Unions to push for 5pc pay rise

Unions are promising a reawakening of industrial militancy this year as manufacturing workers, backed by colleagues in other sectors, take advantage of a tight labour market to demand a 5 per cent pay rise.

But last night the National Party warned against possible strike action, saying workers should push the Labour-led Government for tax cuts instead.

Council of Trade Unions president Ross Wilson, in Auckland yesterday for the launch of a wages push by the 51,000-member Engineering, Printing and Manufacturing Union, said workers were hungry for a fairer share of economic growth.

"Workers have been patient but that patience is running out," he said.

"By being tight and greedy, many employers are forcing greater militancy in their workforces, and unions are ready to harness that anger and push for a fairer share."

Mr Wilson's warning came with an announcement from the EPMU, the country's largest union, that it will accept no pay offers below 5 per cent in any sector until a key collective employment agreement covering more than 2000 metals industry workers is renewed.

"All bargaining that does not come up to that level is suspended," union secretary Andrew Little said in response to a breakdown of negotiations with representatives of about 220 engineering firms.

"What you are seeing today is the start of a long and determined campaign to secure a fair share for New Zealand working people."

He would not comment on the likelihood of strikes or similar disruption, saying these would depend on the employers' response to a second round of mass stopwork meetings, starting with one in Auckland on Thursday.

Mr Wilson said the CTU saw 5 per cent as a bare minimum, and would not stand in the way of workers seeking more in areas of particular skills shortages.

In a similar move last year, the engineers' union froze about 270 sets of negotiations to put pressure on the metals employers for a 3 per cent pay rise, but accepted 2.9 per cent after more than a month of instability including mass stopwork meetings.

Although serious skills shortages were already emerging then, the Government's labour cost index revealed that salary and wage rate increases for the year (including overtime) of 2.5 per cent trailed inflation running at 2.7 per cent.

This year, in a more buoyant economy and with an 18-year low in unemployment making it even harder for firms to recruit staff, the union is raising the temperature with stiffer demands and support from the wider labour movement for a concerted wages push.

The union entered the metals negotiations last week claiming a hefty 7 per cent rise, but reduced this to 5 per cent after the employers removed a counter-claim over holiday entitlements.

But the talks collapsed on Thursday when the employers, represented by the Northern Employers and Manufacturers Association, insisted 3.2 per cent was their best offer.

Mr Little has since won pledges of support for a public campaign for higher wages from the other big private-sector unions, the Distribution Union and the Service and Food Workers Union, and from the CTU's governing affiliates council.

His union has also told Labour Minister Paul Swain of the campaign, although the minister was not commenting last night on how it may affect support for the Government in an election year.

Mr Little and Mr Wilson said the timing of the campaign in election year was coincidental, and the political cycle was no reason to deny workers their just deserts.

"I think the Government agrees wages in New Zealand are too low," Mr Wilson said.

"Even National Party leader Don Brash has pointed out that pay rates in Australia are on average 25 per cent higher than in New Zealand."

National's industrial relations spokesman, Wayne Mapp, said unions should campaign for lower taxes to leave more money in the pockets of every worker.

He said it was "the tax-and-spend Labour Government" which was denying union members a fair share, and he hoped the 5 per cent campaign would not spark a return to strikes with little regard for the viability of individual businesses.

Northern employers association chief executive Alasdair Thompson did not want to discuss negotiations to which his organisation was a party, but said the Government was the main beneficiary of the thriving economy and should cut its tax take accordingly.