The cost of Labour on business

A reader pointed out to me that if you top up all the different Labour policies, the total cost to businesses will be huge. Off memory businesses would face:

• Increase in minimum wage to $15/hour
• Increase in KiwiSaver subsidies to 7%
• Repeal of 90 day probation periods
• Imposition of national industry minimum wages and conditions
• Compulsory KiwiSaver enrolment of 730,000 extra employees

Now the impact of just one or two of these policies would be one thing, but imagine them all in combination. One has to ask, how businesses would go under, or at least have to lay people off? Are these the policies that will grow the economy as Europe totters on the brink of disaster?

I wondered why Labour have come out with its most anti-business policies in a generation, and the answer suddenly came to me.

Normally Labour fund its spending promises from the taxpayer – the normal tax and spend or borrow and spend. However in the last few months they have finally accepted that the public won’t view this as credible.

So instead they’ve decided to use businesses to fund their promises. Hence their policy to fund superannuation/savings by a 7% employer contribution. They’ve reduced the level of taxpayer contribution, and instead are sending the bill to businesses, which they see as a source of endless loot.

Off memory, we have several hundred thousand businesses in NZ. The Telecoms of the world might survive okay as they can just absorb the higher costs, but not all would.