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Workers shouldn't carry can for imported inflation

June 5, 2008

Workers should not be punished for imported inflation - EPMU

New Zealand workers should not be made to pay the price of increasing inflation twice says the Engineering, Printing and Manufacturing Union.

The call follows the Reserve Bank Governor's call for lower wage claims in the face of increased inflation.

EPMU national secretary Andrew Little says workers who are already being hit with higher prices caused by international factors should not be expected to forgo the pay increases they need to maintain their standard of living.

"Kiwi workers are seeing more and more of their wages disappear into their fuel tanks and shopping trolleys every week, and telling them to curb their wage claims now is effectively hitting them with a double whammy.

"The issue here is internationally driven inflation and Alan Bollard's statements that the answer is to lower New Zealanders' wage claims shows just how inadequate the current method of controlling inflation is.

"Rather than the single blunt tool that is the Official Cash Rate, we need a variety of ways of targeting particularly inflationary parts of the economy or New Zealand workers and exporters are only going to continue to be punished for situations beyond their control.

"An alternative approach that could be used given the numbers now signed up to Kiwisaver is to have a discretionary contribution rate that would allow us to dampen down demand by diverting money into workers' Kiwisaver accounts rather than raising their interest rates."

The EPMU has led the drive for higher wages in New Zealand since the launch of its "Fair Share" campaign in 2005 and has pushed for a reform of monetary policy through the finance and expenditure select committee.


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