THE PRESS SATURDAY, MAY 7, 1983. Striking the wrong note

Press, 7 May 1983, Page 18

THE PRESS SATURDAY, MAY 7, 1983. Striking the wrong note

The Federation of Labour seems determined to mount a campaign of industrial disruption in support of its claims for an immediate $2O-a--week wage rise for all workers and for an immediate end to the freeze on incomes and prices. Such action is bound to cost the country dearly. Threats such as that made at the F.O.L. conference by the president of the Wellington Trades Council and secretary of the Cleaners and Caretakers’ Union, Mr P. J. Kelly, that “his” cleaners can close the capital down, suggest that the economic loss caused by the planned rolling stoppages will be matched by widespread public inconvenience. The economy can ill afford the loss of productivity that seems certain to result from the F.O.L.’s chosen course of action. Workers can ill afford the cut in their wage packets that will also result. If the negotiations between the Government, the employers, and the unions on wage-fixing procedures are another victim of the strike action — and this would be likely — the F.O.L. will have thrown away the best opportunity it has had for years to remove features of wage-fixing that it has found objectionable. The F.O.L. will also have lost a chance to create a mutually acceptable system that reflects the realities of the present. Without a new system, the country will continue to be plagued by costly strikes and stoppages at each wage round. Against this list of disadvantages, the F.O.L. can offer no positive result from its campaign. Strikes and stoppages will not persuade the Government to lift the freeze and to allow a $2O-a-week pay increase. The Government has rejected these claims several times already; industrial action will only harden its resolve. The Government’s hand has been strengthened — and the F.O.L.’s correspondingly weakened — by recent analyses of the effects of the freeze so far. In January, without accurate figures to support or rebut the argument, it was easy to complain that the freeze had left workers $2O a week worse off. Putting aside the fact that a desirable purpose of the freeze was to reduce living standards a bit anyway, the plain truth is that the figure of $2O for all is far too high. A good argument can be put for people on the lowest income levels to enjoy some relief.

A Statistics Department study has been made of real disposable income in the average household — that is, income after tax, adjusted for movements in the consumers price index and allowing for the tax adjustments in last year’s Budget. The study shows that real

income for most households after the first six months of the freeze was greater than it was 12 months previously. The real disposable income of workers on lower-than-average wages declined during the year by varying amounts; but even for the worst-affected, the decline was less than $ll a week. A $2O-a-week increase such as the F.O.L. suggests would fuel inflation and give all salary and wage earners more money in their pockets in relation to prices than they had a year ago; some would be as much as $4O a week ahead after tax. Nevertheless, some form of financial relief is needed by the single-income families at the lower end of the pay scale. The tax adjustments last year were not enough for them to ward off the effects of the freeze and they have felt the chill most. Much can be said for using the same mechanism again this year to assist this group of wage-earners, and the Prime Minister, Mt Muldoon, has already said that he believes the tax system is capable of meeting their needs. It, has long been clear that the freeze could not be lifted suddenly. Continued restraint will be needed if the success of the last few months in the battle against inflation is not to be frittered away. Apparently the president of the F.0.L., Mr W. J. Knox, is one of a very few people who have not accepted this, or else he finds it convenient to present that image. He is reported as saying that the trade union movement has been “conned” over the length of the freeze, as if it were a 12-month hiatus to end promptly at midnight on June 22, after which everything was to carry on as before.

The Government has to bear some criticism for giving the impression of not knowing itself until the eleventh hour how the thaw would apply. More could have been done to reassure the country before now that a definite programme to throw off the restrictions had been mapped out. Only the most naive could have expected an immediate and total lifting of restrictions. The Government issued its warnings about the ending of the freeze in the Budget statement last August. It now appears that the freeze will be extended by another six months until the end of the year. The six months may be characterised by industrial turbulence. The F.O.L. has chosen to ignore the sound advice it was given by the leader of the Labour Party, Mr D. R. Lange, warning against a policy of confrontation. The result will be that the whole country, including the union members affiliated to the F.0.L., will have to bear the penalties of a crusade the country could well do without.