Profits justified, workers' pay rates bemoaned

Press, 7 July 1977, Page 5

Profits justified, workers' pay rates bemoaned

While there was a situation where some New Zealanders could afford to buy $l2OO imported dinner sets and others had barely enough food to put on any plate, the country had a very serious social problem, said the accountanttreasurer of Corso (Mr A. Kirk). He was participating in a

panel discussion on “Workers’ Pay and Company Profits.” The panel, chaired by the Professor G. A. Nuthall, also included the president of the Canterbury Trades Council and member of the Federation of Labour executive (Mr W. R. Cameron), the general manager of a national refrigerating company (Mr J. Neilson), and the managing director of Lichfield (N.Z.), Ltd (Mr L. Govan). Mr Kirk said that certain professional groups, which he had earlier named as the Medical Association, the Law Society, and the Society of Accountants, were increasing their profits at the expense of other groups in society. ’ In the industrial sphere, he noted that 0.5 per cent of shareholders controlled 40 per cent of the shares in New Zealand’s 12 largest companies. In an economic situation which he said had gone from bad to worse, and from serious to catastrophic, he quoted examples of misplaced investment which often occurred. Another cause for concern was the transfer of profits

between countries as a result of foreign ownership, he said. After unpacking a suitcase of shirts, pyjamas, and dresses, Mr Govan drew attention to the manufacturers’ plight. Inflation had pushed up prices, and general costs had forced manufacturers to cut out lines of goods and to borrow heavily, he said.

From $lOOO profit, $450 would go in taxation, another $275 would be paid in dividends to shareholders, and the remaining $275 would be ploughed back into the firm if it had not already been absorbed by higher costs, said Mr Govan. Firms were closing down branches at Ashburton and Kaiapoi because they did not have enough money to carry on, he said. Mr Neilson said there should be no need to apologise for making a profit. Profits were required to stay in business and provide jobs. Although Mr Neilson believed that company profits were often used as a scapegoat, he was also concerned about the situation workers found themselves in. “Workers on low incomes suffer most and are in the worst position to combat adversity,” he said. However, palliatives in the form of &10 or $l5 wage increases meant little in a system which offered limited responsibility and limited scope for workers, said Mr Govan.

On worker participation in

industry, Mr Govan said that there would be a harmful effect if workers were not offered a part in decisionmaking, yet if their role was concerned only with handouts, the scheme would start out on the wrong foot. Worker participation had not worked in West Germany, said Mr Cameron. The workers’ representatives initially had had the full support of the workers, but as they had merged with the employers more and more, the workers had lost confidece in their representatives and the system had broken down.

There would always be a conflict between the interests

of those selling their labour and those investing capital, he said, as the more wages

were earned, the less surplus value there would be.

Significant changes in the relationship between wages and profits had taken place, with the Government

definitely supporting the profit maker, Mr Cameron said.

In this state of conflict it; was the one who carved the cake in the finish who was! important, not just those! who had taken part along the way, he said. Workers were often criti-l cised for withholding their I labour, yet the withholding! of capital could also be;, viewed as a strike, as both;l were factors of production. Ii Mr Kirk said.