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01st Apr 2021

New Zealand raises minimum wage and increases taxes on the wealthy

Charlie Herbert

The minimum wage will be over £10

From April 1st, New Zealand will raise its minimum wage and taxes on the country’s highest earners. The minimum wage will go up from $18.90 to $20, which is the equivalent of £10.17, whilst anyone earning more than $180,000 will be taxed a considerable 39%.

For context, the minimum wage here for those aged 23 or over is £8.91.

The increase of the minimum wage is estimated to impact up to 175,500 workers and will see an extra $216m dished out across the economy.

The move has been welcomed by the country’s Council of Trade Unions, with their president Richard Wagstaff saying: “It’s important that the $20 minimum wage has finally become a reality.

“Over 170,000 Kiwis will have a pay rise, and for those who were on the previous minimum wage of $18.90 [£9.61], working a 40 hour week, they will have an increase of $44 a week (before tax).”

Wagstaff mentioned that the impact of Covid on the policy change, saying that the pandemic “showed us all just how crucial many jobs are to the functioning of our society, jobs in health, cleaning, on our border or supermarkets,” and that the increase in the minimum wage is a way of valuing those on the lowest wage more.

Meanwhile the increase in tax for the nation’s highest earners will affect around 2% of the population. Anyone earning over $180,000 (£91,000) in New Zealand will now pay 39% tax, with the government estimating that this will bring in an extra £550m (£279m) to the economy.

Prime Minister Jacinda Ardern has said that the changes represent a fulfilment of her pre-election promise to represent “real and long overdue improvements to the support we provide our most vulnerable.”

So the essential workers of New Zealand have been rewarded for their work throughout the pandemic with a wage increase of $1.14 an hour. I wonder whether they’d rather have a clap though…