In Australia, from July this year, about 100,000 of the lowest paid employees on Australia’s minimum wage will receive an above-inflation pay rise of 6% as part of the Fair Work Commission’s annual review. The new minimum wage will be AUD$26.44 per hour (or $1,004.90 per week for a 38-hour week). The Commission has also raised the wages of a further 2.7 million workers on the lowest award rates by 4.75%.
Award rates are legally enforceable minimum pay rates and employment conditions determined by the Australian national industrial relations system. They cover most employees and are industry or occupation specific, covering things like base wages, overtime, penalty rates, and allowances. They are updated regularly.
The Fair Work Commission said tighter monetary policy by the Reserve Bank of Australia will "undoubtedly" slow the economy in the year. The Commission said that “it would not be practicable or responsible in the current uncertain circumstances to award a real wage increase for employees," but we should ensure that “employees generally are not worse off in real terms than they were as at 1 July 2025."
In New Zealand employees aged 16 or over must be paid at least the New Zealand minimum wage. This rose on 1 April 2026 by 45 cents (or 2%) to NZ$23.95 per hour (or $958 for a 40hour week) for all adult employees. Unlike Australia, the minimum wage is set by the government, not an independent body like the Fair Work Commission in Australia.
The minimum wage effects a significant proportion of our workforce and helps to enable many of New Zealand’s most vulnerable workers support themselves and their families. MBIE figures show that there were estimated to be just over 101,000 earning the minimum wage in 2025.
In announcing New Zealand’s minimum wage rate increase for 2026 the Minister of Workplace Relations and Safety Brooke van Velden said “I am pleased to deliver this moderate increase to the minimum wage that reflects this Government’s commitment to growing the economy, boosting incomes and supporting Kiwis in jobs throughout New Zealand. 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 per cent from June 2026”.
Currently inflation based on the Consumer Price Index for New Zealand households is running at 3.1%. The Reserve Bank of New Zealand says that the CPI increased by approximately 15.5% over the three-year period from the March 2023 quarter to the March 2026 quarter. In simple terms, this means that a basket of goods and services that cost $100 in March 2023 would typically cost around $115.50 by March 2026. The primary drivers of these cumulative increases over the three years have been housing and household utilities such as rising electricity costs, local authority rates, and rent. According to MBIE figures, in comparison the adult minimum wage in New Zealand has increased by 5.51% over the past 3 years (moving from $22.70 in 2023 to $23.95 in 2026).
The Employment Court has said that the Minimum Wage Act “is a statute of fundamental importance in the sphere of employment law in New Zealand. It is a statute that is designed to impose a floor below which employers and employees cannot go. It is directed at preventing the exploitation of workers, and is a statutory recognition of the diminished bargaining power in low paid employment”.
In forming the government, the National Party campaigned on tackling the cost of living crisis. “Our plan is carefully targeted to ensure that those who will benefit the most are working New Zealanders. It’s about time they got some relief from Labour’s cost of living crisis and National will deliver that to them”, Christopher Luxon said.
In delivering the budget this year the government provided little in the way of new support for New Zealanders struggling with the cost of living. The Finance Minister, Nicola Willis, defended the “prudent” approach. She said the “Middle East conflict underscores the need for fiscal discipline”.
The Labour Party leader, Chris Hipkins, said the budget offered “no plan on cost of living” with “no support for New Zealanders who are struggling”. He said the budget would result in more job losses and “more decline and more people giving up and leaving the country”.
What is clear is that our lowest paid workers are set to continue to go backwards as the cost of living crisis continues. Where does the pay for our most vulnerable workers cross the line from a minimum level of fair pay into exploitation? Read more....