25 Aug 2006

Solomons opposition fends off pay rise criticism

1:43 pm on 25 August 2006

The Solomon Islands Opposition says the Central Bank is late in commenting on the massive payrises for public servants and MPs.

The timing of the salary hikes has been criticised by the Governor of the Bank, Rick Hou, who says the government's finances and the overall economy are still recovering.

Mr Hou says the payrises will force the private sector to increase its production costs to meet employees' demands for higher wages.

But the opposition leader, Fred Fono, says if the bank had something to say it should have done so earlier.

"The Central Bank should have assessed the situation right from the start when these words were given and made some public statement or made some approaches to the government to halt the actual implementation of the pay increases."

Mr Fono says the government needs to broaden its economic base to raise enough revenue to meet its payroll demands.

The pay rises more than doubled the salaries of the prime minister, his ministers, the opposition leader and ordinary MPs.