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ALOFI, Niue (Niue News, July 16) - Budget knives are being sharpened on Niue, as the country awaits a decision on whether or not to slash the wages of government employees.

Government workers constitute 98 percent of the workforce on Niue and many are reported to be unhappy at any reduction to working hours.

The island's budget goes to Parliament within the next few weeks and Finance Minister Toke Talagi faces the task of reducing a deficit in the recurrent budget, strained by the devastating Cyclone Heta.

The budget is predicted to be NZ$19 million (US$12.4 million) with a deficit of around NZ$1 million (US$657,000).

Mr Talagi said this week that the government, as it has done in the past two years, is considering reducing workers hours in a bid to cut the deficit. But he added the government would not cut the hours of public servants if it undermines the island's welfare.

He said a 32-hour week, or a nine-day fortnight, are some of the options being considered.

But a leading Opposition member of parliament, O'Love Jacobsen, reckons the Government should not consider cutting public servants wages unless Cabinet Ministers accept a corresponding reduction.

Mrs Jacobsen said she has no objection to such cuts but added the leaders would have to set the standard.

Reducing the hours of public servants is one solution to the island's money problems but with most of the workforce on the government payroll, private labor is virtually non-existent.

The Auckland based Reef Group, that has recently made a massive investment in fish processing, nonu and vanilla orchards, has indicated to government it needs regular supplies for the organic vanilla and nonu processing plants. Reduced hours for public servants would allow them a day a week to cultivate nonu and vanilla.

Economic benefits from the new initiatives are likely to take several years; it has been estimated that fishing alone could put $9 million - or half of the annual budget - into the government coffers annually.

Apart from its multi-million dollar Cyclone aid, New Zealand will this year pump $8.5 million into the tiny state, which has a population of 1,300.

The Niue government provides residents over the age of 60 with a $100-a-month pension and families with annual child allowances.

July 21, 2004

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