A positive change for employers (and for the cost of living) is now in effect.
The Accredited Employer Work Visa (AEWV) was introduced during COVID to help approved businesses hire skilled migrants in sectors with genuine skill or labour shortages.

This visa has become a useful ongoing feature of our employment system but has required some adjustments from the new Government.
The Labour Government’s settings forced employers to pay migrants on the AEWV a minimum wage of $33.56 (officially, the median wage).

Of course, many migrants would happily come to New Zealand to work for a lower wage. However, employers were forced to pay these migrants more than many of their Kiwi colleagues earned.This created several issues.

Local workers may find it unfair that their migrant colleagues are paid higher wages. This puts employers in a difficult position, especially for businesses that are only marginally profitable.
Anecdotally, I have heard of cases where employers have pressured migrants to work additional hours “off the books” to justify their artificially high wages. It’s easy to see how this risks exploitation.

Moreover, artificially high wages increase costs for businesses, making some unviable or unable to invest in new activities that could boost productivity and employment.

I am glad to confirm that the median wage rule has now been removed for AEWV workers, meaning they are subject to the same minimum wage as Kiwi workers.
This is an ACT policy, turned coalition commitment, now made reality.

Of course, the minimum wage itself can present challenges for employment when not managed well.
Workplace Relations and Safety Minister Brooke van Velden (who is also one of my ACT caucus colleagues) has responsibility for setting the minimum wage. Politicians in her position are always faced with impassioned pleas to use the minimum wage to artificially increase incomes.
However, when businesses are forced to pay employees more than the value produced by their labour, they face a difficult choice: either cut back on minimum-wage roles or pass on costs to consumers.

New Zealanders rightly expect the Government to rein in both unemployment and the cost of living—and these are good reasons to avoid big hikes to the minimum wage, which currently sits at $23.15.

So, for the second year in a row, the Minister has resisted calls from unions to hike the minimum wage above the rate of inflation. A small 1.5% adjustment in April will increase the minimum wage to $23.50.

This shows sensitivity to the pressures on businesses, which faced years of significant minimum wage increases under the previous Labour Government.
By acknowledging the economic realities of wages, we are easing costs for employers and, ultimately, for customers.

Of course, in the long term, no amount of fretting over wage rules will deliver real prosperity for New Zealand households. Instead, we need to consider where wage growth really comes from.
Businesses can afford to pay higher wages when they are free to be productive, delivering goods and services that add value to people’s lives.

That is why ACT has been so persistent about winding back red tape and making it easier for New Zealanders to achieve their ambitions and create real wealth. -Dr Parmjeet Parmar