29 Jun 2010

Westpac workers seek inflation-proof wage rise

11:24 am on 29 June 2010

Workers at Westpac began negotiations on Tuesday to try to have their pay rises inflation-proofed.

The bank workers' union, Finsec, wants a 5% pay rise and a guarantee from the bank to top up wages to match future inflation rates.

Finsec spokesperson Andrew Campbell says inflation-proofing wages would cost Westpac 3% of the $125 million profit it has made so far this year.

The Treasury has predicted inflation will rise to 5.9% next year.

An economist from Economics New Zealand, Donal Curtin, says inflation-proofing was more common in the 1960s and 1970s when inflation rates were soaring above 10%.

Next year's forecast inflation rate is likely to be a one off, he says, due to the impact of a GST rise and the Emissions Trading Scheme.