Pancha Narayanan, president of Multicultural New Zealand (MNZ), spoke at Parliament’s Multicultural Day celebrations last week, advocating for two new public holidays. He proposes that we create national days that allow Kiwis to celebrate Aotearoa’s multicultural identity. But while the cultural benefits of such a proposal are clear, the economic implications of more public holidays have raised concerns in the business community.
Multicultural New Zealand’s Proposal
Narayanan proposes two new holidays: National Multicultural Day and Cultural Day. The first would be an official public holiday based on the existing Multicultural Day celebrated by MNZ, which falls on the last Friday of August each year. On this day, New Zealanders would be encouraged to showcase their cultural heritage through traditional clothing, food, and language—particularly in schools and workplaces.
The second holiday, Cultural Day, would be more flexible. It would allow people to take a day off to celebrate a culturally significant occasion of their choice, such as Diwali, Lunar New Year, or Eid al-Fitr. Narayanan envisions this day being built into employment contracts, giving individuals the freedom to celebrate their own cultural traditions.
Narayanan sees these holidays as an important step toward recognising the reality of New Zealand’s multicultural identity. “We are a multicultural society,” he said, believing that these additional holidays would help us celebrate that fact. Such recognition would help ethnic communities thrive and create a stronger, more inclusive national identity, he argues.
Some Government Support but Legislative Hurdles
The proposal has found some support in government circles. Melissa Lee, Minister for Ethnic Communities, has acknowledged the importance of cultural celebrations in fostering social cohesion. “There is immense value in the many cultural celebrations already being held around New Zealand throughout the year,” she noted, adding that cultural events “help to grow social cohesion in New Zealand” which is “already very multicultural, with more than 160 ethnicities represented in New Zealand.”
However, Lee also pointed out that any changes to the Holidays Act, which governs the country’s public holidays, would need to go through the appropriate democratic processes, such as a parliamentary petition.
Can New Zealand Afford More Holidays?
While the cultural rationale for introducing new public holidays is strong, the economic impact has become a key sticking point. SMEs, in particular, are wary of the costs associated with additional public holidays. The introduction of Matariki as a public holiday in 2022 provides a recent example of the financial burden such holidays can place on businesses.
According to the Ministry of Business, Innovation and Employment (MBIE), Matariki is estimated to cost New Zealand businesses between NZ$377 million and NZ$448 million annually. This figure has raised concerns among employers, particularly in industries like retail and hospitality, where staffing costs on public holidays are already high.
ACT Party Leader David Seymour was one of the most vocal critics of the added public holiday in 2021, when Labour prosed the Matariki holiday. He described the additional holiday as “reckless”, suggesting that Matariki could have been swapped for an existing holiday to mitigate the impact. Critics of MNZ’s proposal are similarly arguing that the new cultural days should not be added to our holiday calender, but should replace existing stat days.
Small Business Concerns
For many small businesses, the introduction of additional public holidays will create not just an increase in wage costs, but could also impact productivity. Asantha Wijeyeratne, CEO of PaySauce, which provides payroll services to New Zealand businesses, highlighted the challenges employers face when dealing with the country’s complex holiday pay regulations.
Under the Holidays Act 2003, employers must calculate holiday pay based on either an employee’s average earnings over the past 52 weeks or their earnings over the last four weeks, whichever is higher. “There’s a whole checklist of things. You need to be a rocket scientist to work it out,” Wijeyeratne said.
For businesses that rely on staying open during public holidays, such as those in the tourism and hospitality sectors, the impact is more nuanced. Chris Roberts, CEO of Tourism Industry Aotearoa (TIA), acknowledged that long weekends can boost business for some operators. “New Zealand’s existing public holidays are an incredibly important part of domestic tourism, which is all we have while borders remain closed to international visitors,” he said. “Our tourism operators report that their takings can be 200% to 300% higher when we have a long weekend.” However, for other businesses that close on public holidays, the day off can result in lost productivity without the benefit of increased consumer spending.
A Double-Edged Sword?
The debate over the economic impact of public holidays is not unique to New Zealand. Around the world, there are differing views on whether public holidays help or hinder economic growth. Some argue that additional holidays can boost consumer spending, particularly in sectors like retail and tourism. A report by the Centre for Economics and Business Research in the UK found that a bank holiday in October could add £500 million (NZ$621 million) to the British economy, largely through increased spending in leisure, hospitality, and retail.
However, critics of public holidays argue that the loss of productivity often outweighs the benefits of increased spending. A study by PwC in Australia estimated that adding a public holiday in the state of Victoria resulted in a net economic loss of A$150 million (NZ$162 million), even after accounting for increased consumer spending.
So, Will We Have Two New Public Holidays?
Not in the foreseeable future. The proposal remains in its early stages, with further public consultation and parliamentary discussion required before any changes to the Holidays Act can be made.