It won’t just be a pinch and a punch for April 1, but a wave of changes affecting some Kiwis’ bank accounts will come into force as well.
The beginning of April marks the dawn of a new financial year, and with it, a “modest rise” to the minimum wage, alongside benefit and student support adjustments that could impact many households.
Changes to electricity transmission prices and student loans are also kicking in.
1News breaks down the changes and what they might mean for you.
Minimum wage
The adult minimum wage will move to $23.50 an hour — a 1.5% increase on the current rate of $23.15 an hour.
Workplace Relations and Safety Minister Brooke van Velden confirmed the changes in December last year, describing it as a “modest increase” that struck the right balance between supporting workers and limiting business costs.
Van Velden had proposed a 1% increase to $23.40 an hour, according to a Cabinet paper, while the Ministry of Business, Innovation and Employment (MBIE) recommended a 2% increase to $23.60 an hour.
The starting-out and training minimum wages will increase to $18.80, remaining at 80% of the adult rate.
The Minister for Workplace Relations and Safety is required by law to review the minimum wages annually, to take effect on April 1 each year.
Benefit increases
The Annual General Adjustment occurs yearly on April 1. On this day, some financial supports are adjusted to account for inflation or average wage growth.
Most payments from the Ministry of Social Development (MSD) will increase by around 2%, in line with the rise in the Consumer Price Index (CPI).
The coalition Government pushed through legislation last year that indexed increases to the Consumer Price Index, rather than average wage growth.
Recipients of New Zealand Superannuation and the veteran’s pension will receive a 3% increase in payments. It is slightly larger because the rise is based on the net average wage rather than CPI.
Fortnightly payments for those living alone increases to $1076.84, while those with partners will each receive $828.24.
You can access a readout of how specific benefit rates will increase on the Work and Income website here.
Student loans, allowances, interest
Student support rates – including student allowances and student loan living costs – will also increase on April 1, owing to the Annual General Adjustment.
Income and asset limits for some financial supports will go up, meaning more people could get things such as accommodation benefits, childcare assistance, disability allowance, the community services card and help with urgent and unexpected costs.
For those paying interest on their student loans, the bill is about to get bigger with an additional 1% applied to student loan interest rates, on top of the yearly recalculation.
While student loans are interest-free for people who remain in New Zealand, interest is charged when people move overseas.
This takes the base rate to 4.9%; the late payment rate to 8.9%, which is charged on overdue amounts from student loan borrowers in New Zealand and overseas; and the reduced late payment rate to 6.9%.
Borrowers will also pay slightly more in repayments after the Government froze the student loan repayment threshold, which is usually adjusted for inflation.
It’s estimated to cost around 370,000 borrowers around $1.20 a week.
Lines charges
The average Kiwi household faces an extra $10 a month to power bills as national grid operator Transpower and local lines companies increase electricity transmission charges.
The Commerce Commission limits the amount of revenue that Transpower and the lines companies can earn for a set period, with the new limits coming into force from the start of April.
Transmission charges contribute to building and maintaining the national grid, owned by Transpower, as well as building and maintaining power lines that connect the grid to your home, operated by local lines companies.
High inflation, previous interest rate increases and a greater need for investment all contributed to the required increase to charges, the commission said.
“While higher revenue limits will mean consumers pay more, maintenance and improvements to the electricity network paid for now will help keep the lights on and delaying investment would lead to even higher prices later,” read a release on the Commerce Commission website.
Some regions will face higher hikes than others – up to an average of $25 a month for some users.
Visa settings for migrant investors
In the hopes of encouraging more people to invest in the New Zealand economy, last month the Government unveiled changes to the Active Investor Plus (AIP) visa, which provides a pathway to residency for wealthy individuals willing to invest here.
Economic Growth Minister Nicola Willis said New Zealand should be “rolling out the welcome mat” to foreign investment, while Immigration Minister Erica Stanford said the changes will “turbocharge our economic growth”.
Under current law, those applying for the visa must have at least $15 million or weighted equivalent in available assets or funds.
From April 1, the current weighting system for the AIP will be replaced by two “simplified” investment categories.
The first is called the “growth category”, focusing on higher-risk investments, including direct investments in New Zealand businesses and managed funds. It will require a minimum investment of $5 million for a minimum period of three years.
The other – called the “balanced category” – will focus on mixed investments, including ones that are lower risk. These include bonds, listed equities, new property developments, existing commercial or industry property developments, philanthropy, direct investments, and managed funds. There will be a minimum investment period of $10 million over five years.
Other changes being made are the expansion of the scope of acceptable investments and the removal of possible barriers to investment, such as the English language requirement.
Pharmac funding
Pharmac will begin funding six more medicines for cancers and one more for antibiotic-resistant infections from April 1.
They include:
- Nivolumab (branded as Opdivo) and ipilimumab (branded as Yervoy) for clear cell kidney cancer that has spread;
- axitinib (branded as Inlyta) for clear cell kidney cancer that has spread and worsened after trying other medicines;
- sunitinib for kidney cancer that has spread at any point of treatment;
- inotuzumab ozogamicin (branded as Besponsa) for a type of blood cancer called acute lymphoblastic leukaemia that has come back after prior treatment;
- crizotinib (branded as Xalkori) for a type of advanced non-small cell lung cancer with an ROS1 mutation; and
- ceftazidime with avibactam (branded as Zavicefta) for antibiotic-resistant infections.
Around 180 people with cancer and 30 people with antibiotic-resistant infections are expected to benefit from the medicines in the next year.
Desogestral, a hormonal treatment for endometriosis, will also be funded.
