Wage gap with Australia didn’t happen overnight
“The wage gap with Australia started opening up many years ago and the less tax, hands off, free market solutions proposed today by the Centre for Independent Studies are pretty unimaginative,” CTU vice president Richard Wagstaff said today.
“Dump truck drivers are highlighted in the report. A report for the transport industry in 2003 showed the problems the industry faced with low wages and poor conditions. What has that industry done since then to address this?”
According to a Treasury paper wage levels fell from roughly comparable to Australia in the 1980s to 60% of their level by 2002, Mr. Wagstaff said.
“Research on the effects of the Employment Contracts Act in the 1990s on productivity shows that a lot of damage was done to not only wages but the ability to lift productivity on a continuous basis.”
Treasury noted that in 1978, New Zealand and Australian workers had about the same amount of capital per hour worked. By 2002, capital intensity in Australia was over 50 percent greater than in New Zealand.
“Employers chose the low investment route in the 1990s, and the legacy remains with us.”
“Increased collective bargaining and a greater willingness to talk at an industry level about skills, standards, wages and capital investment are the answers to lifting wage rates with Australia, not a grab bag of lower taxes and deregulation policies outlined in today’s report,”Richard Wagstaff said.