Unions in New Caledonia have secured a 4.2 percent increase of the lowest salaries from January 1, 2023.

The concession by the employers’ organisation MEDEF was announced as a large crowd rallied for a general strike outside its offices in Noumea.

According to police, 1500 people had gathered to press their demands while the unions said they mobilised 5000 members.

The unions had sought an across-the-board pay increase of six percent in the private sector to offset the impact of inflation, which in November was 4.4 percent.

The wage hike applies to those earning between the monthly US$1440 minimum pay and those earning up to US$1775.

MEDEF said inflation has hit businesses hard as production costs are rising faster than product prices, in particular with the rise in the cost of energy.

MEDEF said the social partners became aware early on of the negative impact of imported inflation on the purchasing power of New Caledonians.

It said that as early as May it and the unions unanimously and jointly asked the government to hold a conference on wages.

MEDEF said since April there had been proposals for tax reform which combined economic recovery and resetting of net wages.

It said raising wages had therefore always been a key aspect of the planned tax reform.

The government plans to hold a conference next week to discuss reforms in view of the crisis facing public finances.

This article is republished under a community partnership agreement with RNZ.