Labour’s living wage pledge means fewer jobs or higher taxes

Responding to Labour leader Chris Hipkins’ pledge to extend the living wage to all state sector workers, Taxpayers’ Union Policy Analyst Austin Ellingham-Banks said:

“Labour wants to pile another cost onto an already-bloated public-sector wage bill. Higher payroll costs have to be paid for through higher taxes, fewer jobs offered, or deeper cuts later."

“If Chris Hipkins wants New Zealanders to have more money in their back pocket, he should start by indexing income tax thresholds to inflation so the government stops taking a bigger cut every time wages rise. Bracket creep is already costing a Kiwi on the median wage $480.14 a year.”