Wellington, Jan 27 NZPA - The minimum wage will go up by 25 cents an hour to $12.75, the Government announced today.

Labour Minister Kate Wilkinson said the increase was in line with the Consumer Price Index.

The training and new entrants' minimum wages will increase from $10 to $10.20

"The Government is focused on the need to find a balance between protecting jobs and ensuring a fair wage.

"We do not want to see workers priced out of the market, but we are confident that a 25c increase, in line with inflation, will not overly harm or discourage businesses from taking on new staff.

"The Government is working hard to provide the right environment for economic growth and ensuring workers can maintain the buying power of their wages is part of that," Ms Wilkinson said.

The new minimum wage rate will come into effect on April 1.

There had been pressure to increase the rate to $15 but Prime Minister John Key earlier ruled that out.

Labour MP Trevor Mallard this morning said he was putting up a member's bill seeking to increase the minimum wage to $15.

Mr Mallard said his bill sought the increase spread over two years, up to $13.75 from March and then $15 next March.

"If the bill is not drawn from the ballot by March 31 this year then I will resubmit it so that it takes effect from March 31, 2011 at the $15 rate."

Last week, the New Zealand Herald surveyed 2300 people on the issue, with the majority supporting an increase to $15 -- 3.5 percent of respondents said the minimum should be lower than the current $12.50 an hour, 30.5 percent thought it should remain unchanged, 61 percent thought it should go up and 5 percent did not have an opinion.

Mr Mallard said there were equity and productivity arguments supporting the increase.

Raising the minimum wage would assist the Government's goal of lifting productivity and closing the wage gap with Australia, he said.

Every year the Minister of Labour reviews the minimum wage, received by about 100,000 workers.

Members' bills are considered fortnightly on a Wednesday.