The New Zealand Government has serious concerns about the financial implications for Tonga of the settlement of last year's six-week strike by public servants which promised 80 per cent salary increases over two years.
The concern is expressed in the Government's response to the parliamentary select committee inquiry into Tonga, whose report was released during the unprecedented strike.
"This has serious implications for the Tongan economy," the Government said in the response issued yesterday.
"It is predicted that the full impact will be evident in mid 2006."
It says the Tongan Finance Minister is pursuing major economic reforms "including public sector restructuring" in order to make the strike settlement affordable.
The report does not elaborate on what "the full impact" means but any unrest caused through unkept promises could coincide with the Pacific Islands Forum that Tonga is scheduled to host in August.
The inquiry by the foreign affairs and defence committee was won last term by Matt Robson, a Progressive MP at the time and a veteran agitator for democratic reform in the tiny Pacific constitutional monarchy.
But there were concerns in the Government that the inquiry could damage relations with Tonga and be seen as interfering in its domestic affairs.
The result was a carefully worded report that avoided outright criticism of the kingdom.
The same sensitivity has been shown in the Government's response.
"New Zealand is a good friend and neighbour of Tonga and a dedicated member of the Pacific community.
"The New Zealand Government has assured Tonga that it is ready to respond positively to requests for assistance, alongside others who are ready to help - Tonga's Pacific friends and neighbours, the Pacific Islands Forum and the Commonwealth."
It says Tonga is a proud, sovereign, independent country.
"Tonga and its people must own the challenges and the solutions to the situation it faces."
The Government backed virtually all the committee's recommendations, from welcoming a diplomatic presence of Tonga in the capital to assistance in opening up trade and greater contact between the judiciaries of both countries.
Foreign Minister Winston Peters, who has a particular interest in the Pacific, said yesterday that the Government had welcomed the fact that the committee had focused on economic development.
"New Zealand supports economic and democratic reform in Tonga," he said.
"The Government recognises that it is Tonga that has to find workable solutions to the problems it currently faces.
"Solutions cannot be imposed on Tonga from outside."
New Zealand provides substantial development assistance to Tonga, focused on education, governance, health, resource management and trade development.
Mr Peters is planning to visit the kingdom in the next few months.
Bitter dispute
* The public servants' strike pressed for democratic reforms as well as better pay and ended only after the intervention of the King's daughter, Princess Pilolevu.
* The settlement included a proposal for a royal commission on democratic reform as well as across-the-board increases of 80 per cent over two years.
Government fears more unrest in Tonga
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