From April 1 next year, New Zealand’s minimum wage will rise to $23.95 per hour, a 2% increase from the current $23.50.
The starting-out and training minimum wage rates will be set at $19.16, equivalent to 80% of the adult minimum wage.
The Minister for Workplace Relations and Safety must review minimum wages annually by law, with changes taking effect on April 1 each year.
Minister Brooke van Velden said the increase aligns with the government’s commitment, under the NZ First-National coalition agreement, to moderate annual minimum wage rises.
“This new rate will benefit around 122,500 working New Zealanders and strikes a balance between keeping up with the cost of living and not adding further pressure on the costs of running businesses,” Van Velden said.
“I know those pressures have made it a tough time to do business,” she added. “Which is why we have taken this balanced approach. With responsible economic management, recovery and relief is coming.”
“The increase aims to help minimum wage workers keep up with the cost of living, with inflation projected to remain relatively stable at around 2% from June 2026.”
She added that youth unemployment and wage compression were key factors in setting the minimum wage.
“Past minimum wage increases have driven wage compression, reducing the differentiation in pay between workers based on skills, experience or performance. The moderate increases agreed to by this government for the 2024 and 2025 minimum wage decisions have started to ease this trend.”
“Ensuring a balanced minimum wage rate enables young people to have access to entry-level jobs that can set them up for greater future success.”
Meanwhile, Labour called it a “piddly” wage bump that fails to keep pace with New Zealand’s rising cost of living.
“Just like Christopher Luxon, this government’s minimum wage bump is weak and shows just how out of touch they are,” Labour workplace relations and safety spokesperson Jan Tinetti said.
“If National were serious about helping businesses, they’d get real about the rising cost of living and start investing in people and businesses. Nearly 200 Kiwis are leaving a day because jobs are disappearing and they can’t afford to live here. New Zealand cannot afford another three years of National.”
The Green Party labelled the “measly” increase as “another blow for workers” and a “sour cherry on top of a terrible year for our workers”.
“Raising the minimum wage by less than inflation is a political choice. It means, in no uncertain terms, that more people will face mounting debt and will struggle to cover the basics, let alone afford the unexpected costs of medical care, childcare, or urgent repairs,” Green Party workplace relations spokesperson Teanau Tuiono said.
Unite Union national secretary Shanna Olsen-Reeder also commented on the announcement.
“We are in a cost of living crisis, and this will mean things get harder for many working people and their families. This is a government that continuously demonstrates it does not care about cost of living pressures.”
“A 45-cent increase on April 1 demonstrates a serious disconnect between our Minister for Workplace Relations and the working public.”