Do not expect big pay rises, ‘or else’—P.M.

Press, 16 August 1977, Page 1

Do not expect big pay rises, ‘or else’—P.M.

PA Auckland The Prime Minister (Mr Muldoon) clearly indicated last night that any hopes of large wage increases under the Government’s new policy would not be realised.

He told the Auckland Manufacturers’ Association that price control would not be lifted and negotiations between employers and unions should not take into account the cost of living.

“Price control will remain because legitimate wage increases can be accommodated inside the present system of price control,” he said. “The removal of price control would remove the last sanction against excessive agreements.”

Mr Muldoon said it should be borne in mind that the normal round of negotiations year by year should exclude cost-of-living factors. “The genera) wage-order system will remain and be written into law in terms of the new criteria and it is the general wage order which is expected to take up the cost-of-living aspect,” he said. He said it was clear that the percentages “bandied around” in the news media in the last few weeks “have been grossly excessive in terms of the

annual employer tradeunion negotiations.”

These were difficult times and they demanded unorthodox policies.

“If this move succeeds, well and good — if it looks like going off the rails, the clamp will go on immediately,” said Mr Muldoon. He said that wages had risen last year — when controls were tight — about the normal rate, according to the latest statistics.

“This was achieved by so-called exceptional circumstances and increases which fell mostly outside the criteria in the regulations, an excessive general wage order, house agreements, and straight-out defiance of the regulations.” he said. “There has indeed in recent times been more than a suggestion that trade-union militancy in some of the communist-led unions has been achieving results by threats of disruption to which employers have given way.”

Mr Muldoon said that it was these factors which had convinced the Govem-

ment that, in spite of the fact that the rate of inflation was still not low enough to have, free wage negotiation without considerable risk, nonetheless that risk should be taken. “We are going to see what free bargaining and a promise of moderation can do,” he said.

Earlier yesterday, Mr Muldoon said that forthcoming negotiations would be mainly to adjust anomalies “and that kind of thing." “What we have got in mind is a figure that will give sufficient leeway to adjust relativities and things of that nature, and fix conditions. Then, presumably, the Federation of Labour will move for a general wage order.” Mr Muldoon said that he knew “roughly” the area in which he would expect increases but he declined to be specific. Legislation giving effect to the new policy would be before Parliament “very soon.” Professional fees may soar — Page 3.