All change for minimum wages, EV charges, mortgage interest and more

A raft of new rules, tax requirements and benefit allowances came into force on April 1.

Mōrena, and welcome to The Bulletin for Tuesday, April 2, written by Catherine McGregor.

In today’s edition: High Easter road toll an ‘utter disappointment’ to police; Government announces new 36-point action plan; Waikato measles scare a false alarm. But first, thanks to the public holiday, we’re a day late covering all the changes that came in on April 1. Here’s what you may have missed.

Minimum wage up, but not by much

Of all the changes that came into effect on Monday, the minimum wage increase may be the most controversial. The minimum wage rose from $22.70 to $23.15. That’s a 2% increase, exactly half what the Ministry of  Business, Innovation and Employment recommended in its annual review. Workplace relations minister Brooke van Velden says the lower rate will “give our lowest paid workers more money in their pockets, without hindering job growth or imposing unreasonable costs on businesses.” This year’s smaller increase is a rebalancing after years of overly generous rises under the Labour government, she says. Including this year’s rise, the minimum wage has increased 44% since 2018 – around 18 percentage points more than the consumer price index (CPI) for the lowest-income quintile increased during that time, according to Infometrics economist Gareth Kiernan. 

Low wage earners going backwards, says Labour

The message from Labour is that the “measly” increase to the minimum wage will send lower-paid workers backwards in real terms. The party’s statement on the subject echoed a tweet thread by CTU economist Craig Renney arguing that the income of a minimum wage worker on full-time hours will fall behind the rate of inflation, even accounting for National’s proposed tax cuts. “They are still $12.15 a week worse off – or $632 a year. And that’s before the loss of things like low-cost public transport or free prescriptions.” Benefits including jobseeker allowance, family tax credit, Best Start tax credit, student allowance and NZ Super all increase as well this week. The change to how main benefits are calculated – from indexed to average wage growth under Labour, to indexed to the CPI now – has been criticised by those on the left who say it’ll leave beneficiaries worse off in the long run. Social development and employment minister Louise Upston defended the move on Q+A, saying the CPI is “directly linked to the real costs that [beneficiaries] face”.

More April 1 changes

A number of other changes came into effect on April 1. With the start of the new tax year, residential property investors will be able to claim 80% of their mortgage interest expenses. While it’s good news for landlords, CoreLogic economist Kelvin Davidson tells RNZ the best tenants can realistically hope for is slower growth in rents. "Maybe some landlords might pass through cost savings to tenants, but there's just bigger forces at work," he says. "The research says rents are driven more by supply and demand, and by tenants' wages, than they are landlords' costs." Other changes coming into effect this week are the so-called “app tax” which requires service providers on apps such as Airbnb and Uber to pay GST on all income, pharmacists being permitted to administer vaccines to children under five, and EV users now being obliged to pay road user charges.

How Australia looks after low-wage earners

In Australia, the minimum wage is currently A$23.23, with a new, yet-to-be-determined rate coming into effect on July 1. While the federal government recommends changes to the minimum wage, the rate itself is set by the Fair Work Commission, Australia’s national workplace tribunal. The Labor government is recommending the commission increase the minimum wage in line with inflation – which is around 4%, or an extra A$36 a week before tax. Over the weekend, Stuff’s Federico Magrin reported on another reason for low-wage-earning New Zealanders to eye a move across the ditch: penalty rates. These were scrapped in NZ in the years following 1991’s Employment Contracts Act, but in Australia they’re alive and well. Under most workplace agreements, Saturday workers still earn time-and-a-half, while those who work on Sunday must be paid double time. 

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High Easter road toll an ‘utter disappointment’ to police

The road toll for the four-day holiday weekend is seven, the worst Easter total since 2021. The most deadly crash this year was between two vehicles and a motorcycle on State Highway 8 near Lake Pūkaki. Three people died at the scene and a fourth died in hospital on Sunday night. Two of those killed were Malaysian students at the University of Canterbury. The long weekend was remarkable also for the number of crashes involving tractors, all of which occurred on central North Island roads. On Saturday there were three serious tractor crashes, including one fatality. Road policing director Superintendent Steve Greally told Newshub police’s reaction to the Easter weekend road toll was “one of utter disappointment”. Road safety campaigner Clive Matthew-Wilson says unsafe road design is turning too many driver slip-ups into potential tragedies. "Roundabouts, median barriers, roadside fencing could be stopping at least half the accidents on our highways," he said.   

Government announces new 36-point action plan

New month, new tax year, new action plan. PM Chris Luxon has unveiled a fresh government agenda, modelled on the post-election 100 day plan. This one runs to 36 “action points” and has a completion target of end of June. The plan includes restoring the Three Strikes law, reforming the Holiday Act, establishing a $1.2 billion regional infrastructure fund, and establishing youth boot camps, or “military academies”, for persistent young offenders. “A lot of the targets will be really hard,” Luxon tells the Herald’s Derek Cheng. “The point is they should be driving a discussion or debate as to why we can’t make sufficient progress towards them.” The list encompasses “restoring law and order” and delivering better public services, but the centrepiece is the upcoming May budget. Number one and two on the list are “Deliver a budget that reduces wasteful spending while investing in front-line services like health, education and police” and “Legislate for personal income tax relief.”

How do we get over the electrification tipping point?

The evidence is clear: it's good for our pockets and for the planet. So what's stopping families and businesses from going electric? How do we address the electrification knowledge gap and other barriers that stand in the way of adopting cleaner, more affordable energy both as individuals and organisations? In the latest episode of When the Facts Change, Bernard Hickey talks to Rewiring Aotearoa CEO Mike Casey about their recent report 'Electric Homes', and how NZ is one of the first countries to reach the "electrification tipping point".

Click and Collect

• Two Waikato children who were thought to have measles are not infected, further tests have shown. The updated results mean there are no known measles cases in the community.

• Foreign affairs minister Winston Peters, who is currently on a weeklong tour of Cairo, Warsaw, Brussels and Stockholm, has announced $6 million in humanitarian aid for Gaza and Sudan.

• The government is working on a visa to attract digital nomads to NZ, though it is “not an immediate priority”.

• Microbreweries and boutique distilleries won’t be included in a proposed new law that would allow small wineries without on-licences to charge for tastings.

• David Seymour’s “McMilford Sound in partnership with McDonalds”, and some other local April Fool’s hoaxes you might have missed.

Feeling clever? Click here to play 1Q, Aotearoa’s newest, shortest daily quiz.

Right now on The Spinoff

Rachel Judkins meets some of the growing number of young men who are getting vasectomies. Gabi Lardies investigates the sanitary pad saga that's dividing the online art community. Alex Casey presents The Spinoff’s unofficial celebrity eating tour of Aotearoa. Gurleen Minhas shares some thoughts on her queer and Sikh identities, and how they mesh and collide. James Mustapic takes us through his life in television, including trying to find his mum a man. Alex Casey attends Rachel Hunter’s mysterious spirituality event in Christchurch.

Sporting snippets

• Wellington Phoenix captain Alex Rufer gets a one-game ban for serious foul play after being sent off late in Sunday’s game over Brisbane Roar.

• Separating fact from fiction on those Sam Whitelock All Blacks rumours.

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