Australian wage freeze?

Press, 3 December 1982, Page 12

Australian wage freeze?

The Australian Government’s call for a freeze on wages has not been rejected by the Australian Council of Trade Unions but certain conditions have been demanded. A mark of the seriousness of the employment problems in Australia, where more than half a million people, about 8.2 per cent of the workforce, are out of work, is that the call has not been rejected out of hand. Predictions have been made that 10 per cent of the workforce will soon be unemployed. One of the striking differences between the proposed freeze in Australia and the existing freeze in New Zealand is that only wages would be frozen in Australia, and not prices as well.

The Australian Government wants a pay freeze for 12 months; the unions are prepared to accept what they call a pay pause for six months with a 6 per cent wage rise at the end of that time. The A.C.T.U. also wants to be able to pursue wage claims already under way and it wants job creation schemes financed through the Government deficit. It seeks price controls on some Government services. The employers’ group, the Confederation of Australian Industry, not surprisingly, is backing the Government in wanting a 12-month. wage freeze and rejects job-creation schemes or any catchup payment at the end of that time. The A.C.T.U. also wants some protection from imports as part of the deal. Some backing in this would come from manufacturers, who have already been making representations to the Government for more protection from imports since the failure of the Ministerial Council of the General Agreement on Tariffs and Trade to make any progress in freeing trade. The Government appears to be adopting the attitude that it will examine protection on an industry-by-industry basis, not in a blanket way. Two events are likely to influence the adoption of a wage freeze in Australia. One is a special Premiers’ conference which will be held on December 7. Because public servants in Australia may be employed by either the Federal Government or by state

governments, the state governments must be consulted on any move to freeze wages. The Cabinet in New South Wales has forgone a 6 per cent wage rise and backbenchers who were granted an 11 per cent wage rise have cut their increase. This gives an indication that New South Wales might agree to the plan for a wage freeze. The Queensland Government is freezing state government charges. The A.C.T.U. will withdraw its conditional offer of a wage pause if the idea is not accepted by the special Premiers’ conference. It has sought a voice for itself in that conference—a proposal which the Government, faintly shocked, has rejected. The second important event which will help to determine the outcome of the present negotiations is the by-election which will be held in the Victorian seat of Flinders on Saturday. This seat has been held for the Liberals by Sir Phillip Lynch, formerly Minister of Industries, and Commerce, and it is traditionally Liberal, held by the man who until recently was Deputy Leader of the Liberal Party. A loss of Flinders to Labour would be a devastating blow to the Government. The Government would not be put at risk in the •House of Representatives because it still has a healthy majority, but such a result would show the Government how much the tide had turned against it. The state government in Victoria became Labour this year for the first time since the Democratic Labour Party split away from the Australian Labour Party in 1955. The Government cannot but be eyeing Flinders uneasily. If it holds Flinders it will be more confident about pressing ahead with a wage freeze. The Government will be approaching the special Premiers’ conference with some nervousness as well. The last time it attempted to freeze wages the move arose from a suggestion made by the then Premier of Victoria, Mr Dick Hamer. Officials at the Premiers’ conference worked hard on the proposal. Because of a series of mishaps and bungles afterwards the freeze lasted for six weeks.