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Today’s $1.20 per hour wage hike will be welcomed by workers on the minimum wage but will cost jobs and make it harder for businesses already struggling with new taxes and higher costs, National’s Workplace Relations spokesperson Scott Simpson says.

“National supports consistent increases to the minimum wage and we raised it every year we were in Government. Increases need to reflect the economic climate and inflation. While signalled, a 7 per cent hike to $17.70 an hour is steep, and so is the extra $231 million a year in costs it will impose on New Zealand businesses.

“While the announcement is good news for workers on the lowest pay rates for others it will mean their jobs are in jeopardy as businesses will struggle to absorb the new costs.

“Just last year MBIE said a similar increase of $1.25 would cost 7000 jobs and increase inflation. Some businesses will struggle as a result of this increase and jobs will go with them. We already have the highest minimum wage relative to the average wage in the OECD and this will make us more of an outlier. 

“It’s yet another decision made by this Government which will make it harder to do business.

“The problem is Workplace Relations Minister Iain Lees-Galloway knows that and has said he doesn’t care. Good intentions, bad outcomes.

“You simply can’t just legislate your way to prosperity – if you could you’d simply make the minimum wage $50. But artificially inflating wages is no substitute for an economic plan.

“The fact is these decisions have consequences but like so much of what this Government does it hasn’t thought those through.”

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