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Tuesday, 30 April 1957

Mr HAROLD HOLT (HIGGINS, VICTORIA) - Even the first part of what the honorable gentleman puts requires some qualification because, as I understand the judgment - and I have not yet had an opportunity to study it as carefully as I would wish - the commission did not say that the current wage was necessarily the highest that was within the capacity of the community to pay. It took the view that a higher wage could have been awarded had it not been for the fact that approximately half the wage-earners of Australia are covered by State awards which have prescribed a higher rate of wages than, in the judgment of the commission, is within the capacity of the community to pay. Consequently, the federal rate now awarded is to some extent lower than it would otherwise have been within the capacity of the community to pay in the judgment of the commission.

On the second point, I do not see any inconsistency in the commission awarding a certain rate as being broadly within the capacity of the community to pay and, at the same time, pointing out that the higher rate of wages will have the tendency to increase the cost level. The second factor may reduce in degree the value of the additional wage the commission has awarded. If the recipients of the wage increase are to enjoy the maximum benefit from it, then it is surely in their own interests that cost levels remain stable rather than rise following the wage increase. A rise in the cost level would take away some of the benefit that otherwise would have been enjoyed.

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