Higher salaries
Sir,—Whatever else is wrong with the Higher Salaries Commission, the 37 per cent increase it awarded should not be regarded as excessive if other award rates are running at 15 per cent to 20 per cent. An average worker pays a third of her income in tax, while a typical worker covered by the Higher Salaries Commission pays two-thirds of her income in tax. Simple algebra shows that the after-tax H.S.C. rate is about 12 per cent, quite comparable to the aftertax rates of 10 per cent to 13 per cent currently being negotiated elsewhere in the economy. The real embarrassment of the H.S.C. to the Government is not the 37 per cent nominal (12 per cent after tax) increase, but rather the system of “relativities” enshrined in H.S.C. negotiation procedures. These could have been directly exposed and changed by the Government as a signal to the rest of the economy of the type of wage rate negotiating procedures they would like to see implemented generally. —
Yours, etc., JOHN FOUNTAIN. November 6, 1985.-
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Press, 12 November 1985, Page 16
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175Higher salaries Press, 12 November 1985, Page 16
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