New Zealand has raised its minimum wage to $20 an hour and increased the country’s highest earners’ top tax rate to 39%. The new changes will be implemented on Thursday, 8th April, alongside small increases to sickness benefits and unemployment. The government has estimated that the minimum wage increase, a rise of $1.14 per hour, will affect up to almost 175,500 workers and increase wages across the economy by $216m.
The new top tax rate will apply to anyone earning above $180,000 a year, which is about 2% of New Zealanders. The government has estimated that it will bring in an additional $550m in revenue this year.
OECD data revealed that New Zealand’s previous minimum wage, as of 2019, was already among the top five highest in the world. Over the COVID-19 pandemic, many of the country’s essential workers have been minimum wage earners – including those who work in the border jobs and at the airports and are considered the frontline defence against the virus.
Speaking about the changes this week, the prime minister, Jacinda Ardern, said they fulfilled a pre-election promise and represented “real and long-overdue improvements to the support we provide our most vulnerable”.