Strikes clobber Australian pay plan

Australia has emerged from its most recent series of strikes and trade union activism with its national wage system in tatters. Many observers inside and outside government are worried that the current labor strife will undermine the country's blossoming "resources boom."

In recent weeks transport strikes have severely affected five of Australia's six states, forcing three of them to declare emergencies to try to move essential foodstuffs.

Many retail food outlets have almost bare shelves. Mail deliveries are way behind schedule. Fuel shortages have delayed aircraft and threatend motor transport. And public bus services have been hit -- all this in the middle of the Australian winter.

The situation became so acute that Prime Minister Malcolm Fraser delayed his departure to attend the royal wedding in England to try to patch up the labor unrest. He ultimately did attend the extravaganza -- but possibly at the cost of destroying a tough new stance against wage increases.

Over the past year average weekly wages have increased more than 14 percent, despite desperate efforts by the federal government to keep wages under the inflation rate.

In recent months it has persuaded the Commonwealth Conciliation and Arbitration Commission -- an independent wage-fixing panel that sets minimum rates for federal unions -- to severely limit wage increases.

Until recently the commission was prepared to grant semiannual adjustments in wage rates to take account of official cost inflation increases. It was also prepared to hear cases by individual trade unions seeking to prove special circumstances such as increased productivity, or increases in work value.

The commission, howeveR, bowed to pressure from the federal government and adopted a system designed to put severe limits on wage increases.

Yet the new system has been shattered virtually before it could be put into effect following the confrontations between the transport and telecommunications workers and the federal government.

Transport workers have emerged with an additional A$20 ($ US22.40)-a-week pay increase. This will extend beyond the 50,000 transport workers to many other trade unions who regard themselves on a footing equal to the transport unions, or better.

The federal government worries that the raise given these workers could ignite a general wage explosion,threatening what appeared to be a bright economic outlook for Australia.

Figures released last week showed that the country's inflation rate over the past 12 months has run at 8.8 percent, almost 2 percent below the inflation rate of a year ago. Gross (nonfarm) domestic product increased 5.6 percent over the year, the highest among Western countries in the period.

But government ministers recognize that all this could be jeopardized if large wage increases are pushed through. Their difficulty is that they have few weapon's to fight the increases, and events over the past few weeks have shown that the government and the Arbitration Commission are not in a position to resist concerted union demands, backed up by determined strike action.