11 Aug 2009

Opposition condemns Cook Islands budget

1:49 pm on 11 August 2009

The Opposition in the Cook Islands is calling this year's budget "the mother of all mistakes".

The budget, which was passed late last month, includes $82.5 million in loans for harbour, road, water and other infrastructure upgrades from China and the Asian Development Bank.

Finance Minister Sir Terepai Maoate presented it to Parliament as "the mother of all budgets," saying it was difficult to compile in a time of recession.

However, Opposition deputy leader Teina Bishop says it went through without a fight only because of the need to finalise a broadcasting agreement for the Pacific Mini Games.

He says it's a disaster and debt levels will go from $36 million in 2008/2009 budget year to $103 million this financial year.

The budget also allocates $27 million, through an Asian Development Bank loan, for an upgrade of Avatiu Harbour, work which Mr Bishop describes as unnecessary. He says the country needs "frequency of ships, not bigger ships."

The Cook Islands Chamber of Commerce is concerned about the contracts for road and water works as the aid is tied to Chinese construction companies.

President Steve Anderson says there are perfectly competent contractors - builders, engineers, construction companies here who could do the work.

Provisions defended

But Sir Terepai says the upgrade work will actually keep Cook Islanders in jobs.

Sir Terepai says criticism of the budget is unjustified and maintains the borrowing is necessary.

He says the water ring around the island and the quality of the water, have to be improved so a user-pays system can be introduced in order to repay the loan.

Sir Terepai says people are not unhappy about paying for water.