Commission wage rises ‘add 3 p.c. to round’

Press, 25 January 1986, Page 9

Commission wage rises ‘add 3 p.c. to round’

PA Wellington Wage rises awarded by the Higher Salaries Commission added about 3 per cent to the present wage round, according to the Minister of Labour, Mr Rodger. The commission was likely to face legislative changes this year, he said yesterday. Last September the commission gave , pay rises of up to 38 per cent to top State employees. The Prime Minister, Mr Lange, called the timing of the decision, just before the wage round began, “stupid” and “extraordinary.” Since then, two of the three members of the commission, the chairman, Mr Richard Simpson, and Mr Bill Bimie, have resigned. Their resignations were unprecedented they came before their replacements had been appointed. Mr Rodger now has a short-list of members for the commission, and their names will soon be checked with his Cabinet collegues. Appointments are expected next month. Mr Rodger said yesterday that he had ordered studies on the commission’s work, prompted by its effects on the wage round. “Last time the Higher Salaries Commission deliberations did have an impact on the round," he said. “It is our view it

probably had an impact of about 3 per cent.” As the commission’s ruling came at the end of a four-year period, it was unlikely anything quite so dramatic would come before the next wage round, even without any changes to the commission, he said. “But I am inclined to the view that there will be changes. To what extent has yet to be determined by the Government.” Asked if these would be legislative changes, Mr Rodger said: “I think that is likely, maybe not extensive, but that is still in the melting pot.” Some indications that the commission will have to take a broader view of the economic environment came from Mr Lange last year. Then, after the commission’s ruling, he said top State pay rates should be reviewed downwards next

year to take account of the October, 1986, tax cuts. The president of Federated Farmers, Mr Peter Elworthy, said he welcomed any review of the State pay fixing system. “The Government’s whole economic strategy, particularly the need to restrain exorbitant wage increases, could be wrecked by the large increases in the recent wage round,” he said. “The complex system of fixing State pay rates has again put Government servants into a privileged position and placed additional pressure on the Government deficit. “The system of pay fixing has developed in a haphazard way which not only creates pay anomalies within the State service itself but means that the State acts as a pay

leader to the private sector.” Mr Elworthy also called on the Government to consider turning Government departments into corporations. “Taxpayers are entitled to expect that their taxes will be used efficiently and that Government departments provide a costeffective public service. “This will require significant changes to the organisation and operation of Government agencies including a more commercial approach with greater accountability of senior Government officials. “If the Government is to have any hope of making progress with its overall economic strategy, it must move resolutely to introduce changes in its own administration which absorbs such a large part of the country’s resource.”