Polity: Minimum wage rises do not cause unemployment

Written By: - Date published: 10:00 am, July 16th, 2014 - 48 comments
Categories: Economy, minimum wage, wages - Tags: , ,

polity_square_for_lynnReposted from Polity.

There was a fascinating review of new research into minimum wages in The Age last week, written by the Sydney Morning Herald’s business editor:

When the Fair Work Commission announced a 3 per cent increase in the national minimum wage to more than $640 a week – or almost $16.90 an hour – from last week, employers hinted it would lead to fewer people getting jobs and maybe some people losing theirs.

And to many who’ve studied economics – even many professional economists – that seems likely. If the government is pushing the minimum wage above the level that would be set by the market – the “market-clearing wage” – then employers will be less willing to employ people at that rate.

That’s because market forces set the market rate at an unskilled worker’s “marginal product” – the value to the employer of the worker’s labour.

Almost common sense, really. Except that such a conclusion is based on a host of assumptions, many of which rarely hold in the real world. And over the past 20 years, academic economists have done many empirical studies showing that’s not how minimum wages work in practice. They’ve also developed more sophisticated theories that better fit the empirical facts.

The reason the “higher minimum wages cause more unemployment” argument is so influential is that it is based on Econ101 models. Because so many of us took Econ101, they are intuitive.

The basic Econ101 (perfect competition) idea is that with heaps of available workers and heaps of firms hiring and price being the only bargaining chip and perfect information everywhere, firms will end up paying workers exactly what they are worth. If a worker demands more than that, they get fired and can’t find another job anywhere. If a firm pays less than that, all their workers quit for better jobs across town, and they cannot hire anyone else.

That, obviously, is a cartoonish fantasy world.

In the real world, it’s a bit more complicated. In most low wage sectors of the economy, firms are better equipped than workers to handle employment interruptions.1 And this has big implications for the impact of wage laws such as the minimum wage.

For example workers, who often face tight household budgets, cannot afford to go without getting paid for more than a couple of weeks. Beyond that, there are real consequences for their ability to house and feed their families. Firms, on the other hand, can often carry a temporary labour shortage without it crippling the enterprise.

This means firms are more powerful than individual workers in pay negotiations, with the result that the eventual pay rate ends up below the perfect competition equilibrium. (There are plenty of other, similar, fictions in the low-wage labour market, most of which point in the same direction – more power for the firms, less for the worker.)

This is where things get interesting:

If firms are paying workers less than their marginal value to the company, then a government demand for higher wages should not lead them to lay anybody off, so long as the new minimum wage demand is not higher than the worker’s marginal product.

The key calculation for the firm is not “do I have to pay this person more than I did last week?” It is “do I have to pay this person more than they contribute?” If a firm pays $14 an hour to people who produce $20 an hour of productivity, then raising the wage rate to $15 an hour won’t cause anyone to get the sack.

That is what the Australian research quoted in The Age / SMH has found.

Earlier this year, more than 600 US economists – including seven Nobel laureates – signed an open letter to Congress advocating a $US10.10 minimum wage. They said that, because of important developments in the academic literature, “the weight of evidence now [shows] that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers”.

The first such study, published by David Card and Alan Krueger in 1994, compared fast food employment in New Jersey and Pennsylvania after one state raise its minimum wage and the other didn’t. They did not find a significant effect on employment.

Since then, many similar US “natural experiments” have been studied and have reached similar findings. In Britain, the Low Pay Commission has commissioned more than 130 pieces of research, with the great majority finding that minimum wages boost workers’ pay but don’t harm employment.

This may appear alien to many of us, who have had “if the price goes up, the quantity demanded will fall” beaten into us since high school.

But the world is not nearly as tidy as that, allowing the community to protect the dignity of low-wage workers without costing them their livelihoods.

 

  1. For some very high wage workers, however, the opposite is true.

48 comments on “Polity: Minimum wage rises do not cause unemployment ”

  • Comments are now closed

  1. shorts 1
    16 July 2014 at 10:16 am

    the world would be a better place if we stopped listening to economists – end of story

    • One Anonymous Bloke 1.1
      16 July 2014 at 10:21 am

      Disagree, rather: their advice comes with a large confidence interval.

    • Draco T Bastard 1.2
      16 July 2014 at 11:04 am

      The big problem with economists as that they have NFI WTF the economy is focusing solely upon the the movement of money to produce a profit. This is why our economy is destroying the Earth’s environment and the economists tend to whinge about how much it’s going to cost to stop doing that.

      • One Anonymous Bloke 1.2.1
        16 July 2014 at 11:26 am

        The problem with Economists is that they tend to make wild sweeping generalisations that ignore individual circumstances and ethics.

        A bit like this comment thread.

    • Tom Jackson 1.3
      16 July 2014 at 1:18 pm

      Google the Second Best Theorem. Economics is quite reasonable. It’s just that people tend to ignore that theorem and treat marketisation as an ideal.

      • blue leopard 1.3.1
        16 July 2014 at 2:04 pm

        It is economists who have pushed ‘marketisation’ as an ideal.

        • Tom Jackson 1.3.1.1
          16 July 2014 at 2:41 pm

          No it isn’t. It’s some economists, and those people should know better.

          Economic analysis is incredibly useful in many situations. It also has limits. The Second Best Theorem expresses one of those limits (an extremely important one).

          It’s simply true that a perfectly free market would be perfectly efficient: that is a mathematical proof. But the perfectly free market premised in that proof could never exist in reality. But just because a perfectly free market is perfectly efficient, it does not follow that an almost perfectly free market is almost perfectly efficient, or that making any market freer necessarily makes it more efficient. To argue that it does is to commit a basic logical fallacy. Yet this is the fallacy that the free market maniacs commit on a regular basis.

          Sure, in some cases marketisation increases efficiency, and in others it doesn’t. We can’t establish that on the basis of abstract models – we have to do actual, empirical research. Once you accept this, economic analysis stops looking like bullshit and starts looking like part of common sense.

          • framu 1.3.1.1.1
            16 July 2014 at 3:01 pm

            i would say its MOST economists – well the ones the public hears from anyway

            “It’s simply true that a perfectly free market would be perfectly efficient:”

            theoretical or real?

            in reality thats hogwash – and to a point that anyone using it in any fashion, theoretical or otherwise should be ashamed

            • Tom Jackson 1.3.1.1.1.1
              16 July 2014 at 3:11 pm

              theoretical or real?

              This shows that you didn’t even read my post.

              Once more with feeling. Yes, it is mathematically proven that a perfectly free market is perfectly efficient. This was proven back in the 1950s. It’s an important conceptual discovery.

              But the Second Best Theorem (proven not long after) shows that you can’t apply this to the real world as an ideal to be approximated to. It’s fallacious to claim that because a perfectly free market is perfectly efficient, that increasing market freedom generally increases efficiency.

              http://en.wikipedia.org/wiki/Theory_of_the_second_best

              WTF is wrong with you? Here you have standard economics explaining to you exactly why free market fundamentalism is wrong, and not only wrong, but logically fallacious in a completely glaring way, and you won’t accept the admission.

              • Draco T Bastard …
                16 July 2014 at 5:06 pm

                I came the conclusion awhile ago that economics, as it’s taught in schools today, is nothing more than a justification for capitalism. I came to this conclusion because of the many false assumptions and logical fallacies that are taught as gospel in economics. Then throw in the simple fact that it just doesn’t work.

                A few people accumulating all the wealth must result in:

                1. A return of feudalism and
                2. An increase in poverty for the many

                Now you come along and say that the perfect free-market can’t exist and approximating it won’t result in better efficiencies. So, why isn’t that taught as economics 101? Because it obviously needs to be.

                • Tom Jackson …
                  16 July 2014 at 5:52 pm

                  I think it’s still taught to economics majors. YMMV.

                  • Draco T Bastard …
                    16 July 2014 at 6:18 pm

                    Something so critical needs to be taught right at the beginning. But I suppose saying This is the model that we’re teaching and, BTW, it doesn’t work probably wouldn’t get too many students in to pay fees.

                  • Matthew Whitehead …
                    19 July 2014 at 11:49 am

                    Yeah this is critical enough it needs to be in a 101 course, as it completely overturns the conclusions you’d come to in applying economics properly.

              • framu …
                17 July 2014 at 8:24 am

                which proves you didnt read my post – so WTF is wrong with you right back atchya 🙂

                “in reality thats hogwash – and to a point that anyone using it in any fashion, theoretical or otherwise should be ashamed”

                i accept the admission – im actually agreeing with you, sort of

                my point is that the first theory is such monumental bullshit that there shouldnt even be the second best theory to start with.

                “Yes, it is mathematically proven that a perfectly free market is perfectly efficient. ”

                i dispute this – a made up theory might have been proven using math – but thats got nothing to do with markets, people and economies does it – so why does ANY economist give it the time of day in the first place?

                its like expecting scientists to have a theory for turning lead into gold thats been proven mathmatically, but which doesnt actually work, having to use a second theory to tweak it. When they should have just thrown the first theory out the window.

                theres tons of old scientific theories that have been proven to be wrong – do we see scientists hanging on to them and insisting they are still relevant?

          • blue leopard 1.3.1.1.2
            16 July 2014 at 3:10 pm

            If you wish to posit that a discipline is sound – then that discipline needs to be invulnerable to its most extreme adherents. It would need to have solid safe-guards set up so that it is not captured by some of it’s nuttier disciples. This has not occurred with economics.

            In the last 30 years the most extreme and fairly well proven wrong theories became mainstream in economics. That is why the GFC came as such a ‘shock’. (What was that question the Queen asked again?) The GFC was actually a predictable outcome for ‘some’, however there weren’t enough of those ‘some’ to make a blind bit of difference.

            So I therefore correct you – there were some economists who were taking their discipline seriously and an entire foolish herd that led us galloping off the cliff.

            ….And as I understand it that there hasn’t been a huge shift in economic approaches since the GFC – and that was 6 years ago now – so I take it that ‘herd’ still holds sway.

            • Tom Jackson 1.3.1.1.2.1
              16 July 2014 at 3:15 pm

              If you wish to posit that a discipline is sound – then that discipline needs to be invulnerable to its most extreme adherents.

              Untrue. Almost no discipline would satisfy this criterion.

              Just because some economists let their politics get in the way of their discipline does not mean that the discipline itself is wrong or distorted.

              The only relevant question is this: does standard economic theory hold that we must marketise as much as possible in order to increase efficiency as much as possible?

              The answer is no.

              Hence, you should direct complaints to particular economists or groups of economists rather than impugning the discipline itself, which doesn’t actually claim what you think it does.

              • blue leopard …
                16 July 2014 at 3:27 pm

                I think I see where you are coming from but, no, I really disagree with what you are attempting to put forward – you appear to be omitting to acknowledge that the entire main stream expression of the discipline was taken over by nutters over the last 30 years.

                I would cite many scientific disciplines as not having had this occur.

                Economics may very sluggishly be responding to the last massive crisis but it is starting to look like it is too captured by those that stand to gain hugely by misinforming us all to come clean as quickly as we need it.

                • One Anonymous Bloke …
                  16 July 2014 at 4:37 pm

                  Yes, peer review is slow, and it’s the best thing we’ve got, and you’re forgetting the large bodies of people who are not economists with vested interests one way or t’other.

                  • blue leopard …
                    16 July 2014 at 5:06 pm

                    Yes, those vested interests who are not economists, yet who can happily cite mainstream economists because mainstream economists have been so happy to sell-out….(or so it would appear)

                    Are you saying there is a peer review system in economics OAB?
                    If so, that surprises me – that the entire lot of them went rabid all over the same time – amazing!

                    • One Anonymous Bloke …
                      16 July 2014 at 6:28 pm

                      Market fundamentalism is practiced in so many countries you can count them on one hand. Mainstream? Pfft.

                    • KJT …
                      16 July 2014 at 6:35 pm

                      Part of the problem is that “social science” is a misnomer.

                      This gives the fallacious impression that how society/economies works can be proven with the same certainty as “science”.

                    • blue leopard …
                      16 July 2014 at 6:39 pm

                      What is your point OAB?

                      Are you being sarky?

                      Or are you going to explain to me that our country didn’t just sell out half of our nationally owned power companies in the name of the greater ‘efficiency’ that partially privatizing them will provide?

                • Tom Jackson …
                  16 July 2014 at 5:54 pm

                  I would disagree with this. The public perception of economics has been taken over in this way, but economists themselves are somewhat of a boring lot.

                  It doesn’t change the fact that absent a firm refutation of the Second Best Theorem, market fundamentalism is nuts.

                  • blue leopard …
                    16 July 2014 at 6:43 pm

                    …yeah they are all so boring they fell asleep in front of the t.v. while their discipline became entirely corrupted and irrational…or what? They were too busy counting numbers to notice?

  2. Draco T Bastard 2
    16 July 2014 at 10:59 am

    For example workers, who often face tight household budgets, cannot afford to go without getting paid for more than a couple of weeks.

    Most can’t afford to go without work for more than a couple of days.

    But the world is not nearly as tidy as that, allowing the community to protect the dignity of low-wage workers without costing them their livelihoods.

    And the best way to do that would actually be a Universal Income that provides a living income. This would free up the labour market that governments and businesses keep saying they want. Of course, it would also shift the power to the workers as they’d now be able to tell the business owner to go stuff themselves if the business owners were being an arsehole.

  3. Tracey 3
    16 July 2014 at 11:05 am

    this is a great analysis of income inequality and class warfare. It is worth a watch

    http://www.youtube.com/watch?v=LfgSEwjAeno

  4. blue leopard 4
    16 July 2014 at 11:06 am

    Great post.

    The issue needs to be addressed from the other angle too:

    What is ‘viable’ about a worker being paid wages that don’t cover living costs? Such a scenario is completely unacceptable.

  5. SPC 5
    16 July 2014 at 12:01 pm

    Of course not, since the global market arrived – the price competitive jobs have already gone.

    The ones remaining are transfer cost jobs or domestic economy service sector jobs – meaning higher wage costs are transferred to business cost onto the consumer.

    The risk to these jobs comes from technology replacement or displacement of transferable service sector jobs (offshore call centres and accounting) not from a higher MW.

    The debate is not about jobs so much as between those for a higher MW and a living wage vs the middle class who object to higher tax (higher public service pay) and rates cost (higher council wages) consequences of this (or consumer cost). The middle class already enjoy the lower cost of imported goods from the loss of local working class jobs but are not used to the well being of the poor being factored into decision-making.

    • Tracey 5.1
      16 July 2014 at 12:13 pm

      There is also the casualisation of the work force to consider. Increasing numbers in casual work = no holiday pay, no sick leave, on call, no guaranteed hours or days. I know several people who have three casual jobs to try and get a full time wage. Some weeks one or more of the jobs has no work. These people arent on benefits so dont show on those stats but are strugglingon a wing and a prayer.

      • SPC 5.1.1
        16 July 2014 at 12:17 pm

        And most will still be hit with secondary tax and will be entitled to tax refunds – routinely overtaxed.

    • blue leopard 5.2
      16 July 2014 at 1:26 pm

      The middle class already enjoy the lower cost of imported goods from the loss of local working class jobs but are not used to the well being of the poor being factored into decision-making.

      True.

      This really shows how the entire theory of ‘everyone going after their own self interests works to benefit all’ is failing miserably.

      The middle class continue to object to the poor being factored into decision-making at all through the convenient propaganda coming from the elite (I guess) that it the poors’ own fault that they are poor.

      It is like noone ever played musical chairs when they were children.

      The middle class rail against any form of assistance to the poor, yet receive direct benefits from that welfare themselves.

      Those on welfare, however find it increasingly difficult to lift themselves out of the rut because unless they happen to score a well paying job they are fairly well much stuck in a poverty trap.

      ‘Well go and get an education’ we hear the middle class cry.

      It must be mentioned that it is getting harder to raise oneself out of such poverty traps by education because a majority of New Zealanders keep voting in parties that remove the ability to take up education such as this government has. And education is becoming less of a fix-all as far as gaining a job goes because more money is being made on money than productivity. Making money on productivity is less ‘viable’ as far as profits go these days. So to hell with creating jobs.

      Whilst people continue to be so receptive to faulty ideas, lies and propaganda I guess we are simply left to sit back and watch what a complete sham the whole idea of ‘everyone following their self interests is a sufficient principle to create a society that serves us all’ by witnessing the whole thing collapse with the backdrop of the cries of the ‘middle class’ fueled by the elite screeching about how hardly done by they are because they have to pay prices that allow for wages that cover workers’ living costs or pay higher taxes.

      May as well just start stocking up on popcorn for the event -be quick though – the spectacle has already begun.

      • Draco T Bastard 5.2.1
        16 July 2014 at 3:06 pm

        And education is becoming less of a fix-all as far as gaining a job goes because more money is being made on money than productivity. Making money on productivity is less ‘viable’ as far as profits go these days. So to hell with creating jobs.

        And all of that is why we had all those rules about importation before. It forced jobs to be created in new sectors as increasing productivity reduced jobs elsewhere.

        It really is possible and economic for a country to be fully self-sufficient needing only to import and export the knowledge from R&D.

        • blue leopard 5.2.1.1
          16 July 2014 at 3:16 pm

          …yeah…it really is possible if the members of our society weren’t so taken with the idea that the poor are victims of their own poor choices rather than what is really the case – that of being victims of foolish self-interested and/or short-sighted government, business, and the-most-privileged-people-in-our-societies’ choices.

  6. aerobubble 6
    16 July 2014 at 12:43 pm

    Going to the mall today. Its going to cost more to get there, as they are placed at a distance and are large places to get round. Whats more, they are glitzy places, and of course I’m paying more to go to this sparklingly new looking facade. Basically as a consumer I’m supporting the retail space owners property value, and a lot of PR firms, distributers networks etc. So of course I’m going to believe an economist who says that every extra dollar someone on minimum wage earns extra an hour isn’t going to boost retail asset prices, isn’t going to lead to more people being employed to come up and ask if I need anything, or be sucked out of my wallet electronically. No, the idea doesn’t mess with the propaganda, that we are regaled by, relentlessly, that sees the vast bulk of our spending already maintain these temples to consumerism. Please, anyone with an ounce of sense knows that power supports itself, that wealth will inevitable speak louder and drown out the poorer voices. And as we see in economics, the idea that unemployment rises if the minimum wage rises is straight out of the mouths of wealth holders rather than the retailers who want consumers with more cash to spend (as they are so good at getting us to part with it buying crap).

  7. SPC 7
    16 July 2014 at 1:53 pm

    The ability of an employer to import workers suppresses the market wage in the domestic economy – it prevents shortages increasing wage price.

    Also the inability of a worker to leave a job voluntarily and get income support means they are dependent on the availability of another job to push up the wage for the job they are in – as the economy has a RB with the prime function to suppress wage price demand by keeping a reserve of unemployed workers, this is virtually impossible.

  8. Jrobin 8
    16 July 2014 at 3:39 pm

    DTB, yes in theory. But wouldn’t everyone have to swallow a big drop in living standards? Every pragmatic politician knows this would be electoral suicide. People are too selfish to change. Isn’t this the crucial missing link in all radical solutions. Look at Capital gains as an eg. Its taken years to start to be accepted despite the damage to the economy.
    Middle Nz would never vote for such perceived radical solutions so they won’t happen. Unless you can organise a monarchy with you as head. I’m not being sarc, democracies mean change is incremental.

    • Draco T Bastard 8.1
      16 July 2014 at 5:14 pm

      But wouldn’t everyone have to swallow a big drop in living standards?

      No. I figure it would increase living standards while also increasing sustainability and using our economy better.

      Middle Nz would never vote for such perceived radical solutions so they won’t happen.

      An interesting point but middle NZ didn’t actually vote for the radical policies that we got from the 4th Labour government on wards. Before that we did try to be as close to self-sufficient as possible and we had one of the highest living standards in the world.

      • KJT 8.1.1
        16 July 2014 at 6:25 pm

        No country in history has had a successful economy, without a healthy internal economy.

        Sacrificing an entire economy for the export success of one commodity has never worked for more than the short term. A problem that many oil producing countries are well aware of.

  9. Jrobin 9
    16 July 2014 at 5:55 pm

    You mean manufacturing cars here and so forth? 1970’s do you mean? But we also paid farmers massive subsidies to keep them economic. Might work for manufacturing from wool, wood, meat, dairy, trains, some tech. But would consumers wear the increases in consumer goods. Admittedly this would be good for the planet if you could sneak it by voters, but could be a one term govt and then be reversed. I guess what you are implying is that you don’t tell them what your policies are at Elections. Is this really ethically justified? Sounds like what National are planning to do this time. They re keeping radical policies quiet so as not to frighten voters. Interesting to consider anyway.

    • KJT 9.1
      16 July 2014 at 6:19 pm

      We are still paying massive subsidies to farmers, as well as sacrificing workers wages, and the rest of the economy for them.

      • KJT 9.1.1
        16 July 2014 at 6:22 pm

        As for keeping radical polices quiet to get votes. Labour in 1984. National in 1990 and National, now.

        The problem with our revolving absolute dictatorship.
        We can change the names, but not the policies.

    • Draco T Bastard 9.2
      16 July 2014 at 6:35 pm

      1970′s do you mean?

      No, not the 1970s. Things have changed and we have learned more.

      You mean manufacturing cars here and so forth?

      We could manufacture cars here. Producing a car here doesn’t cost any more than producing it elsewhere and then shipping it here. In fact, it would use less resources because it would no longer need shipping. A factory in China really doesn’t cost any less to run than the same factory in NZ. Things is, back in the 1970s we didn’t actually manufacture cars here – we assembled them but they were manufactured elsewhere.

      But we also paid farmers massive subsidies to keep them economic.

      We didn’t pay them subsidies to keep the economic – we paid them subsidies to keep them financial. There’s a big difference. Producing more and more sheep/cows/farms here isn’t economic.

      But would consumers wear the increases in consumer goods.

      Haven’t seen anybody complaining about increases in consumer goods yet.

      I guess what you are implying is that you don’t tell them what your policies are at Elections.

      I’m a firm believer in democracy and in that I believe that the people should be consulted, costs and benefits shown and then they vote on it – we don’t leave it to the government.

  10. JonL 10
    17 July 2014 at 1:21 pm

    Michael Reich and Arindrajit Dube examined employment in several hundred pairs of adjacent counties lying on opposite sides of state borders, each with different minimum wages, and found no statistically significant increase in unemployment in the higher-minimum counties, even after four years. (Other researchers who found contrary results failed to control for counties where unemployment was already growing before the minimum wage was increased.) They also found that employee turnover was lower where the minimum was higher.

    http://www.irle.berkeley.edu/workingpapers/157-07.pdf

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    3 days ago

  • Finance Minister travels to Washington DC
    Finance Minister Nicola Willis will travel to the United States on Tuesday to attend a meeting of the Five Finance Ministers group, with counterparts from Australia, the United States, Canada, and the United Kingdom.  “I am looking forward to meeting with our Five Finance partners on how we can work ...
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    3 days ago

  • Pet bonds a win/win for renters and landlords
    The coalition Government has today announced purrfect and pawsitive changes to the Residential Tenancies Act to give tenants with pets greater choice when looking for a rental property, says Housing Minister Chris Bishop. “Pets are important members of many Kiwi families. It’s estimated that around 64 per cent of New ...
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    3 days ago

  • Long Tunnel for SH1 Wellington being considered
    State Highway 1 (SH1) through Wellington City is heavily congested at peak times and while planning continues on the duplicate Mt Victoria Tunnel and Basin Reserve project, the Government has also asked NZ Transport Agency (NZTA) to consider and provide advice on a Long Tunnel option, Transport Minister Simeon Brown ...
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    3 days ago

  • New Zealand condemns Iranian strikes
    Prime Minister Christopher Luxon and Foreign Minister Winston Peters have condemned Iran’s shocking and illegal strikes against Israel.    “These attacks are a major challenge to peace and stability in a region already under enormous pressure," Mr Luxon says.    "We are deeply concerned that miscalculation on any side could ...
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    4 days ago

  • Huge interest in Government’s infrastructure plans
    Hundreds of people in little over a week have turned out in Northland to hear Regional Development Minister Shane Jones speak about plans for boosting the regional economy through infrastructure. About 200 people from the infrastructure and associated sectors attended an event headlined by Mr Jones in Whangarei today. Last ...
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    6 days ago

  • Health Minister thanks outgoing Health New Zealand Chair
    Health Minister Dr Shane Reti has today thanked outgoing Health New Zealand – Te Whatu Ora Chair Dame Karen Poutasi for her service on the Board.   “Dame Karen tendered her resignation as Chair and as a member of the Board today,” says Dr Reti.  “I have asked her to ...
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    6 days ago

  • Roads of National Significance planning underway
    The NZ Transport Agency (NZTA) has signalled their proposed delivery approach for the Government’s 15 Roads of National Significance (RoNS), with the release of the State Highway Investment Proposal (SHIP) today, Transport Minister Simeon Brown says.  “Boosting economic growth and productivity is a key part of the Government’s plan to ...
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    6 days ago

  • Navigating an unstable global environment
    New Zealand is renewing its connections with a world facing urgent challenges by pursuing an active, energetic foreign policy, Foreign Minister Winston Peters says.   “Our country faces the most unstable global environment in decades,” Mr Peters says at the conclusion of two weeks of engagements in Egypt, Europe and the United States.    “We cannot afford to sit back in splendid ...
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    6 days ago

  • NZ welcomes Australian Governor-General
    Prime Minister Christopher Luxon has announced the Australian Governor-General, His Excellency General The Honourable David Hurley and his wife Her Excellency Mrs Linda Hurley, will make a State visit to New Zealand from Tuesday 16 April to Thursday 18 April. The visit reciprocates the State visit of former Governor-General Dame Patsy Reddy ...
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    6 days ago

  • Pseudoephedrine back on shelves for Winter
    Associate Health Minister David Seymour has announced that Medsafe has approved 11 cold and flu medicines containing pseudoephedrine. Pharmaceutical suppliers have indicated they may be able to supply the first products in June. “This is much earlier than the original expectation of medicines being available by 2025. The Government recognised ...
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    6 days ago

  • NZ and the US: an ever closer partnership
    New Zealand and the United States have recommitted to their strategic partnership in Washington DC today, pledging to work ever more closely together in support of shared values and interests, Foreign Minister Winston Peters says.    “The strategic environment that New Zealand and the United States face is considerably more ...
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    6 days ago

  • Joint US and NZ declaration
    April 11, 2024 Joint Declaration by United States Secretary of State the Honorable Antony J. Blinken and New Zealand Minister of Foreign Affairs the Right Honourable Winston Peters We met today in Washington, D.C. to recommit to the historic partnership between our two countries and the principles that underpin it—rule ...
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    6 days ago

  • NZ and US to undertake further practical Pacific cooperation
    Foreign Minister Winston Peters has announced further New Zealand cooperation with the United States in the Pacific Islands region through $16.4 million in funding for initiatives in digital connectivity and oceans and fisheries research.   “New Zealand can achieve more in the Pacific if we work together more urgently and ...
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    6 days ago

  • Government redress for Te Korowai o Wainuiārua
    The Government is continuing the bipartisan effort to restore its relationship with iwi as the Te Korowai o Wainuiārua Claims Settlement Bill passed its first reading in Parliament today, says Treaty Negotiations Minister Paul Goldsmith. “Historical grievances of Te Korowai o Wainuiārua relate to 19th century warfare, land purchased or taken ...
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    7 days ago

  • Focus on outstanding minerals permit applications
    New Zealand Petroleum and Minerals is working to resolve almost 150 outstanding minerals permit applications by the end of the financial year, enabling valuable mining activity and signalling to the sector that New Zealand is open for business, Resources Minister Shane Jones says.  “While there are no set timeframes for ...
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    7 days ago

  • Applications open for NZ-Ireland Research Call
    The New Zealand and Irish governments have today announced that applications for the 2024 New Zealand-Ireland Joint Research Call on Agriculture and Climate Change are now open. This is the third research call in the three-year Joint Research Initiative pilot launched in 2022 by the Ministry for Primary Industries and Ireland’s ...
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    1 week ago

  • Tenancy rules changes to improve rental market
    The coalition Government has today announced changes to the Residential Tenancies Act to encourage landlords back to the rental property market, says Housing Minister Chris Bishop. “The previous Government waged a war on landlords. Many landlords told us this caused them to exit the rental market altogether. It caused worse ...
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    1 week ago

  • Boosting NZ’s trade and agricultural relationship with China
    Trade and Agriculture Minister Todd McClay will visit China next week, to strengthen relationships, support Kiwi exporters and promote New Zealand businesses on the world stage. “China is one of New Zealand’s most significant trade and economic relationships and remains an important destination for New Zealand’s products, accounting for nearly 22 per cent of our good and ...
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    1 week ago

  • Freshwater farm plan systems to be improved
    The coalition Government intends to improve freshwater farm plans so that they are more cost-effective and practical for farmers, Associate Environment Minister Andrew Hoggard and Agriculture Minister Todd McClay have announced. “A fit-for-purpose freshwater farm plan system will enable farmers and growers to find the right solutions for their farm ...
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    1 week ago

  • New Fast Track Projects advisory group named
    The coalition Government has today announced the expert advisory group who will provide independent recommendations to Ministers on projects to be included in the Fast Track Approvals Bill, say RMA Reform Minister Chris Bishop and Regional Development Minister Shane Jones. “Our Fast Track Approval process will make it easier and ...
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    1 week ago

  • Pacific and Gaza focus of UN talks
    Foreign Minister Winston Peters says his official talks with the United Nations Secretary-General Antonio Guterres in New York today focused on a shared commitment to partnering with the Pacific Islands region and a common concern about the humanitarian catastrophe in Gaza.    “Small states in the Pacific rely on collective ...
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    1 week ago

  • Government honours Taranaki Maunga deal
    The Government is honouring commitments made to Taranaki iwi with the Te Pire Whakatupua mō Te Kāhui Tupua/Taranaki Maunga Collective Redress Bill passing its first reading Parliament today, Treaty Negotiations Minister Paul Goldsmith says. “This Bill addresses the commitment the Crown made to the eight iwi of Taranaki to negotiate ...
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    1 week ago

  • Enhanced partnership to reduce agricultural emissions
    The Government and four further companies are together committing an additional $18 million towards AgriZeroNZ to boost New Zealand’s efforts to reduce agricultural emissions. Agriculture Minister Todd McClay says the strength of the New Zealand economy relies on us getting effective and affordable emission reduction solutions for New Zealand. “The ...
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    1 week ago

  • 110km/h limit proposed for Kāpiti Expressway
    Transport Minister Simeon Brown has welcomed news the NZ Transport Agency (NZTA) will begin consultation this month on raising speed limits for the Kāpiti Expressway to 110km/h. “Boosting economic growth and productivity is a key part of the Government’s plan to rebuild the economy and this proposal supports that outcome ...
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    1 week ago

  • New Zealand Biosecurity Awards – Winners announced
    Two New Zealanders who’ve used their unique skills to help fight the exotic caulerpa seaweed are this year’s Biosecurity Awards Supreme Winners, says Biosecurity Minister Andrew Hoggard. “Strong biosecurity is vital and underpins the whole New Zealand economy and our native flora and fauna. These awards celebrate all those in ...
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    1 week ago

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