Prime Minister, Chris Hipkins, has announced a suite of programmes he says will be cancelled or delayed to allow the Government to focus on easing cost-of-living pressure.
“The Government is refocusing its priorities to put the cost of living front and centre of our new direction,” Mr Hipkins said.
“I said the Government is doing too much too fast, and that we need to focus on the cost of living. Today we deliver on that commitment.”
The Prime Minister said progress on the TVNZ-RNZ public media entity will stop entirely.
Support for public media needs to be at a lower cost and without such significant structural change, he said.
“Cabinet has agreed to provide Radio New Zealand with additional funding to strengthen its public media role. New Zealand on Air will also receive additional funding to support public media content and that funding will be available to a wider range of broadcasters. Remaining funding will be redirected to other Government priorities.”
The social insurance scheme is off the table and will not proceed as proposed, the Prime Minister said.
“We will need to see a significant improvement in economic conditions before anything is advanced,” he said.
“Work will continue to explore ways to best address these inequities in the long term when the economy is better placed to make change. But it is off the table for now.”
The Human Rights (Incitement on Ground of Religious Belief) Amendment Bill will be withdrawn and the matter referred to the Law Commission. This will allow the Law Commission the opportunity to consider a difficult and highly contested area of law in totality, said Mr Hipkins.
“Cabinet also agreed that the biofuels mandate will not proceed. The mandate would have increased the price of fuel, and given the pressure on households that’s not something I’m prepared to do.”
“Cabinet considered the 3 Waters programme. The need for reform is unquestionable. The events in Auckland have once again demonstrated the limits of our existing infrastructure and the need for change. But careful consideration is required.
“This is the first and most significant set of decisions that reprioritises the Government agenda and sets out our new direction. It will help to provide greater bandwidth and resource for where focus is needed most – the cost of living.
“When I became leader I promised that the Government would do more to help families with the cost of living. With this in mind, Cabinet today also set a new minimum wage in line with CPI.”
Cabinet has agreed to lift the minimum wage by $1.50 – to $22.70 per hour. It will apply from 1 April, 2023. The Starting-Out and Training minimum wage rates will be maintained at 80% of the adult minimum wage, the PM confirmed.
“In tough times, it’s critical to support those who struggle the most to make ends meet. Those on low incomes make impossible trade-offs between food and medical care, dry homes and a pair of shoes. These families need our support now more than ever and an inflation-adjusted lift in the minimum wage will means thousands of New Zealanders do not go backwards,” he said.
“We’ve tried to find the right balance. Analysis from MBIE that fed into our decision suggests this increase is unlikely to have a significant impact on unemployment, because it is broadly in line with existing average wage growth across the economy.
“The impact on inflation is negligible. In the 2022 Review, MBIE estimates that an increase of 7 per cent in the minimum wage will have only a minor inflationary impact of 0.1% on the wages portion of GDP.
“These decisions are a start and show the new direction of our Government. Increased support for business, increased support for those on low incomes and a reprioritisation of our work programme to shift it to the bread and butter issues New Zealanders want us focused on,” Mr Hipkins said.