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Minimum Wage Review 2018

Wellington Chamber of Commerce and Business Central - Submission

Issue date

We support the government’s objective for the minimum wage review to “keep increasing the minimum wage over time to protect the real incomes of low-paid workers while minimising job losses”. As a prosperous and equitable country, it is good public policy to
maintain a realistic floor for wage rates that is periodically adjusted.

Given the more comprehensive nature of this year’s review, it is worth revisiting a few of the underpinning principles and key environmental factors behind 2018’s minimum wage level.

Firstly, it is worth reconsidering how the minimum wage level interacts with government policies, such as Working for Families, and with evolving case law, particularly the Idea Services “sleepover” and Woodford House cases. Working for Families comes with necessary threshold and abatement calculations which add to the complexity of someone attempting to work out their income level currently and in the event of a potential pay rise. An overall strategic goal of the tax system should be to make clearer the link between effort and reward; not introduce greater complexity which takes money away from people as they make marginal increases through pay rises.

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