The Press SATURDAY, APRIL 20, 1974. The new package for wages and prices

Press, Volume CXIV, Issue 33514, 20 April 1974, Page 14

The Press SATURDAY, APRIL 20, 1974. The new package for wages and prices

The new wage stabilisation regulations announced bv the Government yesterday combine regular reviews of wage and salary levels in the light of increases in the cost of living with some flexibility to negotiate improvements in conditions and small v age increases which, in theory, would be related to productivity in particular industries. In spite of some complications, it is a mixture which should work; yet it is unfortunate that the Government continues to tie wage fixing so firmly to a cost-of-living formula, and even more unfortunate that, to get its package accepted, the Government has apparently to hold out to unionists the carrot of a much larger general wage order on July 1 than is likely to be justified by increases in the cost of living for the first six months this year Wage and salary earners have had increases of 8.5 per cent and 2.7 per cent since August last year; with the 9 per cent promised for July 1. incomes of the majority of adults will have increased appreciably' faster than the cost of living. This is not a helpful precedent to have set for the reviews to be made in future by the Industrial Commission. Employers will be relieved to know that the Government has decided that the cost of general orders may be passed on in prices; for the country as a whole this will do little to inhibit inflation. Farmers — and to a lesser extent other self-employed people — will find little cause for satisfaction in the package, unless it is the wry thought that the end of all controls would have added even greater burdens to their costs. The income-fixing procedures might help to reduce industrial confrontations; they virtually guarantee pay increases of 11 per cent in the next six months for most employee?. To many this will seem better than another round of uninhibited negotiation of awards after the present regulations expire on June 30. The new price control and price surveillance measures are less happy . A determined attempt has been made to reduce to a relatively simple formula the mass of regulations in the last year; the result is still complicated and clumsy. It is likely to have the effect of reducing the supply of some goods and services at a time when an expansion is desirable to absorb the substantial increase in spending power. Some stability may be hoped for, from the measures considered as a whole. Prices for any one line of goods will not, as a general rule, be permitted to increase more often than every six months; awards, once negotiated, will be expected to run their full 12 months term before further negotiation and the increases provided in them are. in any event, likely to be relatively small. But a coherent plan to restrain the internal sources of inflation remains as elusive as ever Unfortunately the package contains regulation-clad guarantee? that much of the momentum of inflation will be maintained