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June quarter CPI highlights need for wages policy review



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MEDIA STATEMENT BY THE SHADOW MINISTER FOR EMPLOYMENT AND INDUSTRIAL RELATIONS, MR PETER SHACK.

JUNE QUARTER CPI HIGHLIGHTS NEED FOR WAGES POLICY REVIEW

The O p po siti on Spokesman f o r Employment and I n d u s t r i a l R e l a t i o n s , - Mr Peter Shack, today c a l l e d on the Government t o i n s t i t u t e an immediate review

o f i t s wage f i x i n g p o l i c i e s .

"With a cla im f o r a 3.8 per cent incre as e i n wages now l i k e l y a t the

next N a tio na l Wage Case in September, the case f o r a review o f the wage

i n d e x a t i o n process has never been c l e a r e r , " Mr Shack s a i d .

"The f a c t i s t h a t i f wages are not kept under c o n t r o l , then i n f l a t i o n a r y

e x p e c t a t io n s w i l l not be kept under c o n t r o l , and the whole o f A u s t r a l i a w i l l

s u f f e r . " ■

Mr Shack was commenting on the l a t e s t Consumer P r ic e Index (CPI) f i g u r e s f o r the June Quarter which were re le a sed t h i s morning by the Bureau

o f S t a t i s t i c s .

"The 2.4 per cent increase i n the CPI f o r the June q u a r t e r i s i t s e l f

a blow to the Government's economic p o l i c i e s and, t h e r e f o r e , a b i t t e r blow

to the n a t i o n , " he sa id .

. "But the consequences w i l l ,be immeasurably worse f o r the economy i f

the f u l l CPI increase - i n c l u d i n g the impact o f the d o l l a r d e p r e c i a t i o n - i s

allowed to f l o w through to wages. ..

"Such a f l o w through in September w i l l not o n l y add f u r t h e r to the co st s

o f A u s t r a l i a n i n d u s t r i e s and reduce the number o f new j o b o p p o r t u n i t i e s , i t

w i l l f u r t h e r reduce A u s t r a l i a ' s i n t e r n a t i o n a l c o m p e t i t i v e n e s s . -

"The Government must announce immediately t h a t i t w i l l oppose any increase i n wages as a r e s u l t o f the CPI f l o w - o n from the d e p r e c i a t i o n o f

the d o l l a r , " he s a i d .

"And i t should move immediately to review i t s whole wage f i x i n g

p o l i c y . - ~

' "The June q u a r t e r r e s u l t f o r the CPI i s j u s t the beginn ing o f the

f lo w - t h r o u g h from d e v a lu a t i o n o f the d o l l a r - and t h e r e f o r e j u s t the s t a r t

o f p o t e n t i a l wage r i s e s as a r e s u l t o f d e p r e c i a t i o n and i n d e x a t i o n .

"The Government must ac t now to d i s c o u n t wage r i s e s f o r the impact

o f the d o l l a r d e p r e c i a t i o n on p r i c e s or face causing even f u r t h e r damage to

. t h e economy, jo b o p p o r t u n i t i e s and our i n t e r n a t i o n a l c o m p e t i t i v e n e s s . "

. Mr Shack, said the Government had to take f u l l r e s p o n s i b i l i t y f o r the

present resurgence in i n f l a t i o n and the p o t e n t i a l resurgence in wage claims

and wage r i s e s .

" I t i s the Government which has run i r r e s p o n s i b l y bi g budget d e f i c i t s ,

which has in tr o d u c e d wage i n d e x a t i o n , which has l e t the money supply b l o w - o u t ,

and which has shown d r i f t and i n d e c i s i o n on every issue t h i s y e a r .

"And i t i s these f a c t o r s which have led t o the resurgence in

i n f l a t i o n - w i t h a l l i t s consequences - shown in the June q u a r t e r CPI

f i g u r e . "

25 JULY 1985