The government will introduce the measures on Thursday, April 1, along with slight increases in unemployment and sickness benefits. The new tax rate targets 2% of New Zealand’s population
New Zealand decided to raise the minimum wage to $ 20 an hour (around 12 euros) and raised the country’s highest tax rate to 39%. As reported by The GuardianOn Thursday, April 1, the changes will be introduced, along with slight increases in unemployment and sickness benefits. The government estimates that the increase in the minimum wage – an increase of $ 1.14 an hour (€ 0.97) – will affect 175,500 workers and raise wages in the economy by $ 216 million.
The tax increase for the rich would generate an additional $ 550 million in revenue
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On the one hand, the new maximum tax rate will apply to anyone earning more than $ 180,000 per year (around € 107,000), which is equivalent to 2% of New Zealanders. The government expects an additional $ 550 million in revenue this year. OECD data shows that New Zealand’s previous minimum wage, as of 2019, was already in the top five highest in the world. Over the course of the Covid pandemic, many essential workers in the country have enjoyed it, including those who work at the airport and at border jobs, and are seen as a frontline defense against the virus.
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New Zealand continues to struggle with soaring child poverty and housing costs. Home prices in Auckland are actually among the most unaffordable in the world, and are around 11 times the average income. The National Opposition Party opposed the minimum wage increase: “Raising it sharply during a period of extreme uncertainty for small businesses is economic sabotage,” said Scott Simpson, a spokesman for workplace relations. Live updates – The private). The Ministry of Affairs, Innovation and Employment advised the government to delay the increase due to the economic uncertainty caused by Covid-19.
Ardern gradually raised the minimum wage
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The government led by Jacinda Ardern has gradually raised the minimum wage over the past four years. Last year, the prime minister made headlines to encourage employers in New Zealand to consider adopting a four-day work week and other flexible deals as a way to rebuild from Covid-19.