New Zealand has raised the minimum wage to $20 an hour and upped taxation on the wealthiest Kiwis after recording nil Covid-19 infections. The country has not seen any community case of Covid-19 since late February 2021.
It has only five cases in managed isolation who tested positive for Covid-19, all after arriving into the country from India through the United Arab Emirates.
The rise in wages means that the income of 175,500 New Zealanders will be increased by $44 each week.
New Zealand increase taxes on the wealthy
The new changes also impact the top two per cent of earners in New Zealand, those on salaries of over $180,000, who will now be taxed by 39 per cent.
Previously, everyone who earned over $70,000 paid a tax rate of 33%.
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This new tax increase is predicted to bring in NZ$550m to the economy in 2021.
This pay rise is also expected to boost wages across the economy by $216 million, giving New Zealanders more money to spend at local businesses, said Minister for Workplace Relations and Safety Michael Wood said.
He added that there are many Kiwis who earn the minimum wage and have gone above and beyond in the country’s fight against COVID.
“Those who helped us during the lockdown– including supermarket workers, cleaners and security guards, deserve a pay rise,” said Wood.
Following the wage and tax policy changes, New Zealand’s benefit rates have also risen by 3.1%, including student allowances.
Initial deposits for first-time homeowners have reduced from 20% of the property’s total cost to just 5%.
Prime Minister Jacinda Ardern had promised to raise the minimum wage and raise taxes on the wealthiest Kiwis.
She took a 20% pay cut in April 2020 to support those struggling financially due to the economic effects of the virus.
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