business spokesperson Chris Baillie wants a three-year pause on minimum wage increases.

"ACT would put a moratorium on minimum wage increases. It's simply unaffordable and businesses need certainty now more than ever."

ACT Party caucus.
ACT Party caucus. Photo credit: Newshub / Zane Small

He also wants to scrap the new Matariki holiday coming up in June - or another public holiday in its place.

"An additional public holiday will cost businesses $450 million. With businesses still suffering as a result of unworkable rules and a recession on the cards, businesses can't afford to keep taking hit after hit from the Government."

Matariki, which traditionally heralds the start of a new year for Māori, will be celebrated as a new public holiday on June 24 this year.

"Matariki will be a distinctly New Zealand holiday; a time for reflection and celebration, and our first public holiday that recognises Te Ao Māori," Ardern said in her speech at Waitangi.

Baillie says businesses will struggle.

"If Matariki is added to the list of holidays, it should be swapped with one of the other 11 statutory holidays instead. Introducing another holiday is just a kick in the guts for hard-working business owners struggling to keep afloat."

ACT would also reverse the increase in sick leave from five days to 10, incentives for hybrids and other low-emissions cars, and get rid of Labour's Fair Pay Agreements.

The Government's justification for the increased sick leave was COVID-19 and the importance of people staying at home when they're sick.

As for the clean car incentive, the Government last year introduced a raft of measures in response to the 90 percent rise in New Zealand's transport emissions since 1990. The sector produces 42 percent of the country's CO2 emissions.

In a bid to increase the uptake of electric vehicles (EVs), the Government introduced rebates of up to $8625 for newly imported electric and plug-in hybrid vehicles, that would eventually subsidised by placing fees on imported high emitting cars of up to $5175.

From April, those charges on the purchase of high emitting vehicles will begin, while smaller rebates on new and used import hybrids and other low emission vehicles will also be introduced.

The Clean Car Discount has led to a 15 percent reduction in emissions from new imported vehicles and more than tripling the number of new EVs being sold each month.

Then there's Fair Pay Agreements (FPAs), a set of terms and conditions - including wages and working hours - that employers in a particular sector must abide by, with the overall aim of raising standards.

All employees are covered by FPAs under the scheme, even if they aren't part of a union, and any union can initiate the FPA process as long as it can demonstrate support from either 10 percent or 1000 employees in the industry or occupation.

Business NZ and the Council of Trade Unions were initially announced as coordinators but Business NZ has since spoken out against it and will not accept the $250,000 on offer from the Government.