Wage tips of 12% too high, says P.M.

Press, 23 June 1986, Page 1

Wage tips of 12% too high, says P.M.

PA Hamilton Predictions of a 10 to 12 per cent wage round are too high, says the Prime Minister, Mr Lange.

The Institute of Economic Research, and Business and Economic Research, Ltd, would revise their estimates downwards before the next wage round, he said in Hamilton on Saturday.

The independent organisations had shown a “remarkable integrity” in revising downwards earlier estimates, Mr Lange said.

“I think there will be cause for them to be consistent again.”

The estimates had already been revised downwards to take into ac-

count a reduced inflationary expectation. “By the time the wage round comes I think they will have had cause to revise that downwards again.” Mr Lange said he would not presume to dictate what the wage round should be. "The day of the Government edict on wages has gone.” Some industries could not, however, stand 10 per cent, Mr Lange said. In the rural sector 10 per cent would be the end for a lot of processng indus-

tries. Service industries would suffer badly. “They can’t function now, some of them,” Mr Lange said. Flexibility was needed in wage negotiatons, but it was not for the Government to say how much, he said. The Goverment had a responsibility to bring more flexibility into the State sector.

“We can’t preach to the private sector about how flexible they ought to be unless we in the State sector do our bit.”