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The Child Poverty Action Group is warning that a 50 cent increase in the minimum wage is not an effective solution for reducing poverty in New Zealand.
It says the rise is a commendable acknowledgement by the National Government of the rising costs affecting the most needy, but it falls short of being an adequate wage to sustain a family.
The group says the minimum wage needs to increase by at least 10 percent.
Economics spokesperson Associate Professor Susan St John says the rise to $15.75 an hour announced yesterday will barely cover the new year rent increase.
She says for many families with dependents, the value of the increase will be reduced through the Working for Families rate of abatement, which needs to be increased to allow people to earn more before it is clawed back in tax.
For every additional dollar earned over the earned-income threshold of $36,350, Working for Families reduces at a rate of 22.5 cents in the dollar.
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