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Government supports de facto indexation



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MEDIA RELEASE SENATOR FRED CHANEY LEADER OF THE OPPOSITION IN THE SENATE SHADOW MINISTER FOR INDUSTRIAL REDXTIONS

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GOVERNMENT SUPPORTS DE FACTO INDEXATION

"The Government's proposed wage-fixing system is little more than an elaborate camouflage for de facto wage indexation," the Shadow Minister for Industrial Relations, Senator Fred Chaney, said today.

"And by pandering to union demands and threats, the Government's revised submission to the National Wage Case undermines its whole economic strategy," he said.

"Unless the Commission asserts its independence and rescues the situation, unit labour cost growth will accelerate and international competitiveness will decline, putting pressure on our current account."

Senator Chaney was speaking at a Housing Industry Association lunch in Perth.

"The Government has backed away from its commitment earlier this year to a productivity-related wage system. In the face of union threats, it has decided to placate them at any cost. Unfortunately that cost will be higher inflation and reduced

living standards.

"The Government's revised and still very confusing submission introduces a number of dangerous elements into the wage fixing equation.

"There is a guarantee of real wage maintenance regardless of productivity. It also appears that wage increases up to the 5.5% ceiling will be awarded on the basis of a promise to restructure. There is no requirement for delivery of improved performance. Moreover, the expectation is created that any tangible changes will attract additional rewards.

"It seems that industrial disruption or a refusal to negotiate may be rewarded with an early arbitrated increase.

"The Government claims that its system will encourage the parties to address productivity issues and yet it requires only a promise to perform or industrial action to win a sizeable wage increase. The incentives are all in the wrong direction.

"The Commission has an unenviable task. It must decide whether to back away from the gains made under the second-tier. It can only be hoped that it will act responsibly even if this means incurring the wrath of the Government and the unions.

Ironically, it is the latter's actions which are threatening the existence of the very system they so fiercely defend."

PERTH 21 July 1988 Contact: Keith Kessell (09) 325 8179