New Zealand Is Increasing Taxes On The Rich | Raising The Minimum Wage Of Workers |

 Another positive announcement of the year, the Jacinda Ardern-led New Zealand government has decided to increase its minimum wage and the top tax rate for the rich.

The minimum wage will be increased to $20 an hour, with increases in unemployment and sickness benefits. The government has decided to increase the minimum wage by $1.14 per hour. 

This increase is expected to help nearly 175,000 workers and help the economy by $216 million.

The two big changes come less than week after the island country passed a legislation to give mothers and their partners the right to paid leave following a miscarriage.

The deprivation allotment, passed with one accord in parliament, gives employees three days leave when a pregnancy ends with a miscarried without having to make use of their ailing leave.  

Under National’s proposed tax cuts, it’s the people on bigger incomes who reap the rewards. Someone on $30,000 a year would only receive $8.10 a week in tax cuts, while a person earning $90,000 a year would receive $58.10 a week - over seven times more. The new top tax rate will apply to anyone earning more than $180,000 a year, about 2% of New Zealanders. The government estimates it will bring in an additional $550m in revenue this year.

Speaking about the changes this week, the prime minister, Jacinda Ardern, said they fulfilled a pre-election promise and represent “real and long-overdue improvements to the support we provide our most vulnerable”.

“There is still much more to do, including building more homes, improving our health system, investing in education, training and job opportunities,” she said.

New Zealand continues to struggle with high child poverty rates and housing costs. Housing in Auckland, for example, is among the most unaffordable in the world, with house prices sitting at around 11 times average income.

The opposition National party opposed the minimum wage rise: “Sharply increasing the minimum wage during a period of extreme uncertainty for small businesses is economic vandalism,” its workplace relations spokesman, Scott Simpson, said. 

The ministry of business, innovation and employment had advised ministers to delay the increase because of the economic uncertainty caused by Covid-19.

As the world continues to deal with the economic impact of COVID-19, there are challenges ahead. Increasing the minimum wage isn’t a silver bullet-instead, it’s one part of our wider plan to support New Zealand's economy recovery, while making sure we continue to work on long-term challenges like inequality. Labour’s plan will create jobs, support small businesses, and grow the economy while responsibly managing debt and ensuring we protect our essential services like health and education.