Salaries increases approved before wage round—Sir Robert

Press, 13 March 1986, Page 1

Salaries increases approved before wage round —Sir Robert

PA Wellington The Prime Minister, Mr Lange, approved thfe hefty Higher Salaries Commission pay increase announcement before the 1985-86 wage round, said the former Prime Minister, Sir Robert Muldoon, yesterday.

Sir Robert made the assertion during the Ad-dress-in-Reply debate in Parliament.

Mr Lange retaliated immediately. by strongly denying Sir Robert’s allegation. He described the timing of the commission’s September 9, 1985, publication as “an act of politically motivated economic sabotage.” The dispute in Parliament began when Sir Robert said Mr Lange “gave the nod” to the commission’s findings which awarded pay increases up to 40 per cent to senior public servants and politicians. The determination was backdated to April 1. Mr Lange replied by saying that he and his department had no contact with the commission before the findings were published.

Sir Robert said the commission’s findings, which granted Mr Lange a 37 per cent pay increase, would contribute to a wage-price explosion in 1986.

He said Mr Lange had “acquiesced” in the com-

mission’s findings before final decisions were made. -

He discovered this while inquiring about whether the commission’s increases would apply to the “small amount of taxable income” he received as a former Prime Minister.

Sir Robert said the commission’s determination made no mention of his allowance.

He said staff at the commission told him the commission had looked at the allowance but “they didn’t have time to put it in front of the Prime Minister, through his Permanent Head, so that he could give the nod before they made their final decision.” Sir Robert said he asked commission staff whether this meant proposals had been put before Mr Lange to be given the nod “and the answer was yes.” He said Mr Lange could have postponed the announcement on the ground that it would cause all kinds of trouble for the forthcoming wage round.

“If that had come to me as Prime Minister (before the final decision was made) I would have intervened and I would have said this is the wrong time for this,” Sir Robert said. “At the very least I would have said hold it until after the wage round. Look at the wage

round and then make your decision,” Sir Robert said.

The Permanent Head of the Prime Minister’s Department, Mr Gerald Hensley, last evening endorsed Mr Lange’s recollection of events. “I did not have any advance notice of the commission’s determination,” Mr Hensley said.

At the time of the announcement the threeman commission comprised Mr Richard Simpson (chairman), Mr Jim Francis, and Mr William Birnie. After the commotion caused by the September announcement, Messrs Simpson and Birnie resigned their positions. Mr Francis is still a member. Outside Parliament later, Mr Lange said the “gist of Sir Robert’s comments are ... ‘Look, here’s this chap Lange. He was told what was in it. He pretended he had not seen it. He pretended to be appalled by it. But he knew all the time’.” That was incorrect, Mr Lange said. Mr Lange said that if he had known he would be paid a 37 per cent increase he would have taken steps to dismantle the commission, not just modify its report.

In Parliament earlier, Mr Lange said that Mr Simpson, Mr Francis, and Mr Birnie had not been appointed by the Labour

Government. “The contact between those three commissioners and the member for Tamaki is a blatant indication of the politicking which he is pursuing,” Mr Lange said. Elaborating on the “politicking” allegation outside Parliament, Mr Lange said Sir Robert had some sort of hot-line to the members of the commission.

Mr Lange said the association between Sir Robert and the commission was to be expected, as Sir Robert had appointed the three men. The politics concerning the timing of the commission’s report were just one aspect of the problem. Mr Lange said that if he were asked whether the commission had followed its statutory mandate he would say conclusions were formed from unsubstantiated evidence. “We still do not have in that report the data, the facts on which their findings were derived.” He said that was unacceptable.

Mr Lange said he first became aware of the report’s existence when journalists, who had obtained the report on an embargoed basis from the commission, questioned him on Friday, September 6.

Speaking during the Ad-dress-in-Reply debate, the Deputy Leader of the Op-

position, Mr Bolger, said knowledge of the determination was in the.. Hands of Government backbenchers before it was released. It was “touted” round Parliament Buildings, Mr Bolger said. Mr Lange was stretching credulity if he said he was the only person who had no knowledge of it. Mr Bolger said Mr Lange should not castigate the commission any further. The commission had done its job correctly, he said.

Responding to Mr Bolger in Parliament, Mr Lange said the commission was designed to be independent of the political process. The National Party had honoured this aspect by appointing three of its people to be members.

Mr Lange said it was possible National Party backbench , : members knew - of the determination.

The commission’s determination was “an act of politically motivated economic sabotage.” It came out on the eve of a critical wage round, he said.

The members (of the commission) had known of the circumstances of the wage round “and they were careful not to tell me what they proposed,” he said.

® The retiring Secretary of Labour, Mr Gavin Jackson, and a former Massey University Professor, Mr John Dunmore (chairman), were appointed to the commission on February 15. They replaced Mr Simpson and Mr Birnie.