There are concerns the hike to minimum wage could be devastating for businesses.

The Government has announced the minimum wage will rise by $1.50 to $22.70 from April.

Business New Zealand CEO Kirk Hope told Mike Hosking the ability for businesses to pass this cost on is very low.

He says if a business has no capital left effectively to pay this, and can't increase prices because then they'll face a decrease in demand, they're in a difficult position.

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