'Modest' bump for minimum wage tipped
Last updated 20:26 25/01/2011

Prime Minister John Key has indicated a "modest adjustment" to the $12.75 an hour minimum wage is in the pipeline.

Speaking at a post-cabinet press conference this afternoon, Mr Key said the issue of the minimum wage was expected to be addressed by cabinet in the next few weeks.

"My guess is there is likely to be a modest adjustment, but one that reflects the economic conditions of the time."

Mr Key agreed 2 percent was a likely ballpark figure for the increase.

Last year's GST increase would not be considered in the discussions.

"That has be taken into account into a number of places, those on the minimum wage also have tax cuts as well, so we compensated in that area."

Mr Key said simply raising the minimum wage was not a long-term strategy and that there needed to be a focus on other policies as well.

"Good infrastructure, good skills, a good tax system that works, an outward facing economy, low levels of debt, and I think if you do all those things over time we will lift people off the minimum wage."

But the National Distribution Union (NDU) said 25 cents an hour - around the 2 percent mark - would do little to help workers on the minimum wage who were battling rising costs.

"An immediate increase in the minimum wage to $15 an hour would both help low income workers with rising costs and deliver a fiscal stimulus to a slow economy," said NDU general secretary Robert Reid.

Mr Reid said the NDU made a case for a minimum wage of $17.22 in a submission to the Government at the end of last year, equating to two-thirds of the average wage.

- NZPA

From here.