Free bargaining in wages 'not on’

Press, Volume CXV, Issue 33816, 12 April 1975, Page 2

Free bargaining in wages 'not on’

(New Zealand Press Association) WELLINGTON, April 11. A return to completely free bargaining between workers and employers on wages within the next few months was “just not on.” the Prime Minister (Mr Rowling) said in Wellington today.

But he indicated that the Government would like to see progress as soon as possible towards a return to some system of freer wage negotiation than possible at present.

The Minister of Finance (Mr Tizard) indicated that some wage increase was likely during the second half of this year. Mr Rowling and Mr Tizard were talking to a group of newspaper editors as a prelude to next week’s discussions between the Government and representatives of all sections of the economy. Mr Tizard said that an important part of the talks on Tuesday would be the discussion of how far compensation should be given for increases in the cost of living. and how this compensation should be effected. Mr Tizard said there was no way in which all New Zealanders could be fully compensated for increases ini the cost of living caused by higher prices for imports, especially oil. In the past, wage-earners had mostly received full com. pensation for increases in living costs. Farmers and other groups had depended on their luck and on circumstances. Farmers recently had not been able to recover all their cost increases.

The talks next week would be very much concerned with the extent to which cost-of living increases should be compensated, and with how that was to be done.

The Government had prepared contingency plans, supported by tax tables, for a wide range of compensations for cost-of-living increases, he said. After next week’s discus-

sions with community leaders, the Government would determine the policy for the Budget. No date had been fixed yet for its presentation.

Mr Tizard said the more militant sections of the trade-union movement would probably claim that free bargaining in wages should be restored without delay. Less militant groups would say there should be at least some room for free bargaining.

Other sections of the community, including employers, would probably say that the country would be best served by having no increase in wages in the next few months.

The plans prepared ranged from full compensation for the estimated cost-of-living increase during the first half of the year, to nothing. To provide no compensation would probably cause the least disruption, but to offer nothing would not be acceptable, Mr Tizard said. Wage bargaining Mr Rowling said that a return to free bargaining for any wage increases from July was not possible, but he hoped there could be a progress soon towards partial restoration of free bargaining. The ideal solution when circumstances permitted would be a general wage order hearing, in which all factors could be exposed to the full tight of day But in the present state of the economy, not only wages, hut such cost-raising factors as claims for longer holidays must be subject to restraint. The acceptance by the union movement in January, after discussions toward the end of 1974, of a wage increase which did not then compensate for the whole of the cost of living increase, was “one of the most responsible acceptances of Government action that I know of by any industrial group in the Western world in the last decade,” said the Prime Minister.

Maxiianm tax cut Mr Tizard, answering a question, said the maximum reduction in taxation under any of the contingency plans prepared was less than s2oom. The contingencies included a review of company tax as well as of personal income tax. One of the problems, he said, was that if he gave too much away by tax concessions, the Government

would not have enough funds to stimulate the economy if that were needed later in the year. Overseas deficit Mr Rowling and Mr Tizard both said that New Zealand’s overseas deficit must be reduced to manageable proportions. If tax concessions led to a big increase in import orders, that would be selfdefeating. Accumulated stocks of imports must be run down before there was any resurge of overseas buying. Mr Rowling said overseas borrowing had by no means reached the limit of what could reasonably be serviced. It was at present 9.6 per cent of the gross national product, compared with more than 11 per cent some years ago.