National's Erica Stanford slams Government for not making 'tough political decisions' on minimum wage

"Tough political decisions had to be made."

That's the view of National MP Erica Stanford on the Government's upcoming minimum wage increase.

But Labour's Michael Wood said the increase "is to make sure everyone gets paid fairly".

On April 1, New Zealanders on the minimum wage will start seeing more money in their bank accounts - increasing to $22.70 from $21.20.

The increase was announced on Wednesday by Prime Minister Chris Hipkins, who said it was to help the lowest-paid New Zealanders struggling with rising consumer prices. Annual inflation has risen by 7.2 percent in the previous two quarters. 

Workplace Relations Minister Wood on Friday said the increase was "to give Kiwis a decent minimum wage to keep up with the cost of living".

"That's what our Government's done," he told AM.

But National has said the increase was too much. 

"We understand that people are doing it really tough but the tough political decisions had to be made," Stanford said. 

"Here's the question: What do you do for teachers? What do you do for police? What do you do for defence? Are you going to do it for everyone, Michael?

"This… [is] the inflationary price/wage spiral that we're going to get into that the Federal Reserve in America, that the Reserve Bank here is worried about. This Government isn't worried about it but everybody knows it's where we're going to end up."

Erica Stanford.
Erica Stanford. Photo credit: AM

National has said it supports modest minimum wage increases but its main finance proposal was to increase tax thresholds to inflation. 

But Wood told AM host Melissa Chan-Green Labour was "the party that invests in decent pay for all workers".

"That's in contrast to the National Party," he said.

The Government last week also extended cuts to fuel excise duty, road user charges and public transport fares - despite signalling in December that support would soon end.