Businesses call the hike 'sensible response' to economy
New Zealand's adult minimum wage rate will see a "modest increase" to $23.50 an hour starting in April 2025, Workplace Relations and Safety Minister Brooke van Velden announced on Tuesday.
This is a 1.5% increase from the current adult minimum wage of $23.15, and a slightly lower hike from the previous two per cent implemented this year.
The starting-out and training minimum wage rates will also be adjusted to $18.80, maintaining at 80% of the adult minimum wage.
Van Velden attributed the increase to the economy still recovering from a sustained period of high interest rates and recessionary conditions.
"In that context, delivering a modest increase in the minimum wage strikes the right balance between supporting workers and limiting further costs on business," the minister said in a statement.
According to the minister, the increase also reflects the government's progress on inflation, and aligns with the goal of reducing Jobseeker Support benefit recipients.
"To do this, we need to ensure employers and businesses can continue to grow and provide employment opportunities – which could be put at risk with a disproportionate increase in the minimum wage," she said.
The Employers and Manufacturers Association (EMA) expressed its support for the increase.
"This modest minimum wage increase is a sensible response to the state of the economy and will result in more Kiwis getting into jobs and learning the skills they need to build rewarding careers," said Alan McDonald, EMA head of advocacy, in a statement.
The announcement of the minimum wage hike next year arrived several months earlier compared to previous announcements.
The minimum wage increase this year was first announced in February 2024, just months before its implementation in April.
Van Velden said the previous short notice between the announcement and implementation only left businesses with only two months to prepare for the change.
"I am pleased to make this announcement prior to Christmas, to give employers the time needed to make any necessary changes to payroll systems," she said.
The EMA also acknowledged the effort to provide an earlier notice.
"The government's early announcement of this modest increase will give businesses time to prepare," McDonald said. "In the past we've seen sharp increases at short notice and that can be an unexpected burden for businesses, especially when they are already grappling with rising costs."
