Living wage puts bill on those who cannot afford it – MANZ

April 1, 2014 • Accommodation

Michael Baines

Michael Baines

The calls for a so-called living wage ignores economic reality and puts the cost on to mostly small businesses that cannot afford it, says the Motel Association of New Zealand (MANZ).

New Zealand economic growth is still fragile and many small businesses such as motels are still in recovery mode after some lean years, and not well equipped to deal with the constant cost pressure being heaped on them by local and central government, MANZ Chief Executive Michael Baines says.

“It’s fine to call for higher wages for those at the lower end of the income scale, but it’s just as important to figure out who is going to pay for it. In the past few years small businesses such as motels have been lumped with a range of cost increases, many of which are being imposed by greedy councils who see us as an easy target for revenue gathering,” Mr Baines says.

“Small businesses are being bled by an ever-increasing array of compliance costs, and for some the so-called living wage could be enough to tip them over the edge.”

With many motels owner-operated, if staff costs become unaffordable the owner in many cases will be more likely to lay off staff and do more work themselves. “There’s little point introducing a living wage if the ultimate cost of this is jobs,” Mr Baines says.

New Zealand’s economy is looking positive but many motel-owners need to retire debt accrued during the lean years, or address maintenance and upgrading which may have been deferred.

“Unlike many of our corporates, the profits made from small businesses are reinvested into our communities. Politicians should be examining ways to nurture small businesses, not pile additional costs on them,” Mr Baines says.

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  • Buhuu

    I absolutely agree with Mr Baines. My husband and I run a small bar and we already work 6 days open till close with the help of 3 part timers, who do roughly 50 hours together p/w. If the living wage is introduced we will have to lay off at least two staff and cover the other hours ourselves. AKL council increased food licences by 400%, than an increase in APRA licences, liquor licence… it’s certainly no fun being a small hospo business anymore – it’s become a real struggle

    • hebron road

      I don’t think the general public realizes, with all the aforementioned increases in costs, that the only way to ensure a living wage with the majority of small business, is for businesses to put their prices up. And I can see that being greeted with delight!! With the wide acceptance and use of daily deal sites and the bargain hungry public, there will be more businesses going under. The line between profitability and loss has just about disappeared – time to get out?

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