David Seymour has condemned renewed calls for a minimum wage increase, saying it would be "an act of economic vandalism" that would only succeed in reducing the number of jobs available to Kiwis.
The ACT Party leader made the remarks following the release of a report by the Helen Clark Foundation and the Institute of Economic Research (NZIER) on Tuesday morning.
The report made six recommendations for developing an inclusive growth agenda in New Zealand - one of which was lifting the minimum wage. It said data shows such a move can reduce inequality and boost productivity.
The last Government controversially lifted the minimum wage from $17.70 to $18.90 in April, despite the move coinciding with the start of the COVID-19 pandemic and an alert level 4 lockdown that forced the closure of thousands of Kiwi businesses.
The new Labour Government has committed to increasing it again in 2021, to $20/hour. But Seymour believes following through on that election promise would be "an act of economic vandalism".
"Basic economic theory and empirical evidence show minimum wage increases would only serve to reduce the number of jobs available," he said.
"MBIE's (the Ministry of Business, Innovation and Employment's) advice to the Government is that a living wage would reduce the number of available jobs by 30,000.
"The Treasury says a higher minimum wage won't lift productivity, overall wage levels or job creation, and will harm international competitiveness."
Seymour argues that if he's wrong - if minimum wages don't reduce the number of jobs available, and we can "legislate our way to greater prosperity" - left-wing groups should be advocating for a much higher minimum wage.
"Labour and the Helen Clark Foundation claim there's no cost to raising the minimum wage and that we can boost productivity and grow the economy by passing new laws," he said.
"If that's the case, why not advocate for a minimum wage of $50 an hour?"
National's finance spokesperson Todd McClay agrees that another increase is not the way to go, as it punishes businesses at a time when they can least afford it.
"Now is the time for the Government to reduce costs on businesses and make it easier for them to create jobs, not make it harder for them to pay their bills," he said.
"The Government is proposing to increase the minimum wage quickly, double sick leave, impose another public holiday and reintroduce 1970s-style collective bargaining at a cost or more than $2.8 billion per year."
Finance Minister Grant Robertson says minimum wage increases are always a balance.
"But clearly, every single time we've lifted the minimum wage - and indeed other Governments have lifted the minimum wage - there have been statements about job losses which have not borne out," he told reporters.
"We've supported significant lifts in the minimum wage over recent years and we do believe it acts as an important stimulus tool in the economy.
"We know that people on low incomes spend much of the income that they get and that certainly has been the evidence that we've seen."
Earlier on Tuesday, NZIER chief executive Todd Krebble told The AM Show raising the minimum wage makes sense despite the losses some may suffer as a result.
"A lot of those low-wage jobs that might have gone are gone now anyway and the other thing is, it really is an opportunity to think longer-term about how we want to re-adjust the economy," he said.
"It might be that we have some creative destructions; firms that aren't really meant to survive won't survive."
However, economist Cameron Bagrie said another minimum wage increase would be a case of the cart coming before the horse.
"You want the horse in front of the cart - get the productivity up and then you pay people more," he told The AM Show.
"The minimum wage, to me, is not the real issue. The real issue here is median wages across New Zealand - we're a low-wage economy because we're a low-productivity economy."
