TUNIS (Reuters) – Tunisia’s powerful industry association on Wednesday joined unions in rejecting the government’s budget draft for 2017, challenging Prime Minister Youssef Chahed’s attempt to raise taxes and freeze public sector wages.

Under pressure from international lenders for reforms to spur growth and create jobs, Chahed has proposed a broad package of initiatives to control the fiscal deficit and increase government revenues.

The UTICA industry and business employers’ association, one of the country’s major economic lobbying groups, said it rejected a proposed exceptional tax contribution on business as a way for the government to generate finances.

“We are willing to make sacrifices but at a rate that does not threaten the survival of our businesses,” Wided Bouchamaoui, president of the UTICA, told reporters.

The UGTT trade union has already warned the government is testing social cohesion with proposals for new taxes and a freeze on state wages, a decision it said was made without negotiation.

Tunisia has been hailed as a model for democratic progress since its 2011 uprising against autocrat Zine El-Abidine Ben Ali led to free elections and political stability. But many Tunisians are demanding jobs and economic progress to match.

(Reporting by Tarek Amara, writing by Patrick Markey, editing by)