‘Inflation — but in control’

Press, Volume CXIV, Issue 33514, 20 April 1974, Page 1

‘Inflation — but in control’

(New Zealand Press Association 1 WELLINGTON, April 19. The Minister of Labour (Mr Watt) admits that the 9 per cent General Wage Order made today is seen bv the Government as inflationary, but says that New Zealand’s inflation will still stav below the world average.

He said he hoped the type of measures announced today would not become permanent or annual, but this would depend on world inflation trends. If productivity continued to increase. New Zealand would be able to absorb much of the inflation created by wage rises.

New Zealand could not isolate itself from world trends and it would be "gazing into a crystal ball” to say that there would be a return to free bargaining in July next year, he said.

While he would like to say that today’s controls were the last of their type, if world inflation continued at its present rates. New Zealand would probably have no option but to maintain controls.

Mr Watt said the Budget could bring one or two amendments to today’s measures but they would not be major ones. The commission, because it would set Parliamentary salaries, would replace the Royal commission on this

topic. It would take the question of their pay right out of the hands of M.P.s. Allowances, 100 Allowances normally increased by general wage orders will also be increased by 9 per cent under today’s announcement. Asked to state whether the wage increase would apply to ruling rates or award rates, Mr Watt said it would apply to all rates usually covered by

general wage orders. Other matters, including allowances not normally increased by general wage: orders, would have to be negotiated once a year when:, awards or agreements camel up for renegotiation. Mr Watt said that social: security benefits will rise by at least 9 per cent on July 3.1 No exact increase was nomi-, nated today because it could ■ be higher than 9 per cent. Asked how the Govern-:

ment would assess profit levels for businesses which had not been operating four years, and thus had no fouryearly average profit, Mr! Watt said reference could be: made to. the profits of similar: ’businesses. ‘Govt decision’ Mr Watt was asked why: he had said a few weeks ago 'that the new Industrial Commission would decide the: I level of today's general wage! 'increase, but in fact the! Government had decided it. I He said it would still bej his preference that the com-j mission had done the job, but; in discussions he had found! that the commission had a| great deal of work to do in! other fields. It might have taken a long: time for it to make a deci-r sion and it “would have! been difficult to hold the! trade union movement.” j As a result, the Govern-! ment had made this decision,! I but the commission would j make any future decisions onj general wage increases, i Asked if the measures rep-! resented an open invitation' to unions to try for 25 per! cent of 9 per cent, Mr Wattj isaid this could be so. but! 'this was a risk that had to: be taken. The sum involved would! not be great.