HDPA: Increasing the minimum wage again is the wrong move

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Recorded15 Dec 2021

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Apparently, the government is considering another hike in the minimum wage. We're told MBIE has been out consulting and now the government is considering another three-year cycle of increases, starting with the first of more than a dollar. Frankly, they need to kill this idea. I do feel for people struggling to make ends at the moment with the rising cost of living: rents have gone up in a massive way, the cost of food is up, petrol’s up. Inflation is running at an unacceptably high 5.1% and it’s only going to get worse; HYEFU figures today predict it will climb to 5.6% in the next quarter. But as much as I feel for struggling workers, I also feel for struggling businesses. They can’t afford this. They’ve already been hit with a 25% increase in the minimum wage in just 4 years. Many of them, especially in Auckland, have been kept in restrictions – and still are – to “protect” kiwis’ health. Their debt levels are high. I don’t think we – and especially the unions calling for more pay increases – truly understand yet how bad it is for businesses. Financial assistance, like the wage subsidy, means I don’t think we’ve really seen the full extent of the closures that are coming. Ultimately the rising cost of living is not business’ problem to fix. They didn’t cause this. The government and decisions out of Wellington did. Adrian Orr pumped too much printed money into the economy and drove inflation. The government is largely to blame for the rising cost of rents: by giving students an extra $50 accommodation allowance each back in 2018 and thus pushing up market rents, by slamming landlords with tax changes in March and thus pushing up market rents, and by MSD paying, in some cases, 5 times too much for rentals and pushing up market rents. This is the government's problem to fix. So, they should get creative. Shift tax brackets, give tax breaks, do whatever they can to fix their problem. Don’t shift it onto businesses.See omnystudio.com/listener for privacy information.

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