31 Jul 2014

Labour to set up wages inquiry

7:24 am on 31 July 2014

The Labour Party has announced it would set up a Commission of Inquiry into wages and collective bargaining if it is elected to Government.

David Cunliffe.

David Cunliffe. Photo: RNZ / Diego Opatowski

It released its work and wages policy in Porirua, near Wellington on Wednesday afternoon.

Labour leader, David Cunliffe said the Commission of Inquiry would investigate workers' and employers' experiences with a view to developing labour market regulation, including fair wage-setting and quality workplace relationships.

He said Labour would also raise the minimum wage to $16.25 an hour in April 2015 and get rid of 90-day trials.

"We kind of need to go back to first principles because it's been a long time since the Emplyment Contracts Act, which was a disaster, then the Employment Relations Act, which made some improvements, but which has gone backwards since the change of government. We need a fresh look, we need to go back to first principles," Mr Cunliffe said.

Labour Minister Simon Bridges said if it was not based on increased productivity, simply paying people higher wages was a cost that gets passed on to New Zealanders as higher taxes, reduced competitiveness, inflation and fewer jobs.

He said Labour's policy would cost 6000 people their jobs.

But Council of Trade Unions president Helen Kelly said that was rubbish.

"There is proven in research that there isn't a correlation between lifting wages to a reasonable level and economic growth," she said.

"In fact, lifting wages can support economic growth and ensure that particularly New Zealand's small businesses have some customers to buy their things."

The National-led Government had continually let down people on low wages, Ms Kelly said.