Business advocates believe the latest minimum wage increase strikes the right balance during an economic downturn.

The minimum wage will rise 1.5 percent - or 35 cents an hour - to $23.50.

The Government says the moderate increase reflects the current economic climate and labour market. 

Employers and Manufacturers Association Advocacy Head Alan McDonald says this won't cause businesses to cut jobs - but they will be more cautious. 

"If you're thinking about hiring people - and people are still hiring people - if you can get someone for $25-$26 an hour who's done a few years in the workforce and has a proven track record - are you going on someone at $23.50 who doesn't?"

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