Niue's Finance Minister Toke Talagi says opposition from Niueans to foreigners living on the island is a major constraint on its growth.
Mr Talagi tabled the island's budget last week and he says the Government's primary aim is to retain Niue as a viable nation and cater for those willing to remain there.
The Budget granted cost of living adjustments to government workers and pensioners, gave more money to village councils and promised more investment for commercial crops.
But Mr Talagi says free access to New Zealand and the refusal of Niueans to allow foreigners to settle there is hampering the island growth.
"People have talked to me about population and it isn't so much a population issue because we can populate this place with anybody and build the population up to five or ten thousand without any problem at all. The problem is really the fact the Niueans want this place to remain Niuean. And the second thing is the fact that we have free access to New Zealand. So at some point, Niueans both here and in New Zealand have towork out whether they want this nation to remain Niuean or whether we have to do something else."