When the change was announced, Treasury said it expected 80% of the employer cost to be met by lower-than-expected pay rises. Kelly Eckhold, chief economist at Westpac, said it was likely that all else being equal, pay rises this year would be lower. “In the end, employers will pay a total level of remuneration in line with prevailing supply and demand trends in the market. “ACC charges, potentially fringe benefit tax, you’re going to have training costs, you might have uniforms … as someone who is hiring, you think about what is the total cost to me and my business. She said that until the economy clearly improved, the contribution increase was likely to mean smaller pay rises.

Source: New Zealand Herald February 19, 2026 22:57 UTC