Wages threat ‘paper tiger’

Press, 4 October 1985, Page 4

Wages threat ‘paper tiger’

By

PATRICIA HERBERT

in Wellington The Government’s threatened wage regulations were yesterday dismissed as a “paper tiger” by Dr Jonathan Boston, an industrial relations expert at the University of Canterbury. He said he did not think controls likely because, according to the school of economic thought to which the Minister of Finance, Mr Douglas, subscribed, they would rebound when lifted. In the short term there might be positive gains but at the price of bottling up pressures which would eventually produce an explosion. Dr Boston also said that to regulate wages would be seen as a U-turn from the

more-market thrust Mr Douglas was embarked on. This might lead to a loss of confidence among foreign investors and the financial sector as to his commitment to other policies. Then, to intervene against particular settlements would be to invite union anger and to bang another nail into the coffin of relations between the industrial and political wings of the Labour Party. Interpreting the threats as the Government’s contribution to normal pre-round posturing, Dr Boston said he had been surprised at the speed and repetitiveness with which they had been raised. The round was developing much as expected, he said. It had always been known that it would be difficult.