Queenstown and Wanaka businesses owners concerned about impact of the minimum wage rising

Tuesday, 31 October 2017

Past and future increases in the hourly minimum wage in New Zealand.

Queenstown business owners are concerned about the effects of the rising minimum wage, but many workers think it will be 'fantastic'.

The new Government plans to increase the hourly minimum wage to $20 within four years.

The increase will occur in stages, starting in April 2018 when pay for workers on the lowest income will rise from $15.75 to $16.50.

Skyline Enterprises chairman Mark Quickfall said the changes would be positive for its workers but all Queenstown businesses would have to consider how to cover the additional cost.

Queenstown hospitality association president Drew Harmer, who also owns Sombreros Mexican Cantina.

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'It's naive for anyone to think that we operate in a bubble. If we become too expensive people will switch off.'

Hospitality worker Sarah Graham said increasing the minimum wage would be 'fantastic'.

Having previously worked in Australia and Auckland, she said Queenstown had the lowest pay and hospitality workers made money on tips rather than wages.

'But Kiwis are very clear about not tipping yet the pay is still low. It's bizarre.'

A Skyline worker, who is on a working visa and wants to remain nameless, said she was already on $16.25 per hour and her weekly income would not change drastically next year.

'A pay rise is a good thing but [only] if you raise it $3 not 30 or 70 cents. The more you earn, the higher the tax,' she said.

The median income in the Queenstown Lakes District is $35,100, according to 2013 census. On average, a single bedroom in Queenstown costs $200 to rent each week, excluding bills.

Hospitality Association Queenstown president Drew Harmer said raising the minimum wage would make a 'huge difference' to business owners.

'What we have to look at . . . is [whether] to reduce the number of hours that are available to staff.'

Harmer and his wife would pick up extra hours at their Sombreros Mexican Cantina restaurant to reduce costs.

He was also concerned that applying saving measures would dilute the customer experience.

'No-one is going to be happy if you reduce the portion size or turn off quarter of the lights in your building . . . we don't want to get there.'

Wanaka Chamber of Commerce chairman Alistair King said local businesses would face some 'pretty tough challenges'.

Business owners would have to find other ways to keep running their businesses efficiently.

'Most of the businesses are service businesses and the majority of businesses here are small. We don't have large corporates here.'

There was 'no doubt' businesses would increase prices, he said.

Some might minimise labour hours to adjust to higher wages.

'If you have t10 staff for your hospitality business, you might be going 'do I need 10?',' King said.

The minimum wage increase would be a hot topic at upcoming Chamber of Commerce meetings.

'We need to focus on how we help our members deal with it and keep the businesses thriving.'

Tightened immigration policies would also affect employment in Wanaka and 'external support and advice' would be needed, King said.

NZSki boss Paul Anderson said it was 'achievable' for his company to raise hourly pay rates to $16.50 next year.

Millbrook Resort operations director and the Tourism Industry Association's hotel sector regional representative for Queenstown Lakes, Bryan Howie, said most hotels in Queenstown and Wanaka already paid above the minimum wage.

Capping the number of immigrants coming to work in New Zealand was another concern for hoteliers, he said.