Labour battles to keep business on side

UNMOVED: Margaret Wilson

By Graeme Hunt

Three planks of old-style Labour policy - higher tax, more power to the unions and state-dominated accident insurance - became law within months of the coalition winning office.

The higher tax rate - 39c in the dollar for people earning $60,000 or more a year - had been well signalled before the general election and was accepted by the public, albeit reluctantly.

The same could not be said for the renationalisation of accident compensation and the Employment Relations Act. Both were fought strenuously by business lobbies but for the most part the government was unmoved.

The promise of lower levies quietened some of the critics of the return of the ACC monopoly but the ERA attracted widespread hostility, including some from traditional Labour supporters.

The toughest debate was over the status of independent contractors and the fears by some they would be forced to become employees under the new act.

The government retreated on that but in most other aspects, including the controversial "good-faith" bargaining that can require employers to open their books during pay negotiations, Labour stood firm.

Labour Minister Margaret Wilson was unmoved by business outrage just as she was over criticism of changes to matrimonial property, guardianship and inheritance law.

By November, the pressure on Labour was beginning to ease and business confidence starting to improve.

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