The Council of Trade Unions supports the decision by Reserve Bank Governor Don Brash not to raise the official cash rate, which was announced today.
“Workers are facing considerable cost pressures, and it would have been an added blow to have higher mortgage interest rates,” said CTU economist Peter Conway.
“We have also seen a fall in unemployment below 6% and higher interest rates could adversely affect this trend.”
Peter Conway said that the CTU has met with the Reserve Bank officials to advise them of current trends in wages and has emphasises the significant variation in wage settlements in different sectors and enterprises.
“This indicates that although wages are slowly trending upwards, there is no evidence of a strong and generalised reaction to the spike in consumer prices,” said Peter Conway.
“The Council of Trade Unions believes that real wages have to rise over a considerable period so that we can retain skilled labour and improve incomes for ordinary New Zealanders. This is best achieved when there is economic growth and improvements in labour productivity.”
For further information contact Peter Conway (040 80386 or 025939 748