F.O.L. view opposed

Press, Volume CXV, Issue 33786, 7 March 1975, Page 3

F.O.L. view opposed

(N Z. Press Association) WELLINGTON, March 6. The Employers’ Federation today disputed points made by the president of the Federation of Labour (Mr T. E. Skinner) during a speech in Christchurch yesterday.

Mr Skinner had said that to keep workers employed in their own industry, the Reserve Bank should release more money, if more money ere needed. He had also said he could see no reason why manufacturers in financial difficulties could not get the same financial assistance as fanners.

The Employers’ Federation executive director (Mr ?. J. Luxford) said Mr Skinner

seemed to be advocating inflation as a cure for unemployment. “That sort of cure would only produce more unemployment,” he said. “Mr Skinner has not yet caught up with his Australian Counterpart, Mr Hawke; who recently commented that wage rises which exceed price rises are a contributing factor to unemployment. “Mr Skinner is quite right in saying that unemployment is not necessary to beat inflation, and employers don’t want there to be unemployment. : “But he seems to forget [that unemployment is the I result of inflation.” said Mr Luxford. “Is he advocating higher inflation along with the increased unemployment it would bring?” Mr Skinner was wrong in his suggestion that only wages and salaries were pegged at present, said Mr Luxford. Prices, profit margins, and other factors were all under tight control which was affecting companies’ profitability and liquidity, and therefore adversely affecting their ability to maintain present levels of ■employment. “Relaxation of some of these controls would do much

more to keep unemployment low than the remedies Mr Skinner suggests. “Present profit margins are not sufficient to cover the continually increasing costs w’hich employers have to face. If these cost increases continue through 1975, and cannot be met through increased productivity or prices, then employers will be forced into negative action such as cuts in investment programmes, reductions in stock and raw materials, and staff lay-offs.”