24 Aug 2005

Tongan strikers claim business backing in worsening stand-off with government

8:34 pm on 24 August 2005

Striking public servants in Tonga have reportedly got the backing of much of the business community.

This comes after the government refused the latest offer by the workers to go back to work.

The union offer was that, with a mediator about to bring the parties together, they would return to work as long as the demanded pay increases of up to 80 percent are met until a pay review was completed.

Our correspondent, Mateni Tapueluelu, says the rejection angered the strike organisers who intend now to make more use of the political and business backing they have.

He says the small business operators, particularly, have discreetly supported the strike, but are now willing to take a more prominent role.

"They have made it clear in their meetings that they will reject any order, or government vouchers, until the demands of the civil servants are met. They have also indicated in their meetings that they will not pay out any of their containers in the customs area because that is how the government. So the bottom line is to starve the government financially."

Meanwhile, the government says taxpayers would suffer if it agreed to the huge salary increases demanded by striking public servants.

It also says it would be inflationary.

In a statement, the Government says paying between 60 and 80 percent more would mean that the 4500 workers on the state payroll will take 76 percent of all public revenue.

It says this would leave just 24 service for services for the more than 98,000 people in the country.

It says the demand is most unreasonable from an economic management point of view.

The Ministry of Finance says it would lead to inflation of up to 14 percent and an estimated budget deficit of 15 million US dollars.