No place for stand-over union tactics — P.M.

Press, 17 January 1979, Page 3

No place for stand-over union tactics — P.M.

On unions and wage' claims, Mr Muldoon said | that after the present round of wage settlements the pur-i chasing power of wages was, likely to be higher than ati any time since 1974, “I would be most reluc-l tant to move away from' what we term free wage! bargaining because it is a i means by which we can pro- ■ vide rewards for skill and; experience while retaining ; reasonable relativities,” hei said. Two distinct groups were; in the trade union movement, Mr Muldoon said. The large group of trade union leaders sought the best possible deal for their members inside the present economic system which, by and large, they supported. There was a very much smaller group whose main aim was the destruction of the present economic system. When the militant group had employed its stand-over tactics at a certain point the Government had moved, Mr Muldoon said. The militant group had been forced to back off, either on its own accord or on the advice of the leaders of the trade union movement who had not been prepared to let a small militant group jeopardise the system of free wage bargaining which they

regarded as highly desirable

“I have said clearly tha' free wage bargaining doe.not mean that those union: with more clout can use stand-over tactics to get a better deal for their men

bers than others are able to,” said Mr Muldoon.

“It is up to employers to stand up to such tactics and I can assure them that they will have the positive supoort of the Government if they do.

“There can be no place for the industrial wrecker in the Ne, Zealand scene of the future,” he said.

“I am sure my colleagues in the Government would support me in passing appropriate legislation to deal w’ith these people if other methods failed.”

Of the overseas accounts,

Mr Muldoon said that the ast Labour Government had et the economy run free luring its first year, 1973, and moved inevitably into in inflationary consumptioned boom. it was hit by the oil shock it the end of 1973 when the irice of oil eventually rose .ive-fold and terms of trade dropped 40 per cent below :he 1973 peak. “Five years later, the terms of trade are very close to where they were in 1974,” Mr Muldoon”said. There was some reason to believe that over a period of vears they would gradually move back, not to the peak of 1973. but closer to the average for the last decade or so. The overseas account balance — cash passing in and out was generally accepted as the best basis for short to medium term pol-icy-making. “At the time of the change of government three years ago, the annual deficit on that account was $1000M,” he said. “During most of last year it was a little over SSUOM.” The estimates for the year ending June, 1979, were $425M. “At that time Maui gas will be on stream,” said Mr Muldoon. In spite of the. postponement of the building of the Maui B platform and in spite of the off-take of gas being less than was originally expected the balance of payments on a cash basis

would be improved by an estimated SIOOM in the first year and SISOM in the second year. On Government spending, M’ Muldoon referred to “superficial criticism” of the proportion of gross national product being spent by the! Government. “It remains the continuing! policy of my Government tot reduce that percentage,” he said. “But critics are overlooking the fact that if we have in excess of 50,000 people as registered unemployed or on special work we have moved that number of people or close to it from the private sector to the; public sector in terms of their incomes. “Even at SlOO a week each, and that might be a fair average, w'e are talking! of S2SOM a year.” Another factor which newspaper editors and others seemed to overlook was that the percentage of gross national product bandied about was gross Government expenditure, not net Government expenditure, he said. “It is not the gross figure but the net figure that finally comes out of the Government accounts because on the other side of the account — and invariably overlooked is the income tax payable on those various payments.” Referring to inflation, Mr Muldoon said that New Zealand would have to absorb a further increase in the price

of oil-based fuels during the coming year but the amount should not cause too much trouble.

“We have got rid of ridiculous political subsidies on Government charges we', inherited from the Labour Government along with certain other subsidies which pushed up prices in the first year or two of the present Government’s term.” For the last year he had been talking about single-fig-ure inflation and the final figure for the year of 10.1 was within a point or two of what had been apparent for some months. “We will have to absorb the price increases from current wage settlements, which have not been small,” he said. The increases had exceeded what Mr Muldoon believed was sustainable. “We are committed to reviewing the price control mechanism which dates back to some arbitrary and unsoundly based decision of the Labour Government of 1974,” he said. There was no need for excessive price increases this year. “The trimming of overheads in industry under the pressures of the last year or two has produced a situation where increased efficiency will have a favourable effect on many prices of New Zealand goods.” Overseas prices might move a little more rapidly this year, and increased

prices for New Zealand meat overseas would also be reflected in domestic prices. Mr Muldoon said he was not happy with the workings of the general wage order system and considered the! 1978 wage order decision a! bad one both in principle' and in amount. Of the freezing industry Mr Muldoon said the Government last March had imposed a settlement on the industry -which cost about SI.7M of taxpayers’ money, not S3M, SSM. or S7M as had been stated. The direct result of the settlement, he said, had been at last to get the industry working reasonably smoothly. “We have so far had the best season for a number of years and certainly more good will than ever before,” Mr Muldoon said. What had been achieved “as the result of knocking a few heads together and spending a relatively small amount of taxpayers’ money” was the realisation that there were problems and grievances that could best be dealt with by discussion rather than confrontation. Mr Muldoon said the situation in the freezing industry brought him to the much-abused term “productivity.” “Perhaps most people think of productivity as what is produced when people work harder — that

is a long way from tliei truth.” Productivity on many I farms would increase by simply applying more fertiliser. ■ It was nevertheless true I that New Zealand’s productivity had not increased to a satisfactory extent over the years. “It' is wrong, however, to think that productivity will increase by simply working harder,” he said. “In farming, we now have evidence that the production incentives of 1975 are working well. “We believe that the minimum price system introduced last year will give a further under-pinning to farming confidence and thus encourage increased production and increased productivity.” Faced with the problems of the last two years, some manufacturers had introduced more efficient, labour-saving plant. “I have no doubt that the future for the expansion of our manufacturing industries lies in exports, but this means greater sophistication in production and marketing techniques and more training at every level. “It also requires assistance from the Government and that will be forthcoming,” Mr Muldoon said. “There is considerable growth potential for New Zealand in fishing, forestry, horticultural products and

tourism and the Government intends to give specific attention to each.

“Our principal wealth, however, will continue to come from our traditional farming industries and nothing that has been put in front of me in recent weeks, either in the round or in depth, will alter that fact.” Referring to Japan, Mr Muldoon said that the Nakagawa agreement, “in spite of the scoffing of one or two economically illiterate antiGovernment journalists,” had produced some benefits. Possibly the most obvious of these was the fact that more progress had been made in six months than in the previous 15 years in getting acceptance' of Pinus radiata timber into Japan.

“But the bones of the agreement remain and we shall assess the results in terms of our trade when we come to fix quotas for fish for the coming financial year,” Mr Muldoon said. He said he believed expansion of the fishing sector in New Zealand would in the medium term at least be in the hands of joint ventures.

“Those New Zealand fishing interests who put forward joint venture proposals which have not been accepted have not fully realised that the basis for acceptance is the value to the New Zealand economy of the proposition.” Mr Muldoon said the fall

in the United States dollar appeared to have bottomed out and he expected to see it and other key world currencies move closer together this year. However, he said, hanging over the whole international [financial scene was the vast quantity of stateless currencies which were now' 'being recognised for the I threat they presented. “There may be something of the order of five hundred billion United States dollars and up to one hundred billion in other currencies outside the country of origin and outside the control of any central hank or government,” he said.

“A considerable propor- ■ tion of these stateless cur- [ rencies will move rapidly in : accordance with the pro-1 jected movement in the! value of a particular currency and the amount is sol great as to pose a contin-1 uing threat to the whole international financial sys-1 tern.” It was essential for some form of international discipline to handle this, and [ the body best fitted was the! International Monetary Fund. “What is needed, how’ever,! is the political will in the . countries most directly | affected and unfortunately in! this, as in so many other! things, the political will is' lacking in the face of domestic political considerations.” Mr Muldoon said.