THE PRESS WEDNESDAY, SEPTEMBER 14, 1988. Hands off; gloves off

Press, 14 September 1988, Page 20

THE PRESS WEDNESDAY, SEPTEMBER 14, 1988. Hands off; gloves off

The Government is intent on its hands-off approach to the wage round; the Prime Minister, Mr Lange, repeated this week that the Government will neither intervene nor interfere. The other protagonists, the employers and the unions, are more likely to approach the round with the gloves off. The first of the claims to be lodged in the new round, the metal trades award, affecting about 34,000 workers, seeks a 7 per cent rise across the board with a minimum increase of $25 a week at the bottom of the scale. This is well in advance of the guidelines advocated by the Minister of Finance, Mr Douglas, who wants wage movements to go no higher than 2 per cent, and also much higher than the Employers’ Federation has shown a willingness to negotiate. The basis of the claim is a 6 per cent offset to the union’s figures for inflation. The other 1 per cent is said to be linked to productivity gains. The Employers’ Federation has said consistently in the leadup to this round that employers would not entertain inflation linkages to wage claims that take no account of sector profitability, localised costs, and even the individual company’s ability to pay. Mr Lange lent some weight to this approach on Monday when he said that modest increases would be appropriate for some workers, but a nil increase would be the proper result for others, given the state of the economy and the financial and competitive weakness of some sectors of industry. The Government is pinning a lot of its election hopes on the chance of getting an accord with the unions next year. One of the newly appointed Deputy Ministers of Finance, Mr Moore, has a special responsibility to arrive at a compact with the union movement. Mr Lange was quick this week to squash any suggestion that Mr Moore’s brief might include a union accord for this round. Not only would the pressure of time make such a task impossible to achieve — and therefore undermine the credibility of the

Government’s economic strategy even more — but it is too early in the Rogernomics timetable for such an accord to be reached. Two interpretations of last'week’s Cabinet reshuffle are current. One is that Mr Lange has reined in Mr Douglas by shackling him to two deputies, in the belief that division between the Finance Ministers will ensure Mr Lange’s control of Mr Douglas; the other is that Mr Lange has risked making a rod for his own back, because if the three Finance Ministers ever should agree, they, together with the Minister for State-Owned Enterprises, Mr Prebble, would form an unbeatable bloc in the Cabinet, which Mr Lange never could control. Whichever interpretation is accepted, it is certainly true that the Cabinet has pinned its chances of reelection in 1990 on the success of Rogernomics and cannot back away from the policy now. Mr Douglas has been denied the free labour market that would have completed the purist’s policy he mapped out in conjunction with the other experimentalists supporting him from the Treasury. But the manufacturing sector needs some relief from the removal of tariff protection and import controls. Giving manufacturers the chance to avoid ruinous wage claims is not so much the application of Rogernomics as an essential for survival. The Government’s hands-off policy thus becomes a contrivance to encourage employers to break traditional relativities and linkages while allowing the Government to imitate Pontius Pilate from the sidelines. The Government’s reluctance. to contribute to a wage round in which it has so much at stake has to be seen in this light. It also is a policy that risks aggravating the friction and industrial unrest arising from the wage negotiations. The Government is saying, in effect, that it is content for employers and unions to slug it out; all present indications are that this is exactly what they will do.