Court Asks Economist’s Opinion Of Wage Claim

Press, Volume CI, Issue 29791, 6 April 1962, Page 12

Court Asks Economist’s Opinion Of Wage Claim

( N.Z. Press Association)

WELLINGTON, April 5.

The chairman of the Monetary and Economic Council, Professor F. W. Holmes, today agreed to answer in the Arbitration Court, after consideration, whether it would be prudent to raise award wage rates by general order at present. The question came from Mr Justice Tyndall while Professor Holmes was giving evidence in the hearing of the application for a general order raising rates by 10.4 per cent.

His Honour said the Court had to decide whether the step should be taken, but it could take the opinion Of an expert witness on whether it should be done.

“I don’t want to embarrass you, but what is an expert for?” Mr Justice Tyndall asked.

Professor Holmes replied that that was a fair question.

Mr P. J. Luxford, appearing for the Employers’ Federation, who had been examining the witness, pointed out that in his opening submissions he had quoted Professor H. R. Rodwell as saying on December 6 last: "This is a very inappropriate time to raise wages.” When the Court put its question to Professor Holmes Mr Luxford said he could not recall a similar question being asked previously in a general order case. The question was a question the Court had to answer, he said. “I asked Mr Fussell, the Governor of the Reserve Bank, the question and got an answer in my favour," said Mr F. P. Walsh, president of the Federation of Labour, who is appearing in support of the application

His Honour cited similar questions put to witnesses. Professor Holmes obtained permission to consider and answer later another question, which Mr Justice Tyndall said was a most important one in the case.

The question, from Mr Luxford, was whether, in relating wages to productivity increases, the comparison should be with actual wages, rather than with minimum rates. Mr Luxford said that the workers, by receiving pay above award rates and bonuses, had been rewarded already for any increase in general productivity, and he asked whether, if a general rise were awarded on the basis of minimum rates, would they not receive a double award.

His Honour said the question was important because this was the first general wage order hearing since the

Stabilisation Regulations had directed that the Court could take productivity into consideration, the regulations using the word “productivity," although the Court had previously taken productivity into account. It was important also because a major part of the Federation of Labour claim revolved round productivity. Mr Walsh wanted productivity to be related to nominal wages, said Mr Luxford.

Earlier, Mr A. P. O'Shea, who is opposing the application on behalf of the

Sheepowners’ Federation, asked Professor Holmes to define productivity. Professor Holmes replied that productivity was taken, in normal usage, to mean output per head of the labour force, but it was difficult to define. Technical efficiency, output compared with input, quality, economic efficiency, and whether the result was a satisfaction of a community demand could be taken into account.

Among economists and statisticians there was no complete agreement on a definition, he said.