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New Zealand raises minimum wage to $20/hour and increases taxes for the rich to up to 39%

Wages across the economy will increase by $216m and the higher tax rate will bring in an additional $550m in revenue this year.

New Zealand raises minimum wage to $20/hour and increases taxes for the rich to up to 39%
Image Source: AUCKLAND, NEW ZEALAND - MARCH 26: New Zealand Prime Minister Jacinda Ardern holds a joint press conference with Cook Islands Prime Minister Mark Brown at the Auckland War Memorial Museum on March 26, 2021 in Auckland, New Zealand. (Photo by

New Zealand is raising the minimum wage to $20 an hour and is also hiking the rate of taxation for the country’s wealthiest to 39 percent. The changes in wage and tax measures have come into effect since Thursday and are expected to have an impact on 175,500 workers. The increase in wages will also be accompanied by small increases in unemployment and sickness benefits as well. The higher minimum wage is set to increase wages across the economy by $216m and the higher tax rate will bring in an additional $550m in revenue this year, reported The Guardian



Due to the pandemic in 2020, unions in New Zealand called for an increase to the living wage to $22.10 for the front-line workers. “It’s a big deal to these workers. Part of it’s the money, part of it’s the dignity of feeling rewarded by the community for the sacrifices they’re making,” United Union national secretary John Crocker told TVNZ. "There are two sides to it - they've got the money, they're not struggling as much, but they also feel that respect." Crocker added, "We want the public to get behind this, we want the Government to step up - they're holding the purse strings - we want them to make this a reality for everybody."



Jacinda Ardern's administration has been increasing the minimum wage steadily over the past four years and since 2017 has added $4.25 an hour. This also falls in line with Arden's pre-election promise that she has been working to fulfill. “There is still much more to do, including building more homes, improving our health system, investing in education, training, and job opportunities,” she said. Speaking of the current changes to the wage and tax policy she said these were “real and long-overdue improvements to the support we provide our most vulnerable.” 



Minister for Workplace Relations and Safety Michael Wood said, according to The Independent, “Today’s rise to $20 per hour is estimated to boost wages across the economy by $216 million, giving New Zealanders more money to spend at local businesses. There are many Kiwis who earn the minimum wage who have gone above and beyond in our fight against COVID. I think everyone agrees, those who served us so well during lockdown – including supermarket workers, cleaners, and security guards – deserve a pay rise.” Arden had taken a 20 percent pay cut in April of 2020 in solidarity with those who were financially affected by the coronavirus.



Not everyone was happy with this decision though. The opposition National party stated, "Sharply increasing the minimum wage during a period of extreme uncertainty for small businesses is economic vandalism." The ministry of business, innovation, and employment had advised the government to delay the increase due to economic uncertainty caused by the pandemic. But the current administration is no stranger to taking bold decisions. The wage and tax policy changes are the most recent among the many other implementations brought in by the Ardern government.  



The government announced in March, paid bereavement leave for workers who suffer a miscarriage. Employees will be entitled to three days' leave after a miscarriage under the law, which was passed unanimously by the lawmakers, reported CNN. "I can only hope that while we may be one of the first, we will not be one of the last and that other countries will also begin to legislate for a compassionate and fair leave system that recognizes the pain and the grief that comes from miscarriage and stillbirth," Ginny Andersen, the Labour MP who introduced the bill said in the parliament. 

In February this year, Arden announced that all schools in the country will offer free period products from June, as part of efforts to end period poverty, reported BBC. "Young people should not miss out on their education because of something that is a normal part of life for half the population," she had said at the time. 




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