With the minimum wage having recently increased to $20, you might be thinking that it won’t go up again for a while. But in fact you should probably plan for the minimum wage to keep rising.
In 2000, New Zealand’s minimum wage was $7.55. Since then it has increased every year, under both National and Labour governments, sometimes by as little as 15 cents (in 2001), or by as much as $1.20 (in 2019).
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. 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 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.
Can you also cut 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. We look at your business line by line, so we can help you identify areas where you might be able to trim the fat.
Get in touch – we’re here to help.