Wage order of 2.7 p.c. likely next month

Press, Volume CXIV, Issue 33434, 16 January 1974, Page 1

Wage order of 2.7 p.c. likely next month

(New Zealand Press Association)

WELLINGTON, January 15.

A General Wage Order of 2.7 per cent is expected to be paid next month as a result of the announcement of the fourth-quarter increase in the cost-of-living index.

The Minister of Labour (Mr Watt) said in an interview today that the first Cabinet meeting of the year next Tuesday would decide when the payment would be made.

The total increase in the cost of living from June to December amounted to 4.7 per cent, but workers have to absorb the first 2 per cent. Originally they were to have absorbed the first 4 per cent but the Gov* ernment halved this in an amendment to the Economic Stabilisation Regulations last month.

The Minister of Trade and Industry (Mr Freer) said in an interview that the fourthquarter figure was not far from what the Government had expected in the light of the impact of imported inflation into raw materials and consumer goods. “The movement away from food prices into other issues was also expected,” he added. “Naturally I would have liked the figure to be lower. Who wouldn’t?”

But looking at the impact of inflation on other countries it was very much in line with what the Government had set out to achieve.

Fuel crisis

Mr Freer said that the challenge this year would be to maintain stability in the face of the greatest single

economic upheaval the world had had to face—the fuel crisis. Its impact would mean it would be extremely hard to maintain a greater degree of stability than in the past, Mr Freer said. The Federation of Labour may seek to have the wage adjustment order predicted tonight augmented by a further all-round wage rise to compensate for increases in the cost of living.

The president of the F.O.L. (Mr T E. Skinner) said that a 2.7 per cent wage adjustment order would by no means keep wage earners abreast of rising prices.

F.O.L. meeting

The federation executive would decide at its meeting next month just how—possibly by a further wage adjustment order—the work force ought to be compensated for the soaring cost of living.

Mr Skinner said that the proposed size of the order was about what he had expected.

“This will only serve to carry out the Government policy of giving the worker a share of the increased productivity. “It will most certainly not help the wage earner catch up with price increases.

“The continually rising cost of living, as indicated by the consumer price index, is something which will have to be watched very closely.”

Wages clamp

The Economic Stabilisation Regulations, which will hold all wages in a clamp until the regulations expire on June 30, do not provide for any further wage adjust-

ment orders to be made irt the remaining five months.

But Mr Skinner said the Government might have to be asked to change this.

New Zealand Manufacturers’ Federation representatives would meet Mr Freer on Thursday to discuss economic stabilisation and pricing policy, the president (Mr J. D. Bull) said yesterday. He would not comment further on the wage order until after this meeting, which would follow a meeting of the federation’s stabilisation and pricing committee.