Minister Brooke van Velden considered 0% minimum wage increase, documents reveal
Tuesday, 17 March 2026
Workplace Relations Minister Brooke van Velden considered a minimum wage freeze for 2026, newly released documents reveal.
The Government eventually announced a 2% minimum wage hike, to $23.95 an hour, coming into effect on April 1.
But draft Cabinet papers released under the Official Information Act show van Velden presented ministerial colleagues with options ranging from no increase to 2%.
Seven drafts of the Cabinet paper were released, showing the options on the table shifted across versions.
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Early drafts included 0% as one of five options - alongside increases of 0.5%, 1%, 1.5% and 2%. The 0% was included in a draft that went out for further ministerial consultation, but was then dropped. Officials at the Ministry of Business Innovation and Employment considered a range that went up to 3%.
The coalition agreement between National and New Zealand First commits the Government to “moderate increases to the minimum wage every year”.
Van Velden said the range of options reflected economic conditions at the time.
'Given the high unemployment and youth unemployment rates at the time, I presented my colleagues with a range of options to consider. I decided to consult with my coalition partners before refining the range of options and landing on a recommended option, and the final paper reflects that,“ van Velden said.
'A moderate increase of 2% was considered the best response to balance the impact of inflation on workers earning the minimum wage while minimising impacts on business and adverse impacts on disadvantaged groups in the labour market.'
The Cabinet paper noted that official forecasts at the time projected inflation would ease to between 2% and 2.5% in the first half of 2026. Officials recommended the 2% increase eventually selected.
Officials suggested that even a rise of up to 3% was “unlikely to result in any significant restraint on employment” ‒ but did caution that the higher the rate change was, the more people would be negatively impacted through lower employment.
The Reserve Bank’s survey of expectations in February 2026 found a projected increase of between 2.4% and 2.6%. This was prior to the Iran War.
The Cabinet paper also noted that New Zealand had a relatively high minimum wage when compared with the median wage across the workforce ‒ with the minimum wage about 69% of the median wage, the fifth highest out of 29 countries in an OECD survey.
Green Party workplace relations spokesperson Teanau Tuiono said even considering a freeze was considered was an insult to low-paid workers.
'Brooke van Velden looked at the lowest-paid workers in this country and considered giving them absolutely nothing, while the cost of everything around them kept going up. Considering a 0% increase of the minimum wage is a slap in the face to workers who are already struggling to get by,' he said.
“Even the 2% increase that Cabinet settled on barely kept pace with rising prices. For the 122,500 workers directly affected — the people who stock our shelves, clean our offices, and keep essential services running — their pay is going backwards.'
Minimum wage increases: 2020-2026
2020: $18.90 (+$0.90, +5.0%)
2021: $20.00 (+$1.10, +5.8%)
2022: $21.20 (+$1.20, +6.0%)
2023: $22.70 (+$1.50, +7.1%)
2024: $23.15 (+$0.45, +2.0%)
2025: $23.50 (+$0.35, +1.5%)
2026: $23.95 (+$0.45, +2.0%)