The Cook Islands financial secretary, Kevin Carr, says he's not suggesting that there needs to be job losses in the public sector.
He was speaking after releasing a statement which warned that the government needed to curb its levels of expenditure and control the employment of new staff.
Mr Carr says he'll propose a conservative budget to the government this year because the high growth rate in the economy won't continue at the same level and costs, including staff, keep rising.
": If we don't heed the warning signs now and take action, then we could end up with the situation of having a bloated public sector. And if there was a downturn, then we wouldn't have any choice at that stage but to reduce staff numbers."
Mr Carr says a budget committee has been set up and it will review individual budgets from each ministry before they're passed on to the government.