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HARARE - Zimbabwe's unity government is broke and cannot afford to match union demands for higher salaries, Prime Minister Morgan Tsvangirai has told a May Day rally.
"This government is broke," Tsvangirai told the crowd of union members on Friday.
"We are only able to pay you allowances. All of us, from President Mugabe to government workers, are earning a 100 dollars," he said.
Tsvangirai said the state wished to increase the 100 dollars allowance paid to state workers but could not afford to meet growing demands for better wages.
"No one is paying tax at the moment. If the government does not get taxes, where will it get the money to pay salaries?" he asked.
"Your demands must be realistic and within the capacity of the government, which is the major employer."
Before Tsvangirai spoke to the crowd, the Zimbabwe Congress of Trade Unions threatened to go on strike unless wages were increased to 454 dollars.
"You supported us during hard times, we will pay you back," Tsvangirai said, less than three months after taking office in a power-sharing pact with former rival President Robert Mugabe.
Zimbabwe's government is seeking 8,5 billion dollars over three years to revive the economy that has been shattered by a decade of hyper-inflation, but major donors have said they want Mugabe to enact concrete reforms.
Human Rights Watch said donors should withhold development aid until Zimbabwe improved its rights record by cracking down on violence on white-owned farms and ending police intimidation and arrests of activists. - Sapa-AFP