The Prime Minister, Chris Hipkins has recently announced the Government’s commitment to focus on the high cost of living and inflation in New Zealand. So, from 1 April 2023, the NZ minimum wage will go up to $22.70 – a 7% increase from $21.20. The Starting-Out and Training minimum wage rates will be maintained at 80% of the adult minimum wage. Continue reading below to understand how this may impact your NZ small business.
Costs are increasing
Even if you don’t employ one of the 175,000 Kiwis who earn minimum wage, this may impact your business. Wages rise steadily over time, and employees who missed out on a pay rise this year will probably expect one next, if your business has been thriving.
In addition to the rising cost of labour, inflation is forecast to put upward pressure on everyday items. And although it is no time to panic, we do expect that will likely increase your general running costs and the price of materials. Petrol prices are up, for instance, and supply chain issues have driven up the cost of many imported products.
Time to review your pricing
Is it time to put your prices up? Ideally, your NZ small business should increase costs by a tiny amount each year, rather than by a big jump every five years, for instance. Small increases help prevent price shocks for customers, and keep your business in line with the rest of the market.
Where should you be cutting costs?
If you don’t think increasing your prices is an option, or you still need to make more of a change, you may need to cut back your spending. Our experienced team of Business Advisors can look at your business line by line, and help you identify areas where you might be able to trim the fat.
Give us a call or drop us a note – we’re here to help.
Together we can achieve more.