Unions want urgent pay talks with Government

Press, 8 January 1983, Page 1

Unions want urgent pay talks with Government

&PA

Wellington

New Zealand’s umbrella union organisations, the Federation of Labour and the Combined State Unions, have demanded urgent talks with the Government on wages and the economy.

They say in a letter to the Prime Minister. Mr Muldoon, that their approach arises from a- "rapid deterioration in the state of the economy over the last few months.” The letter, accompanied by a 55-page trade union analysis of the economy in 1983. was released to the news media yesterday to encourage “the widest possible debate” on New Zealand’s economy. The joint approach calls for corrective action in two main areas: urgent increase' of spending levels to prevent “calamitous contraction” in the domestic economy;' and swift action to develop a wage-fixing system to apply when the wage-prize freeze ends on June 22. The trade unions also say

they want clear advice from the Government on what it plans to do about what they see as a deteriorating economy. They want the talks to open as soon as practicable. The Government in November rejected a combined approach from the F.O.L. and the C.S.U. for an immediate $2O-a-week pay increase for workers and beneficiaries on the ground that the October tax cuts would be compensation enough in combination with the price freeze. In their letter to Mr Muldoon, the unions say: “While many of the warning signs were evident in November, the trends have accelerated and predictions of economic decline have unfortunately turned out to be correct."

In December, the economic news was dominated by regular reports of lay-offs, the recourse to short-time and the implementation ofextended holiday shutdown periods in a number of industries, they say. Weakening' retail sales figures, high stock levels and declining forward orders predicted by retailers have been confirmed by official statistics, the unions say. “The low level of economic activity has created dangerously brittle conditions in a number of industries. The fear of the trade union movement is that if industries are allowed to decline too far, the consequential shutdowns of branches of those industries constitute a permanent reduction in employment and output capacities. “The damage, once done, becomes impossible to reverse." The unions argue that a $2O pay rise, while still leaving many workers with a pay packet that had not kept up with prices since their last wage increase, would inject a degree of stability into the economy and put more in dollar terms in the hands of lower-paid workers. They say they are particularly concerned about the lack of the development of a firm proposal for a wagefixing system to apply after the freeze. “Freezes are a lot easier

to get into than get out of, and there is constant danger that the economy could be severely damaged on what is often called ‘re-ejitry’.” The F.O.L. and the C.S.U. also take Mr Muldoon to task for what they see as his failure to spell out the Government’s plans to lead New. Zealand to economic recovery.

Quoting Mr Muldoon as saying that much depends on the recovery of the United States economy, they say that that is increasingly unlikely to .occur soon enough to prevent dramatic downturns in output, employment levels, and living standards in New Zealand.

The unions say in their conclusion to a background analysis of New Zealand’s prospects for economic recovery: “It is unrealistic to allow any further deterioration in the domestic spending component of the New Zealand economy.

“Remedial action is therefore urgent. The case for a minimum $2O-a-week adjustment to wages and benefit levels is vital to the stability of the New Zealand economy for the first part of 1983.”