Level of pay rise for discussion at tripartite talks

Press, 24 July 1985, Page 8

Level of pay rise for discussion at tripartite talks

By

PATRICIA HERBERT

in Wellington

The size of the pay rise that workers will look for from the coming award round will be dicussed at the tripartite talks this Friday. The parties — the unions, the employers, and the Government — will discuss what level of wage adjustment the economy can sustain. But they will approach the subject through the back door. The Minister of Labour, Mr Rodger, said yesterday that he did not expect the discussion to involve figures at this early stage. Rather, he thought it would concentrate on principle — whether a guideline would be advisable. Th Employers’ Federation is expected to push for some kind of guide as protection against high union demands and as a form of wage control. This would reflect business anxiety that companies will be “taken to the cleaners” under the Government’s policy of flexible bargaining based on. industry ability to pay and achieved through house agreements. The effect will be to encourage the stronger ele-

ments in the work-force to flex their industrial muscle. It will also put more pressure on second-tier negotiations and the federation is concerned at the lack of a negotiating code in this area. It has argued throughout that appropriate procedures must be implemented or set up before the round is begun but has been told by Mr Rodger this week that no legislative changes are needed. The Government, through the Treasury briefing paper, has indicated a wage path of 10 to 13 per cent, averaging out at about 12 per cent. If the employers repeat their performance of last year, they will probably come in at 8 to 10 per cent. In other words, they will take the lower end of the Government’s range as their “best offer” and produce a span a few percentage points below. The unions have already declared that they want a catch-up on prices since December and to protect workers from the ravages of inflation over the 12 months the round will run. This would produce a minimum figure of about 18 per cent — 6 per cent to cover income erosion this

year and 12 per cent to match the estimated movement in prices next year. The argument is academic, however, as they will not want a guideline if it is to be used as a form of wage constraint and this it must be under the Government’s present economic strategy. The Minister of Finance, Mr Douglas, has indicated that this year wages must again trail prices presaging a drop in the real value of the pay packet, at least until the promised income tax cuts are delivered. The unions might have agreed to a guideline had the general wage order been given and if they were guaranteed a wage “top up” through some form of indexation next year, but they have been turned down on both scores. Given that agreement is unlikely, the question which remains is whether the Government will declare a guideline. Mr Rodger has indicated that this is not its present intention — that it wants as far as possible to remove itself from the negotiating process. Whether it will eventually succumb to employer pressure and to the well publicised fears of the corporate sector remains to be seen.