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Union plan to narrow wage gap with Australia

02 October 2008

Union plan to narrow wage gap with Australia

The Council of Trade Unions has put forward a plan to reduce the 27.6 percent real wage gap with Australia.

Treasury analysis released today shows New Zealand’s wage gap with Australia shrunk in the last nine years, after a 50.4 per cent gap grew in the 1990s, when the Employment Contracts Act cut wages and conditions and removed industry-wide standards in pay rates.

CTU president Helen Kelly said today that the CTU proposal includes:

• Increasing the minimum wage to two-thirds of the average wage,

• Extending collective bargaining through industry and multi-employer bargaining,

• Lifting investment in skills and technology and improve workplace practices to boost productivity,

• Building union capacity to organise low paid workers,

• Implement responsible contractor policies in the state sector, and

• An ongoing programme to close the gender pay gap.

Helen Kelly said that in the election campaign the CTU will be asking parties how they will lift wages and incomes.

The pay gap with Australia grew by 50.4 per cent in the 1990s and shrunk by 2.6 per cent since 2000.

“And we can do better than that,” Helen Kelly said.

The CTU said that OECD figures show that tax for the average worker was 21.5 percent in 2006/7 in New Zealand compared with 27.7 per cent in Australia and 37.7 per cent in the OECD on average.

“Of course tax cuts can help a tiny bit to close the gap,” Helen Kelly said. “But that risks higher levels of public debt and cuts in public services.”

“The real issue is the gap in gross wages.”


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