16 May 2006

Niue asks for aid advance from New Zealand to cover likely big budget blowout

7:23 pm on 16 May 2006

The government of Niue is promising tighter controls on spending as it battles a soaring budget deficit.

The Premier, Young Vivian, says it is untrue that his government has used donor aid money to try and balance the budget, but he admits the island could be in arrears by around three quarters of a million US dollars.

He says cyclone Heta, which hit the island two years ago, added to the perennial economic pressures.

Mr Vivian says they have asked if New Zealand can advance some of the aid money due to be allocated in the next financial year.

"They are eager to help us and I think with New Zealand's goodwill, and the minister has assured me that we will walk this one through, I believe that we will do it. It is going to be very very hard, it is going to be very very restrictive, but we are going to do it."