PSA fights for 22% cost of living adjustment

The Tongan Public service Association has submitted a new proposal for a 22 percent cost of living allowance.

The PSA submission was made to Finance Minister Dr ‘Aisake Eke on January 24.

Hon Eke said he will submit it to cabinet, according to PSA.

The Tongan government recently approved a five percent allowance.

The PSA said its claim was a compromise between the 23% calculated by National Reserve Bank CEO Dr Ngongo Kioa and the 20% recommended by the Ministry of Finance, which was based on the rate of inflation since 2005.

PSA secretary Mele ‘Amanaki said the Finance Minister agreed with their figure. If the government did not approve a 20-23% COLA now it would have to spend more money in the future.

After a six week strike by PSA officers in 2005 the Tongan government announced pay rises of 60-80 percent, funded by cuts in government services.

Approving the five percent COLA early this month, Tonga’s Deputy Prime Minister, Hon Samiu Vaipulu, said the government initially approved 20 percent, but the World Bank advised against this, citing the country's financial difficulties.

The PSA secretary claimed the IMF and World Bank reports only looked at quick ways of cutting expenditure. They did not give advice on government spending.

A World Bank spokesperson told Kaniva News: “As part of the World Bank's financial and technical support process to Tonga, we have an on-going dialogue with the Government on any upcoming fiscal and economic pressures and challenges.

“In this particular case, the World Bank's role was to provide technical analysis examining the costs and budget implications of different pay scenarios in order to inform the Government's decision making process.”

The PSA has made a number of recommendations to the Public Service Commission about areas from which funds could be recovered or increased.

It said the money paid to Tongasat – an issue first raised in Parliament and the subject of a series of legal battles involving Opposition leader ‘Akilisi Pohiva – should be returned. The money was transferred in two tranches of TP22 million ($NZ14 million) and TP32 million ($NZ21 million) in 2008 and 2011 .

The PSA recommended that all revenues from sale of the Tongan passports to foreigners in the past 15 years be collected.

It also said share dividends from profitable public enterprises should be increased from 10% to 50% from it in order to return profits to the people of Tonga.

‘Amanaki said the PSA supported the high level of benefits paid to employees in public enterprises, even though these were higher than those paid to pubic servants.

However, it did not support the level of benefits paid to members of the enterprise’s boards of directors, who, she said, only worked during board meetings and at official social functions.

The main points

  • The Tongan Public service Association has submitted a new proposal for a 22 percent cost of living allowance.
  • The PSA submission was made to Finance Minister Dr ‘Aisake Eke on January 24.
  • The Tongan government recently approved a five percent allowance.
  • After a six week strike by PSA officers in 2005 the Tongan government announced pay rises of 60-80 percent, funded by cuts in government services.
  • The PSA has made a number of recommendations to the Public Service Commission about areas from which funds could be recovered or increased.
  • These include recovering money from the sale of Tongan passports and returning the TP54 million paid to Tongasat.

L-R: PSA Secretary Mele 'Amanaki, Finance Minister Hon 'Aisake Eke and Vili Vete a PSA Executive Member. Image Source: PSA

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