Wage Order P.S.A. URGES 13% RISE

Press, Volume CVIII, Issue 31628, 14 March 1968, Page 24

Wage Order P.S.A. URGES 13% RISE

(New Zealand Press Association)

WELLINGTON, March 13.

A wage increase almost double that claimed by the Federation of Labour was proposed by the Public Service Association at the second day of the general wage order hearing in Wellington today.

The F.O.L. has claimed a 7.6 per cent basic wage rise. The P.S.A. said the Arbitration Court should consider an increase of not less than 13 per cent.

The surprise move came this afternoon when the secretary of the P.S.A. (Mr D. P. Long) opened the association’s submissions supporting a general wage rise. Even the chairman of the court (Judge Blair) commented on the change in approach. The difference in assessment came from the association’s decision to include the effects of devaluation.

The president of the F.O.L. (Mr T. E. Skinner) has based the unions’ case solely on the rise of the consumer price index since the last wage order.

He has reserved the right to raise the issue of devaluation when more accurate information about its effect is known.

But Mr Long said that since June 30, 1966, the price index had risen by 8 per cent. If the estimated effect of devaluation, 5 per cent, was added wage rates would need to rise 13 per cent to cover price rises only. Figures Projected

“I know we are projecting figures by a couple of months, but we feel it is reasonable in the circumstances,” said Mr Long. “If wages are to keep pace with price increases of this order, and bring also an increase of 4 per cent in real terms on the grounds of in-

creased productivity, the overall increase needs to be about 17.5 per cent.

“However, during the eight-een-month period nominal rates have risen by only 5.9 per cent.”

Mr Long said that in the last 12 to 15 months New Zealand had been brought face to face with the harsh reality of the consequences of forgoing policies followed during the preceding five years.

He said that during what the Minister of Finance (Mr Muldoon) had termed “the prolonged period of booming internal activity” beginning in 1962, statistics showed that wage and salary earners had at no time kept pgee with rising productivity. Booming Period

This applied after allowance had been made for changes in terms of trade and adjustment had been made for changes in the consumers’ price index. They received less than their fair share during this booming period, Mr Long said.

In such circumstances it was inequitable to ask wage and salary earners to make the principal contribution to the restoration of the economy.

Although the fall in wool prices had been a factor in bringing about the present economic situation, it had not had as crucial an effect on the total overseas trading position as many wished to persuade. Mr Long said the decision to stockpile wool rather than sell it at market prices had been Intended as a benefit for woolgrowers at the expense of the country as a whole.

The Department of Statistics had already been reported as estimating the direct effect of devaluation on consumer prices as being in the vicinity of 4 per cent. Direct Effect “We note that his estimate is of the direct effect,” Mr Long said. “It is presumably based on the assumption that only those increases unavoidably consequential on devaluation will be passed on to the consumer.

“It remains to be seen whether this practice is followed by all concerned.” The Government Statistician (Mr J. V. T. Baker) told the court today it was apparent that demand and consumer spending had been “dampened down considerably” as a result of Government economic measures. Statistics showed that retail turnover was lower by 1.2 per cent in the December quarter of 1967 compared with the same period in 1966. Similar effects could be found in building permit figures and other statistics.