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Workers should not face poverty, Shearer says

Published: 9:07AM Tuesday April 02, 2013

People working fulltime should not be living in poverty, Labour leader David Shearer says.

The minimum wage increased by 25 cents to $13.75 yesterday, as did the minimum contributions for KiwiSaver and student loan repayments.

Shearer said while the rises would be beneficial in helping people pay off debt faster and prepare for the future, it would increase the struggle for those in lower income brackets.

"If you have just been a student and are starting out in the workforce, you're going to be hit by the increased KiwiSaver contribution and the extra (student loan repayment)," he told TV ONE's Breakfast this morning.

Shearer said the bottom line was that the minimum wage was too low.

"If you're at $13.75 an hour, you are using all that up to live right now.

"People should not be working and living in poverty. That should be a golden rule in New Zealand."

Student loan contributions increased from 10 cents to 12 cents in every dollar yesterday, and minimum KiwiSaver contributions by employees and employers increased from 2% to 3%.

As well as highlighting the need to pay off student loans, Shearer said they needed to be better managed to ensure those studying were not "saddled" with huge debt.

"You know and I know, probably people who now regret having that wild binge or that overseas holiday that they somehow funded on their student loan."

Shearer said loans given to 18 and 19-year-olds were not being used as wisely as they should be.