Govt Takes Over NZ.

P. Franks

Goodbye private enterprise and healthy competition. The National Party, first elected in 1949 promising to dismantle Labour's 'socialist' controls over the economy, has reverted to stabilisation. The aim of the Stabilisation of Remuneration Bill is to "provide greater stability of remuneration for employment." The Remuneration Authority established by the Bill will act as an overseer of increases in "rates of remuneration" for both the State Services and the private sector. Wage increases under new awards or agreements are to be fixed for a minimum period of 12 months and may not exceed by more then 7 per cent the rates as at 1 January, 1971, unless the Authority consents to a shorter term or to a higher percentage increase.

The provision limiting wage increases to 7 per cent of the January rates is suspended until it is brought into force by Order in Council, so if employers and unions fail to comply with the spirit of the legislation the Government has the big stick all ready and waiting. Provision is also made for the issue by the Authority of cost of living orders providing for wage increases where the Consumer's Price Index for the quarters ending 30 June 1971 and 31 December 1971 show an increase in prices.

Clause 26 of the Bill sets out the penalties for an offence, committed under the Bill, by (a) contravening or failing to comply with any provision (b) alone or in combination with others, doing "any act with the intention of defeating any provision of this Act. "(my emphasis). This second offence would probably interfere with the right to strike and this provision obviously hampers trade union's freedom of action which is already seriously limited by the other provisions of the Bill, such as the sections fixing wage rates for not less than 12 months and limiting wage increases to 7 per cent. The maximum fines for offences under the Bill are $100 for an individual and $ 1000 for a body corporate.

So in effect the Government is giving itself the power to control wage levels as it pleases.

In contrast to the Stabilisation of Remuneration Bill the Government's "price justification" scheme seems weak and half-hearted. Price control is of course an anathema to the National Party even though the Government regularly flouts its own nineteenth century principles; so the Government is attempting to control inflation by Keeping down waves rather than prices.

Before the Bill was introduced into Parliament, Tom Skinner made the Federation of Labour's opposition to statutory limits on wage levels quite clear. After the Bill was introduced, he announced that the F.O.L. will instruct its affiliates to demand an increase of 7 per cent on wages for all new awards. He also streesed that the F.O.L. would not co-operate in any way with the implementation of the Government's wage policy.

Before the Bill was published the Labour Party's attitude was hard to predict; however no one outside the Opposition Caucus could have anticipated the Party's incredible attitude when the Bill was introduced. Norman Kirk was the only Labour speaker in the First Reading Debate. He complained that the Opposition had not been consulted or given any information about the Bill and said that the Labour Party would reserve its opinion until it had the opportunity of studying the Bill. The Opposition's complaint about lack of consultation and information may be quite justified but its reluctance to speak to such an important and controversial Bill suggests either an inability to formulate a policy on wages or a lack of guts in deciding where to stand. After all, the introduction of the Stabilisation of Remuneration Bill can hardly have come as a very big surprise to Mr. Kirk and his colleagues, and they surely had time to formulate a general position on statutory limitations on wage increases without having to see the exact provisions of the Stabilisation Bill.

The Opposition's refusal to even speak in the First Reading Debate was stupid and rightly ridiculed by Government Speakers, however Labour's dilemma in deciding whether to support or oppose the Bill is fairly obvious. On the one hand the Opposition has argued in favour of greater stability in the economy and criticised the Government for doing nothing. If it opposes the Bill now, the Opposition probably fears that it will alienate 'public opinion' and also risk Government criticism for lack of 'positive' alternatives. On the other hand, the Labour Party cannot afford to alienate the trade union movement, represented by the Federation of Labour and the Combined State Services Organisations. The trade unions remain the Labour Party's political base, without controlling the Opposition as National M.P.'s have sometimes alleged. The F.O.L. s opposition to the Bill, as expressed by Tom Skinner, could hardly be more forthright. Perhaps it is not surprising that the Labour Party is waiting to hear the submissions at the Committee stages of the Bill before making up its mind.

At this stage it is too early to definitely predict a fight between the Government and the Unions over wage and salary restraints and increases it has been suggested, originally by the Social Credit Leader John O'Brien, that the Government will pick a fight with a union or unions and then hold an election on an industrial issue, as it successfully did in 1951, with the unions as a convenient scapegoat for the Government's failures. This is certainly a possibility, although the F.O.L. today, under Skinner's leadership is far too strong and far more unified than it was in 1951. The Government would have to split the trade union movement before successfully defeating it. Whatever happens, the light over the Government's wages policy inside (hopefully) and outside Parliament has yet to come.