Cullen forfeits union loyalty with wage comments

Unions are bristling at Finance Minister Michael Cullen's calls for wage restraint, and want to speak directly to him about what they describe as his "unfortunate" comments.

The unhappiness in one of Labour's traditional support bases was triggered by Dr Cullen this week echoing Reserve Bank Governor Alan Bollard's fears that high wage demands will add to inflation pressures.

Dr Cullen said workers shouldn't automatically expect wage and salary increases to compensate for inflation, which is forecast to remain above the Reserve Bank's comfort zone of 1 to 3 per cent for another year.

But in backing the Reserve Bank's view, Dr Cullen has upset union leaders who appear set to ignore the warning.

Engineering, Printing and Manufacturing Union (EPMU) national secretary Andrew Little said he was surprised to see such comments coming from Dr Cullen.

"How much thought was given to the comments before they were made, I couldn't tell - but in the broader context of things, I don't think it helps at all," Mr Little said.

The EPMU will continue with its campaign for 5 per cent pay rises.

Mr Little also said the EPMU understands the Reserve Bank's and Dr Cullen's concerns, but "the reality is that wages are too low here".

"If we don't do anything about it, we're going to be uncompetitive, our labour market will be uncompetitive, especially compared to Australia."

The Council of Trade Unions (CTU) has already made clear its unhappiness with Dr Cullen's comments , and plans to speak directly to him about the issue.

CTU secretary Carol Beaumont said it was unfair to expect workers to "magically deal with inflation by themselves".

"If we were seriously looking at trying to match the cost increases, then there would be wage claims a lot higher than they are," she said.