21 Jan 2004

Solomons Central Banker says not right time for workers to get pay rise

4:31 pm on 21 January 2004

The Governor of the Solomon Islands' Central Bank says the country cannot afford to go ahead with hotly debated public-sector pay rises.

Against the wishes of the Australian-led Regional Assistance Mission, the Solomons' Cabinet has agreed to a two point five percent back-dated pay rise and a backdated eight percent cost of living allowance.

Unions say they expect the agreement to be finalised when a Memorandum of Understanding between it and the Government is signed shortly.

Rick Hou, the Central Bank Governor, says he would like to see public servants get a pay rise, but it's not the right time.

"I think the Government is in a dilemma here in the sense that on one hand In think it can sympathize with demands - to my thinking it is quite a legitimate sort of claim, but on the other hand it just doesn't have any money to pay the claim - it's going to be quite substantial if the Government is going to pay this - it doesn't have the money to do that"

Rick Hou says donor countries are worried and any commitment by the Government to the pay rises would bring uncertainty to all-important ongoing donor support.