Reflecting on the current government’s track record on employment matters over the past term, it appears that the “tail has truly wagged the dog”. The ACT Party has decimated long established employment laws that have been largely been settled and agreed to for many years by both the two main parties, the National Party and the Labour Party.

National came to power on a platform of Blame, Blame, Blame and tiny tax cuts that are costing $14.6 billion over four years. “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”, Mr Luxon said.

The following budget, the government clawed back some of these tax cut costs with its retrograde steps to addressing pay equity issues that had previously been agreed to between the Labour Party and the National Party. The cost to addressing those inequities was significant. The previous budget had allocated some $17 billion over four years, suggesting that in the government funded sector the costs of settling pay equity claims could be considerable.  The Prime Minister has admitted that those changes to pay equity laws are going to save the government “billions of dollars”, he now says that this was not the motivation for changing the legislation. David Seymour, the Deputy Prime Minister, was more forthright at the time - "I actually think that Brooke van Velden has saved the taxpayer billions”.

The ACT party has put the minimum wage firmly on the election agenda with a proposal to freeze the adult minimum wage at $23.95 an hour for three years and introduce a new training wage for workers under 20 at 60 per cent of the adult rate for their first 12 months with an employer. At today’s rate, that would be $14.37 an hour.

The proposal is based on ACT’s argument that mandated wage increases have outpaced productivity and that lower employment costs will encourage businesses to employ more people, particularly young people. The party says higher wages ultimately depend upon businesses becoming more productive and profitable.

There is an obvious counterargument. The minimum wage is intended to establish a floor below which employees cannot be paid. As the Employment Court has previously observed, the Minimum Wage Act is of fundamental importance because it is directed at preventing exploitation and recognises the diminished bargaining power of those in low-paid employment. What ACT is proposing most effects those minimum wage earners working multiple, often part-time jobs, to just pay their bills, to feed their families, to pay the rent. For ACT there would no longer be a “fair days pay for a fair days work”.

The current adult minimum wage of $23.95 was introduced in April this year, an increase of 45 cents an hour. The government's own policy analysis acknowledged the difficult balance between protecting the incomes of low-paid workers and minimising possible employment effects. That balance is lost when inflation is considered. The minimum wage has increased by about 5.5 per cent since 2023, while consumer prices increased by 15.5 per cent over the three years to March 2026. Since then, annual inflation has risen further, reaching 4.1 per cent in the June 2026 quarter.

A three-year freeze on the minimum wage the way inflation and prices continue to rise would increase the negative impact inflation has on those minimum wage workers. If prices continue to rise, the real value of the minimum wage will continue to fall. ACT's argument is that the trade-off may be greater employment opportunities, particularly for people currently struggling to get into the labour market. Under this government the unemployment rate has climbed to 5.6% in the three months to June — the highest in 11 years since September 2015.

While the ACT Party is only a minor party sitting on the so-called “right” wing of politics it certainly has not been a minor party in this government on employment matters. The CEO/Poobah of the National Party, Prime Minister Christopher Luxon, has not been very effective in negotiating and constraining the ACT Party on numerous contentious and divisive issues; employment law and treaty issues spring to mind. Should this current government be re-elected the cost of living appears set to be even more unmanageable for our most vulnerable workers on the minimum wage (or those close to it).

Employment rights may often be human rights. They are always human rights in a literal sense. There is a human involved, often with a family or dependents that may be reliant on them. Or the human is reliant on that worker for their support, providing them with the basics - a home, with food, hopefully affordable health care and an education. Those basics seem likely to become even more unaffordable if ACT has its way. As Nelson Mandela said "A nation should not be judged by how it treats its highest citizens, but its lowest ones." Read more...