The PSA welcomed the election of the Kirk Labour government in 1972. It looked forward to the end of confrontation with a hostile government.
It expected genuine consultation with state sector workers. Shortly after the election, Labour made good on its promise to abolish the Remuneration Authority and restore free wage bargaining. However the PSA clashed with government ministers over several issues. In the face of rapidly rising wages and prices, the government imposed a wage freeze in August 1973 and a short-lived price freeze. There was a 6.2 per cent cost of living increase for state sector workers but the SSC broke off negotiations on all unsettled pay claims.
The PSA and the CSSO were angry that there was no consultation with state sector unions before the wage freeze was introduced. The wage freeze ended in June 1974. It was replaced by new wage controls which gave all workers a 9 per cent cost of living increase and allowed for negotiations to get an extra 2.25 per cent. Increases above that figure had to be approved by the State Services Tribunal. The CSSO said the wage controls were unfair to workers, particularly as there was no proper control of prices and profits.
(Source: Bert Roth, Remedy for Present Evils: A history of the New Zealand Public Service Association from 1890, New Zealand Public Service Association, 1987)