Trevor Mallard

The Government's miniscule lift to the minimum wage will immediately be swallowed up by rising living costs, Labour spokesperson on labour issues Trevor Mallard says.

The Government today announced the lowest possible rise to the minimum wage - up 25 cents to $12.75.

"This is miserable decision by the Government," Trevor Mallard said.

"The increase - at 2 per cent, barely keeps pace with inflation, which is also running at 2 per cent. And when you factor in planned ACC workers' levy rises it is a decrease in real terms.

"So much for catching up with Australia.

"John Key and National say they want Kiwis to earn more and that their policies will see New Zealand closing the gap with Australia.

"Well, actions speak louder than words and this action shows he is turning his back on our lowest paid.

"It also shows he is out of step with the majority of Kiwis -- two thirds of whom supported a $15 an hour minimum wage in a survey last week.

Mr Mallard said Labour would push for the minimum wage to rise to $15 over two years.

"I am drafting a members' bill which will provide that the minimum wage be raised to $13.75 per hour from 31 March, 2010 and then raised to $15 per hour on 31 March, 2011.

"If the Bill is not drawn from the ballot by 31 March this year, then I will resubmit it so that it takes effect from 31 March 2011 at the $15 rate.

Mr Mallard said there were strong equity and labour productivity arguments for increasing the minimum wage - including the spur it provides employers to boost investment in training, technology and plant.

"Recent research including a major literature review in Australia has also raised serious questions about assertions that minimum wage increases lead to job losses.

"The Government has been telling us for some time now that the recession is over.

"Raising the minimum wage to $12.75 means that for our most vulnerable workers that is certainly not the case," Mr Mallard said.