HIGHER BASIC WAGE

Press, Volume LXXXII, Issue 25061, 18 December 1946, Page 9

HIGHER BASIC WAGE

UNION REACTION IN AUSTRALIA

EFFECT ON COSTS IN INDUSTRY

[From C. R. MENTIPLAY, Special Correspondent, N.Z.P.A.] (Rec. 10.45 p.m.) SYDNEY, Dec. 17. It is now obvious that announcements of the increase of 7s in the basic wage and of the relaxation, of the wage pegging regulations are not going to have the immediate effect of smoothing out the industrial situation, Unionists are disappointed at the smallness of the increase as compared with thf l £i a week which they hoped to gain. They are not easily pacified by the reflection that the judgment of the Arbitration Court was an interim one and that the way has been pa ve d for a further increment when tbe Court concludes its hearing. For some months the more impatient among the unionists have demonstrated their dissatisfaction with the Court hearing which appears to meander on for months without making appreciable progress. Modification of the wage pegging regulations will enable wage margins to be increased by about 25 per cent., which has been assessed by Mr L. Withall, director of the Associated Chambers of Manufacturers, as about equal to the rise in the cost of living since 1939. But the 25 per cent, increase will be assessed only on margins above the basic wage and not on the full salary of the worker. General Price Level

According to the same authority, whose figures are backed by those of the Commonwealth economic adviser. Professor L. F. Giblin, the wage increase must result in a rise in the general price level of about 3 per cent. It is this factor which has halted any possible jubilation. The worker is realising that the easing of wage pegging might not necessarily mean a rise in all wage margins. Cases will be dealt with individually by the Arbitration Court with delays which although unavoidable are still irritating. Th? worker does not even receive his 7s tax free. A man receiving £5 a week and with two dependants will contribute Is 3d of his 7s in direct taxation.

Members of the public are seeing the position developing as a race between prices and wages, with wages always a lap behind. Their views are apparently confirmed by the disclosure that wage adjustments will add nearly £50,000,000 to the present wages bill of £350,000,000 —an amount which industry obviously cannot absorb without some adjustment of the price level. Taxation Problem The cost of living, according to statisticians has risen 24 per cent, since 1939, and a further increase must occur whether the Government authorises raising of prices or removes money from citizens’ pockets in another way by subsidising industry against increased costs. The problem of taxation is becoming an ever more pressing one. The Labour Government was re-elected on a platform which promised nothing, while the Opposition campaign hammered on the theme that the only way to increase real wages and promote industry was to decrease taxation. If the Opposition did nothing else it drove this theme home.

Now the slogan has been taken up strongly by unionists and even by some Labour members, who accuse the Prime Minister (Mr Chifley) of stubbornness and bigotry in refusing to adopt a course of action merely because it bears the- taint of recommendation by’the Opposition This could lead to a situation where industrial labour could initiate a movement forcing the reduction of taxes as the first necessity of peace in industry.