The promised minimum wage increase by the Labour led government is "making sure New Zealanders get a fair share in prosperity" the new Finance Minister Grant Robertson said.
Minimum wage is set to increase from $15.75 currently to $16.50 in April, 2018, a rise of $0.75.
It has increased by $0.50 every year since 2013 under a National-led government.
However, the Labour-led government has announced it will increase the minimum wage to $20 per hour by 2021.
When asked if the wage increase will spike inflation and the dangers of wage pressure coming through on TVNZ's Q+A programme this morning, Grant Robertson said in the past when Labour was in government, it was able to "manage expectations at that time."
"I think if you look to history we've seen the minimum wage go up when Labour was last in government by a dollar a year and we were able to manage those expectations at that time," he said.
"This is actually about making sure New Zealanders get a fair share in prosperity and I think one of the things we saw in the election campaign and over the last three years is expecting people to raise a family on $15.75 an hour is unrealistic.
"We want to lift that and we are going to do that in a steady way and we are offering certainty...that's the advantage of the coalition agreement.
"We've given the $20 target to come into force by April 2021. People will be able to see that progression and plan for it."
The Labour-led government plans to increase the minimum wage to $20 an hour by 2021. (Source: Other)
Prime Minister-elect Jacinda Ardern defended the plan to increase the minimum wage this week, after the Employers and Manufacturers Association warned the economy will come to a "grinding halt".
"I see it as a source of stimulus," Ms Ardern told Breakfast on Wednesday.
"If you're making sure that people who are living on low wages getting extra income in their pockets, that discretionary income usually goes straight back into the economy.
"We are a low wage economy. There are people living on a minimum wage that cannot adequately live on the level of that wage."
Ardern said the point of the increase was to make sure people "can survive on it".
"I know employers want to see their employees having the ability to live on the wages they earn," she said.
She accepted small businesses may be concerned, so would be exploring the Australian model around having a stepped tax bracket, meaning lower turn overs would have a lower tax bracket.
However, Unions believe these will make a significant difference to the lives of working people.
"Low wages is a major problem in our economy in our society that's why forty percent of children living in poverty are in working families and that's just really disgusting," Jill Ovens from E Tu union said.
Some in the business community are concerned increasing minimum wages will have a negative impact.
"We do have to be mindful also that there are a large, large number of small businesses in New Zealand so there could be an impact on them.
"Whether they can access the capital to ensure they can pay those workers is going to be a challenge so we just need to keep a watch on that," Kirk Hope Chief Executive of Business New Zealand said.
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