ACT proposes minimum wage freeze and $14.37 training wage for under-20s

ACT would freeze the adult minimum wage at $23.95 an hour for three years and bring in a $14.37 training wage for workers aged under 20.

The proposal

The freeze sits inside ACT's small business policy package to clear red tape, according to the release ACT. The package says yearly increases set by the Government have grown faster than productivity — output per hour worked.

ACT has also said a freeze would give employers certainty and allow productivity to catch up with past increases.

The rates

The $14.37 training wage would apply to workers under 20 for the first 12 months with any employer, as reported by RNZ.

That compares with a current adult minimum wage of $23.95 and a current starting-out wage of $19.16. The training rate would sit below both.

Council of Trade Unions president Sandra Grey criticised the plan. She said paying young people $14.37 an hour is "unconscionable" and "nowhere near enough to live on".

The CTU said the three-year freeze would leave a full-time minimum wage worker $3,877 worse off, according to its analysis CTU. It also said the minimum wage is already 20 percent below the Living Wage.

What to watch

The broader context here is how the policy is packaged. ACT has not presented the freeze as a standalone wage decision. It is inside a small business compliance offer. For Beehive watchers, that matters. It signals the intended audience is employers rather than low-wage workers, and the parliamentary debate will likely run on that split.

Looking at what this means for the politics of the proposal, the two rates will be contested separately. The freeze speaks to certainty for employers. The training wage speaks to youth employment. Opponents will link them. Supporters will separate them. Grey's language already does the former, tying the youth rate to liveability and the freeze to an annual loss for full-time workers.

In my view, the friction point to watch is the 12-month, any-employer element. A training wage tied to time with any employer works differently from a rate tied to age alone or to time in the workforce. Who counts as in training, how a change of employer resets or does not reset the clock, and how enforcement tells the new rate apart from the starting-out wage will decide how the proposal works in practice.

Looking beyond the release, small business policy also tends to test party discipline. Business groups weigh compliance costs. Unions weigh household costs. Ministers weigh advice and Cabinet process. A policy release sets out the offer: hold the adult minimum wage, add a lower youth training rate, and argue productivity must catch up.