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New Zealand Raises Minimum Wage And Increases Tax On The Rich

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New Zealand Raises Minimum Wage And Increases Tax On The Rich

New Zealand is raising its minimum wage to NZ $20 (£10.17) an hour and setting a 39 percent tax rate for its highest earners.

The new rules will come in on Thursday (1 April), with government estimates suggesting the minimum wage increase will affect up to 175,500 workers, and increase wages across the economy by NZ $216m (£64,083,696).

Credit: PA
Credit: PA

The government says it will mean around NZ $44 (£22.38) per week for people working a 40-hour week on minimum wage.

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New Zealand was already in the top five countries with the highest minimum wage.

The Council of Trade Unions welcomed the increase, with CTU 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).

"We know that thousands of working people do not earn enough to provide for a comfortable life for them and their whanau [extended family]. They are the working poor; struggling to meet the costs of basics like food and housing.

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Credit: PA
Credit: PA

"Increasing the minimum wage has a real and meaningful impact on these people's lives, but these people will still be living on the bread line.

"Covid showed us all just how crucial many jobs are to the functioning of our society, jobs in health, cleaning, on our border or supermarkets. Many of these crucial roles are poorly paid.

"It's time we valued those being paid the minimum wage more, and this increase is one way of doing just that."

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Meanwhile, the country has also introduced a 39 percent top tax rate that will affect anyone earning more than NZ $180,000 (£91,000) a year - or around two percent of the population.

Credit: PA
Credit: PA

The government estimates this increase in tax will bring in NZ $550m (£279m) in revenue this year.

Announcing the changes, Prime Minister Jacinda Ardern said she had fulfilled a pre-election promise to represent 'real and long overdue improvements to the support we provide our most vulnerable'.

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She added: "There is still much more to do, including building more homes, improving our health system, investing in education, training and job opportunities."

Featured Image Credit: PA

Topics: New Zealand, Politics

Claire Reid
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