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Fair Pay Agreements – a no-brainer

Written By: - Date published: 1:09 pm, June 8th, 2018 - 32 comments
Categories: business, Economy, wages, workers' rights - Tags: ,

CTU President Richard Wagstaff has a great opinion piece in the Dom Post this morning pointing out why Fair Pay Agreements are good for business as well as Kiwi workers:

Remember when you could pay a mortgage, keep the kitchen cupboard full, take the kids to the movies now and then, by working as a bus driver, a freezing worker, a journalist, or any number of other solid middle-Kiwi jobs? When a decent working life was a given?

Too far back to remember? Maybe you’ve noticed how just across the ditch our cousins with all kinds of everyday jobs seem to be that much better off than us?

The difference between then and now, and between Australia and New Zealand, is sector bargaining. This used to be called awards here. In Australia, sector bargaining is called modern awards; in other parts of the world it takes the shape of industry agreements or tripartite national bargaining. What it is in all of these places is a system to deliver minimum standards. Minimum standards agreed between employers in an industry and the people who work for them; sometimes the government is involved as well.

The advantage for working people is they don’t have their wages and conditions systematically driven down by businesses competing on how cheaply they can subcontract people’s work. Like we’ve seen in the forestry and service industries. And they don’t have their terms and conditions that they’ve negotiated in good faith over years contracted out from underneath them. Like we’ve seen in the transport and telecommunications industries.

The advantages for employers are that they can invest in skills and training, and plan to increase their productivity over the medium and long term. They’re not forced to compete with businesses running fly-by-night operations based on low wages and insecure jobs. And they can invest in new plant and machinery and innovation – things that take time to pay off – knowing they aren’t going to be undercut by low-tech outfits run on a cheap labour and low-investment model. Not to mention the fact that more Kiwis with better incomes have more money to spend at our Kiwi businesses.

The full piece is here

32 comments on “Fair Pay Agreements – a no-brainer ”

  1. Hear hear !

    The points raised above work towards a balanced , prosperous society whereby in real terms those same working people have more discretionary income therefore supporting local product and affording imported goods.

    But ! , … you try and tell that to the deliberately on purpose contrarian neo liberal and, … as Mark Twain put it… ‘Never argue with an idiot. They will drag you down to their level and beat you with experience’.

    • patricia bremner 1.1

      What they also do is argue for less or smaller Government, and because as wages slide so do taxes.

      They then talk “tax cuts” which are really “public service cuts”.
      BUT…. come a crises caused by under funding and smaller Government spend, “Hello hello” they want the Government to pay from the tax “public purse”

      Have they saved 3 months worth of their tax cut to help with that?? Of course not!!
      But thee unemployed are meant to have 3 months saving from their miserable pay before they get anything from the Public Purse.

      I was pleased to see the Government asked the farmers to foot a third of the bovis problem. That is fair.

  2. Gosman 2

    Why is the Australian economy not doing as well as ours recently then?

    • Stuart Munro 2.1

      The long term ill effects of Turnbull’s misgovernance are starting to come through.

      • patricia bremner 2.1.1

        They have allowed under cutting to a lesser degree. Mining was the basket with all the eggs. It is picking up slowly.

        • Bewildered

          Mining and China demand for minerals is the reason wages are high, this sector has pushed the lucky country wages for labour sky high especially unskilled labour, hence au will lead the world in replacing low skilled labour with robotics and automation over the next few years Thunking that the sole reason wages are high is due to unions is naive and 19th century thinking

    • McFlock 2.2

      They’ve started trying to copy us.

    • You may be talking along the lines of the extreme macro economics speak economists are so fond of Gosman , however in real terms regarding peoples average wages there is no comparison in the take home pay and its purchasing power of an average Australian service industry worker and his / her NZ contemporary.

      Also , economy of scale is different . NZ struggles maintain and own a few frigates. Australia owns aircraft carriers.

      However , that said , NZ was ahead of the Australians in the late 1960’s and early 1970’s regards wealth per capita of population.

      That all changed post 1984 with the treacherous introduction of neo liberalism. Since then it has become progressively worse for many NZ’ers family’s and their children.

      Whole generations have grown up in poverty because of it. There are now over 650,000 ex pat New Zealanders that now more or less call Australia home as a direct result of the destruction of Trade Unions and the award rates and conditions . They voted with their feet. And still nothings changed in this country of any honest description.

      I get sick and tired of having to constantly repeat these facts and the historical reasons for poverty in this country to you Gosman , and reading your bloated lies. And as Mark Twain so aptly put it , …

      … ‘Never argue with an idiot. They will drag you down to their level and beat you with experience ’ …

      You Sir , are an idiot.

      • Cricklewood 2.3.1

        Yet there you are arguing…. it reminds me of a similar anecdote.

        What do you have if you argue with a fool?

        Two Fools.

      • edgil 2.3.2

        Wild Katipo. Thanks.

        • OnceWasTim

          Goz is either scared or really arrogant – probably the latter.
          It’ll jump up and bite him in the bum one day, whereupon we’ll all be expected to acknowledge his being a victim and ‘deserving’ of sympathy and compensation for the ‘personal responsibilty’ he took in making his ‘life’s choices’ (of course, going forward).
          I’m truly in awe of his wisdom. Gee, I wish I’d done the same thing (/sarc)

      • Draco T Bastard 2.3.3

        Also , economy of scale is different . NZ struggles maintain and own a few frigates. Australia owns aircraft carriers.

        You do understand that we could easily build our own aircraft carriers right? We have all the resources and skills to do so.

        However , that said , NZ was ahead of the Australians in the late 1960’s and early 1970’s regards wealth per capita of population.

        That all changed post 1984 with the treacherous introduction of neo liberalism. Since then it has become progressively worse for many NZ’ers family’s and their children.

        Well, actually, that started to change back in the late 1960s early 70s as capitalism once again failed. Britain stopping the guaranteed import of our exports pretty much brought us to our knees. The oil price shocks were the death knell.

        Neo-liberalism was the result despite the fact that it hadn’t worked in the 19th century either. It was the government acting to protect rich people from reality.

      • alwyn 2.3.4

        “Australia owns aircraft carriers.”.
        What current aircraft carriers does Australia own?
        They owned a few in the past but as far as I know they have none in commission and none in reserve at the moment.

        There are, I think, only 8 countries that actually have operational carriers at the moment and more than half the world’s carriers are owned by the US.
        Nobody else can afford the real thing of a nuclear powered carrier task force.

        I have vague memories of an estimate that a carrier task force on the US scale would cost about $25 billion to build and about $2.5 billion a year to operate. I have no idea whether these numbers are accurate though.

    • Nick 2.4

      But ! , … you try and tell that to the deliberately on purpose contrarian neo liberal and, … as Mark Twain put it… ‘Never argue with an idiot. They will drag you down to their level and beat you with experience’.

  3. RuralGuy 3

    I’m not sure a self interest piece written by a union staff offical should carry any weight.

    We are an export nation, our competitors are not domestic. Increasing fixed costs (not just labour costs as you’ll note that the employer advantages also increase cost) relative to international competitors reduces sector wide profitably as the exported produce is no more valuable. Like it or not, we’re in a global economy.

    We have existing labour laws that deal with the laggards, and the ability to legislate for a national minimum wage. These are the tools to deal with employers doing the wrong thing domestically.

    If this is the best and compelling reason for sector wide agreements, then it is a concept doomed for failure as even “blind eddy” would be able to see that this is a short cut to increased unemployment in an export dependant economy.

    • SPC 3.1

      And yet … the major cost for farming is the mortgage, yet land owners want foreign investors in the market to bid up the price and this cost to farming – presumably to subsequently obtain their major return from their work as untaxed CG on farm sale.

      Labour costs are rather secondary to debt finance cost as a constraint on land ownership based export industry profits (and in the case of dairy, automated milking is the future in any case).

    • … ‘ Increasing fixed costs (not just labour costs as you’ll note that the employer advantages also increase cost) relative to international competitors reduces sector wide profitably as the exported produce is no more valuable ‘…


      Yes I’m sure competing with sweat shop labour is difficult. So also is not protecting our own industry’s with certain tariffs. Hence the penchant of the neo liberal to always use that tactic to offer minimum wages and shitty conditions to remain’competitive’.

      Tell me,… there were many millionaires in NZ prior to Roger Douglas and his treason’s, – and workers had a good standard of living, as well as first rate health and education, .. so what changed ?

      Could someone of seen an angle for the exploitation of the public wealth and expropriating into their bank accounts instead? Greed perhaps?

      I think so.


      … ‘ We have existing labour laws that deal with the laggards, and the ability to legislate for a national minimum wage. These are the tools to deal with employers doing the wrong thing domestically ‘ …


      ‘ Laggards’ … interesting.

      Bill English and John Key seemed to have the same opinion of many NZ workers calling them ‘ lazy , drug addled’ … which of course justified them importing cheap labour from overseas by the truckload by an irresponsible open slather immigration policy…

      This at a time of relatively high unemployment figures for New Zealand born citizens ,… those same ones who wont work for the pathetic excuses for wages that many skiving employers had on offer… and conditions enabled by successive neo liberal govts… again, motive ?

      Greed and exploitation.

      And speaking of which,… just WHY were there so many , many prolific reports of skulduggery and worker abuse and exploitation during the Key years ( and even now ) if there are ‘ tools to deal with employers doing the wrong thing domestically’?…


      … ‘ If this is the best and compelling reason for sector wide agreements, then it is a concept doomed for failure as even “blind eddy” would be able to see that this is a short cut to increased unemployment in an export dependant economy ‘…


      And so now this seems like the classic neo liberal scare tactics of ‘ increasing wages causes unemployment ‘,… which is complete and utter tosh. The mere fact many employers are touting negotiating with unions / award rates / minimum standards as a good thing completely rubbishes those clapped out tired old diatribes that have been rammed down peoples throats for three decades.

    • saveNZ 3.3

      What SPC said…

      and also our other economy boom seems to be in construction which is not an export and based on disasters and immigration Ponzi….

      It is very pricy to build in NZ, because we export many of our materials making little profits for NZ and seem to buy them back at high prices… while subsidising cheap imported labour and materials which go wrong aka leaky building, while subsidising all the infrastructure and health/education/WFF/AS/ new workers need and the welfare bills of for the workers without proper work or training that are left.

      We call ourselves an export nation, but are we really? An exporter of highly skilled people for importing in cheap low skilled ones perhaps…. sadly NZ has got so dysfunctional after Rogernomics that rather than having doctors and nurses as our essential skills and trying to keep our best and brightest here in NZ, some of the highest skills for people migrating here under the Natz was chefs, Restaurant managers, level 5 IT, truck drivers and so forth. All low wage workers… meanwhile driving out Kiwis born who have to work to pay off student loans while they hope for a job in their field to come up…

      Somehow locals have become so discriminated in their own country. From state houses to making Kiwis historically paying massive student loans. Rather than choosing to wipe out student loans to citizens that live here, our government is giving one year of free study to new residents to get that ‘chef’ degree or whatever they want, whose families often have never paid a cent of tax in this country.

      Something is wrong with how our government discriminates against it’s own citizens born here and seems to be all milk and honey (literally) to those who have just arrived and of course have a lot more money, not being saddled down with student loans and massive interest rates, from the 1990’s in particular…

    • Draco T Bastard 3.4

      Increasing fixed costs…

      The costs exist. They’re actually physical.

      What you’re actually demanding here is for those costs to be ignored so a few people can make a higher profit. This, of course, increases poverty.

      We have existing labour laws that deal with the laggards, and the ability to legislate for a national minimum wage.

      And they’re not working as the increasing amount of poverty over the last 30 years proves.

  4. Tamati Tautuhi 4

    Nationals tax cuts covered by the GST increase hammered the lower socio economic groups.

    • edgil 4.1

      NZ was the test ground.
      Listen to “The American System” podcast by Webster G. Tarpley.
      It is all being rolled out stateside now.

  5. patricia bremner 5

    Richard, We can only hope this will reverse the death spiral of under cutting wages.

  6. Herodotus 6

    With Teachers we already have sector bargaining with “strong dominate” unions. Yet we have teachers with the same experience same skill base doing the same job teaching “mirror” classes yet there can be over $16k difference in pay. One has a masters degree the other a diploma.
    If the teachers unions cannot have equal pay for the same job, then how on earth are we to have “Fair Pay Agreements” ?

  7. Dazzer 7

    It is a tad ironic to say the least for anyone on the left to want to compare with Australia.

    Australia has made its relative fortune in large part through exploiting natural resources.

    There is nothing like the left wanting Australian wages on the one hand yet arguing (ok, implementing directives without any advice) on policy that prevents NZ from earning the income you want.

    • One Anonymous Bloke 7.1

      The increased productivity since the Douglas/Richardson vandalism could easily be shared more equitably, and you are incapable of understanding that, because you can’t think for yourself.

      Polly wanna cracker?

    • Stuart Munro 7.2

      “Australia has made its relative fortune in large part through exploiting natural resources.”


      • One Anonymous Bloke 7.2.1

        It’s kind of comforting, the way these dupes swallow and then belch up the talking points they’ve been spoonfed.

        Hodson & Busseri redux.

    • Draco T Bastard 7.3

      Selling our resources offshore simply makes us poorer and will leave us unable to support ourselves in the medium to long term. There’s already a very real example of such stupidity.

      We need sustainability and digging up our resources and exporting them doesn’t give us that. Even farm exporting cuts into that needed sustainability by exporting necessary resources.

      As the economists say: You can’t have your cake and eat it too.

      And we’re busy scoffing it down.

      On the other hand, R&D will. R&D gives us an export that doesn’t use up our resources while also allowing us to produce what we need from our own resources.

      All of this is called: Living within our means. Which National is noted for saying but always ignores as they eat the cake.

  8. Jackel 8

    The trend in this country for the past 30 odd years has been to attack workers and their pay and conditions as a way to increase profits, rather than looking at ways to improve what a business does. So as a way to change this trend fair pay agreements are a good idea.

    As for the natural resources argument, am I assuming too much to say you have a brain? Japan for instance.

  9. millsy 9

    Australia can probably afford to dig stuff up. Most of its resources are in places which aren’t value to anyone.It also helps that the benefits of the extraction industry are shared throughout the Australian economy. It’s probably easier to get a job in the morning industry over there than it is here. Plus the profits don’t get hoovered by by US and Canada and companies like they do here.

    • Observer Tokoroa 9.1

      Australia is a very wealthy Nation. Gifted with untold valuable resources and a hard working, skilled population.

      It can afford Several Sovreign States.

      Unlike Australia, New Zealand workers are NOT protected from various forms of slavery introduced by Capitalist Governments within the past thirty years.

      Using various mechanisms, New Zealand Capitalists proportionately pay far less Income Tax than NZ Workers. Farmers pay next nothing of Income tax. Because Farmers vote Capitalist.

      But the Capitalists have over- played their Greed. Not even 60% of Kiwis can afford to buy a house. They will never own one.

      Even more Kiwis will struggle to pay their exorbitant rents.
      Homeless – is the new zealand of now.

      It is no wonder that nearly one Million Kiwis prefer to work in Australia. Where they are not treated like Slaves of the stinking filthy Capitalists that screw the once fine people of

      It is unlikely that NZ Capitalists will be able to sustain their Crimes against Humanity for much longer. For they will never break their accord with GREED.


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