More Going Into Debt, Wage Hearing Told

Press, Volume CX, Issue 32386, 27 August 1970, Page 26

More Going Into Debt, Wage Hearing Told

(New Zealand Press Association) WELLINGTON, August 26. People were buying fewer goods, and in order to do so were having to go increasingly into debt, the Public Service Association submitted today to the Court of Arbitration hearing on the application for a general wage order.

Presenting the submissions, the general secretary of the association (Mr D. P. Long) cited the Government Statistician’s figures showing that the retail trade turnover per head in the quarter ended March, 1970, was well short of 1965 and 1966 figures, while there was a very marked increase in goods sold on hire purchase. ' <

“The inference to be drawn from these fig* ures is that people are buying fewer goods and, in order to do so, are having to go increasingly into debt,” he said.

Mr Long said that one of the key factors which must be taken into account by the Court was a colossal increase

in wealth, shown by a 50 per cent increase since March, 1968, in the all-groups index of share prices, and a 31250 m rise in the value of shares in all New Zealand companies. This brought to a smaller group of persons an amount more than half of the total wages and salaries paid to all wages and salary earners in New Zealand in one year—s23o4m in 1968-69. Referring to statistics showing a decline in farm incomes Mr Long said it was necessary to bear in mind that farmers’ incomes were arrived at for tax purposes after allowing deductions which, in effect, allowed capital expenditure as an expense.

“The amount of direct and Indirect State support for farming incomes is difficult to arrive at, and this needs to be borne in mind when farmers’ incomes are being considered,” he said. Farm Incomes “We note that farm incomes are expected to increase by 10 per cent this year.” He quoted official indexes of production, employment, and productivity since 1957. Despite static productivity for almost two years (1967 and 1968), the wage and salary earner on ruling rates, inclusive of overtime, had in real terms fallen substantially behind the level he should have maintained, if he was to receive even his previous share of the increased productivity after making allowance for the down-turn in terms of trade. “How much worse must the wage earner on or near award rates have fared since the increase in his real wages in the period will have fallen far short of the increase of 14.7 per cent in the real value of average payout (including overtime), and so much further behind the real increase of 21.7 per cent he would have needed to bring a proportional share of increased productivity,” Mr Long said.

Quoting overseas trade figures, he said it seemed clear that New Zealand was increasing its export earnings at a rapid pace and in a way which was, or should be, add-

ing substantially to the standard of living. “There is still the question of the European Economic Community, but the Court, having had this bogey paraded for the last .decade, will view it with some reserve and offset any concern by oft-repeated assurlances we have had from Mr and by the indications of a future large-scale market in Japan.” Mr Long said the timber industry was one of the industries expected to grow rapidly in New Zealand. Export receipts for timber had risen 50 per cent between 1968 and 1970. New Zealand'had a number of resources which could be expected to make increasing contributions to exports. Significant Rise In recent months the nominal weekly wage index had risen significantly. A factor in this bad undoubtedly been an increased number of awards being negotiated with the intention of bringing award rates up to ruling rates or closer to ruling rate levels.

It was true that some people on award rates would have received comparable increases, but these would in large part be confined to those on or near award rates. With some possible exceptions, it was probable that these increases would not have been negotiated on this

- basis if they had been applicable to actual or ruling rates, i “Until this development the : nominal weekly wage index , was considered a reasonable ' indicator of the movement of : rates of those on minimum i rates of remuneration,” he said. “Its usefulness as a continuing index of those on lowest rates is now questionable. “The nominal index would now include the ruling or near-ruling rates of a number of workers, and would cover a much greater range than previously. The inclusion of the new rates means that the nominal index can no longer be claimed to measure the position of those on lowest rates of remuneration. “We submit that the nominal index is no longer reliable as a constant index on the basis ireviously adopted. This indicates the need for a new approach by the Court—an approach based on justice, equity, and industrial harmony, the main elements in the new act” In spite of the increases in recent months in the nominal wage index, the pattern shown by the effective index was still the familiar one—persons on or near award rates had seen little of the increase in productivity over the years. Figures taken from the statistical tables showed that in the four-year period from 1966 to 1969, the effective

purchasing power of rates within the jurisdiction of the Court, had fallen by, something less than 1 per cent “It remains to be seen how long the up-turn in the June quarter is maintained in the face of the gathering momentum of price increases,” he said. “But even if the figure • is maintained, the case for a • general wage order is in no ’ way weakened by a 2 per [ cent increase in effective pur- ’ chasing power during tbe period 1966-69, particularly when, as we have already pointed out a major part of this apparent real improve--1 ment is the result of a trans- ' fer of ruling rates into award rates. I "A long-term examination ■of movements in effective wage rates presents a dismal I picture.” External Migration From 1941 to 1954 there i had been an increase in real purchasing power for those on award rates Of 22 per cent Over the next 12 years to 1966, there had been an increase in real purchasing power of 3.2 per cent for those on minimum award rates. As an indicator of economic conditions Mr Long drew the Court’s attention to losses sustained by the working force through external migration. An examination of measures taken by the Government in relation to the economy showed that wage and salary earners had to carry the heaviest part “From the measures taken by the Government in February, 1967—abolition of subsidies, abolition of milk in schools, higher interest rates, higher rents, ‘ and higher Government charges—through the future measures in that year culminating in the November devaluation, right on to the recent 1970 budgetary measures, wage i and salary earners have had the misfortune to be the most > convenient group to impose deflationary measures upon, l while incentives have been i handed out to others,” he said. “It must be borne in mind < that the average wage and ’ salary earner has little mar-: gin for savings, and mea-• sures that reduce his purchas- i ing power also directly re- ’ duce his standard of living ” i Mr Long said this tendency 1 to ignore the welfare and just Aspirations of wage and I salary earners, and to regard 1 wages and salaries as an easy i category to control, seemed i algo to run through much of the thinking of the National ■ Development Conference. Interests Obscured “The emphasis on production and exports tends to obscure the interests of the wage and salary earner, and to overlook the fact that the economy exists for the people of New Zealand,” he said. “In recent years it has been the fashion to put economic growth as the primary objective of managing the economy, as a few years before that it was stabilisation. “But when the act was passed, emphasis was given to living standards and industrial harmony, and it is clearly the responsibility of the Court to make such adjustments in remuneration as are necessary and justified in terms of its statutory provisions. “There may be some among those opposing this application—and I assume there oil be some opposition—who will say that the eroded standards of living of New ZealanJ workers cannot be restored, and such persons would oppose even more strongly an increase in those living standards. “Their attitudes would be in strange contrast to the state of ‘prosperity’ to which Mr Muldoon, in the Budget, said New Zealand had re turned. Standards of living must be restored and advanced.”