Labour hits out at Government's increases to minimum wage, benefits

  • 31/03/2024

Labour has lashed out at the Government's changes to minimum wage and benefits, saying despite them increasing, Kiwis will be left with less money in their pockets.

The Opposition said changes to minimum wage and benefit indexation will mean many New Zealanders will get less this year, as the Government gives a big tax break to landlords instead.

The Coalition Government reversed Labour's 2019 law changes that require benefits to increase in line with wage growth. Instead, benefits are indexed to inflation.

"These decisions by the National Government will make life a lot harder for those doing it the toughest," Labour's Social Development spokesperson Carmel Sepuloni said.

The Government announced changes to minimum wage and benefits and will reinstate interest deductibility for landlords.

From April 1, minimum wage will increase by two percent from $22.70 an hour to $23.15. Benefit rates will also be going up, meaning a couple with kids on jobseeker support will get an extra $56 a fortnight. Single parents will get an increase of $44 and a couple receiving super will get $71 more.

Interest deductibility changes will also come into effect on Monday which allows landlords to claim 80 percent of their interest costs from their tax bills.

However, despite these increases, Labour said New Zealanders would get less this year.

"This Government's measly two percent increase to the minimum wage means lower paid workers will again fall behind inflation and go backwards in real terms," Labour's Social Development spokesperson Carmel Sepuloni said.

"The effects of the reversal of Labour's key change to ensure benefits rose when wages did, which the Children's Commissioner said was the best thing that could be done to lift children out of poverty, will also start to be felt. The change means someone on jobseeker support will be $50 a week worse-off, while someone on a disability benefit will be $60 a week worse off by 2030, which is between $2600 to $3120 less a year."

Sepuloni said the support available is becoming more difficult to access as recipients have to re-apply for support much more often. She also highlighted the Government hasn't committed to the same level of funding for free school lunches for kids and the sudden changes to disability funding.

She hit out at the nearly $3 billion "tax break for landlords" and tax cuts for Kiwis which she said won't help as many people as it claimed.

"This is about choices: landlords or disability funding; tax cuts or the school lunch programme, proper minimum wage increases and a policy that would lift children out of poverty," Sepuloni said.

"This April 1 we wish we could say the choices this National Government's making are a joke. But taking working people backwards and making support harder to get certainly isn't funny to us."

However, National has insisted its Government is focused on supporting New Zealand's most vulnerable, especially those on welfare.

"We want to give them an assurance that we will be making annual increases in line with the cost of living, we know they are doing it tough and we are here to support them," Social Development Minister Louise Upston said.