12 Dec 2014

Unions question higher wages

8:43 am on 12 December 2014

Unions are urging the Government to stop misleading the public about how much the average New Zealander earns.

Bill English delivering his budget to Parliament.

Finance Minister Bill English - speaking earlier in the year at the release of the 2014 Budget. Photo: RNZ / Diego Opatowski

Finance Minister Bill English on Wednesday told Parliament the average wage had increased by about $3000 in the past two years, to $55,700, and was forecast to climb to $62,000 by 2018.

He said that updated gross domestic product figures, which would be released next week, were expected to confirm solid economic growth.

"This is delivering benefits to hard-working benefit to hard-working Kiwis. Average wages have increased by around $3000 in the past two years to nearly $55,700."

But Public Service Association (PSA) national secretary Richard Wagstaff said far too many people in New Zealand were still on the minimum wage and struggling to make ends meet.

Public Service Association president Richard Wagstaff

Richard Wagstaff Photo: SUPPLIED

"Our experience doesn't support what he's putting up in his numbers," he said.

"Maybe the rich are getting especially rich and that's pushing the averages up, I don't know, but I can certainly vouch for the fact that thousands and thousands of people aren't paid enough."

Mr Wagstaff said the minister's comments could foster industrial unrest by fuelling dissatisfaction.

"He really needs to get consistent on that. Otherwise nobody really believes it and it is just going to create conditions for industrial disputes because people's expectations just simply won't be met at the table thanks to this kind of rhetoric."

Council of Trade Unions economist Bill Rosenberg questioned the method used to calculate the average wage.

"A more accurate characterisation of the weekly average wage is if you look at it in terms of the number of people, rather than full-time equivalents, and that is somewhat lower - that's around $47,000 this year."

Mr Rosenberg said that figure did not take tax or inflation into account. He also said any forecast was only accurate to about 18 months out and needed to be taken with a grain of salt.

Employers and Manufacturers Association (Northern) chief executive Kim Campbell said the minister's calculations may have been correct but there was more to the story.

"There are plenty of people who are doing a lot better than us but on the other hand there are lots of people doing worse," he said.

"The big problem is that the nominal headline number is not the one to take into account - but if you take tax and then the cost of housing in New Zealand out, what's left over for most people isn't that great."

Mr Campbell said the country needed to be more ambitious if it wanted to lift wages by putting more capital into businesses to make them more productive.

Mr English did not respond to a request for comment.

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