Govt to boost mandatory minimum wage to NZD 17.70 from April 1, 2019

New Zealand's wage growth has been relatively sluggish in recent years despite unemployment dropping to an 10-year low of 3.9 percent.

New Zealand's government on Wednesday said the mandatory minimum wage would be boosted by NZ$1.20 to NZ$17.70 an hour from April in a bid to reduce inequality.

Prime Minister Jacinda Ardern's centre-left coalition government has been steadily lifting the minimum wage towards its goal of NZ$20 an hour by 2021.

"The government is determined to improve the wellbeing and living standards of all New Zealanders as we build a productive, sustainable and inclusive economy," Minister for Workplace Relations Iain Lees-Galloway said in an emailed statement.

Some businesses have said the mininum wage hikes are putting them under pressure. Business confidence sank to a decade low earlier this year, but has since improved.

New Zealand's wage growth has been relatively sluggish in recent years despite unemployment dropping to an 10-year low of 3.9 percent.

Ardern's government came to power in October 2017 after a decade of centre-right National Party rule, promising to tackle inequality.

The latest wage increase would come into force from April 1 and would put about NZ$231 million ($158.2 million) a year extra into workers' pockets, the government said. ($1 = 1.4599 New Zealand dollars)