Employer Profits Under Scrutiny
Employers calling for across-the-board tax cuts should look to redistributing their own large surplus more fairly, Council of Trade Unions economist Peter Conway said today.
A recent Reserve Bank paper shows that corporate profits increased by 44 per cent from 2000 to 2004, while wages rose 8.3 per cent over the same period.
"It may suit employers to focus on the Government's surplus and tax issues rather than corporate profits and wages, but it is time that the employer surplus was put under real scrutiny," Peter Conway said.
The Reserve Bank bulletin's findings mean that 160,000 employers in the corporate sector have seen significant profit increases.
"There needs to be some discussion about how this should have been shared with workers through increased wages.
"Employer organisations supporting tax cuts need to explain to New Zealanders why profits went up by 44 per cent in four years and wages rose by only 8.3 per cent," he said.
"Why should the Government cut spending to fund tax cuts when it is the employers' profits that are the much bigger surplus?"