English brushes off workers’ pay concerns

Finance Minister Bill English has brushed off a bank survey that suggests the number of workers expecting a pay rise is the lowest in at least 11 years.

Westpac’s research arm said New Zealanders had become increasingly concerned about the state of the labour market.

The number of workers expecting a pay increase over the coming year has dropped to its lowest level since the survey began in 2004.

The findings are from the Westpac McDermott Miller Employment Confidence Index, which is updated every three months.

English said the average wage had increased $10,000 since National came into office, and New Zealanders were just reacting to economic growth being a bit slower than expected, and that was flowing through into low inflation.

‘‘In the last year the average wage grew by 3.1 per cent, compared to cost-of-living increases of just 0.4 per cent. Low inflation means the dollar value of pay increases may be smaller than previously expected,’’ English said.

‘‘We are also seeing lower interest rates, which help households with a mortgage.’’

Westpac’s survey said workers were increasingly nervous about their employment prospects, with employment confidence tumbling to its lowest level since 2012.

There was concern about the prospects for pay rises, Westpac senior economist Satish Ranchhod said. ‘‘Wage inflation remained subdued for some time and the number of workers expecting a pay increase over the coming years has fallen to its lowest level since the survey began in 2004.’’

He said that was a particular concern as the recent fall in the New Zealand dollar meant prices for goods would rise.

‘‘As a result, many households may find their budgets becoming increasingly stretched over the coming year,’’ Ranchhod said.

The confidence of private sector employees was ‘‘marginally pessimistic’’. In contrast, employment confidence lifted slightly among public sector employees.