New Zealand PM Jacinda Ardern raises minimum wage and increases its tax on the rich to 39%

Jacinda Ardern has fulfilled her election promises by raising New Zealand’s minimum wage to $20 an hour and increasing tax on the nation’s richest to 39 per cent.

The changes came into effect on Thursday and will impact up to 175,000 of the nation’s lowest earning workers.

The Ardern Government said those working a 40-hour week on minimum wage will pocket an extra NZ$44 per week. 

Council of Trade Unions President Richard Wagstaff said it’s important Ms Ardern’s election vow of a $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, working a 40 hour week, they will have an increase of $44 a week (before tax),’ he said. 

‘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.

‘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.’

The changes also impact Kiwis who earn more than NZ$180,000 a year, which makes up around two per cent of the population.

The tax increase to 39 per cent will bring in an extra NZ$550m in revenue in 2021.  

Prime Minister Ardern said it represents ‘real and long overdue improvements to the support we provide our most vulnerable’.

‘There is still much more to do, including building more homes, improving our health system, investing in education, training and job opportunities,’ she said. 

After winning the election late last year, Mr Ardern vowed to not take New Zealanders’ support for granted.

‘And I can promise you we will be a party that governs for every New Zealander,’ she said in October.