By BRIAN FALLOW
The Employment Relations Bill is raising expectations of wage increases at the same time the weak dollar is making the country poorer, says National's finance spokesman, Bill English.
"When the exchange rate drops as significantly as ours has, someone ends up poorer. Even exporters know you can't get rich on a weak currency," he told an Economist roundtable conference in Wellington.
"If [Reserve Bank Governor] Don Brash does his job, someone will end up poorer because we are poorer as a country."
It would not be the export sector, but the Government's core constituency, Mr English said.
Dr Brash said last week that wage rises to compensate for higher oil prices, for example, could only be at the expense of other New Zealanders, "since in aggregate we are all worse off."
Labour Minister Margaret Wilson told the conference that the new law was expected to result in a moderate increase in unionism levels, possibly to about 30 per cent of the workforce from the present 20 per cent, and some improvement in the relative position of vulnerable workers in wage negotiations.
"This, I hope, will lead to an increase in wages for lower-paid workers in real and relative terms," she said.
"But the emphasis on good faith means this can only be done in circumstances where the employer is able to pay and still make a reasonable return on their business.
"There will be no blowout of wages, or even an immediate substantial increase."
Deutsche Bank chief economist Ulf Schoefisch challenged her on that point. "There seems to be a feeling out there that it is time for a catch-up after 10 years of wage restraint."
Ms Wilson said wage rises could not come through unless there was an ability to pay. All the legislation did was set up a process for negotiations to be based on information, rather than industrial muscle.
"There is no obligation to reach an agreement, but all the incentives are there to keep talking, not to strike. If, in the end, you can't reach an agreement there is nothing in the legislation to require you to do so."
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