Health and education budget boost

Tuesday 28 May 2013 | Published in Economy


Finance minister Mark Brown announced on Monday the government is boosting salaries of teachers and healthcare workers in a balanced budget.

“We’ve managed to produce a budget in surplus,” he said.

Brown divulged the details at a press conference at the finance ministry, where he released numbers on key areas of spending.

Another major announcement made by Brown was the elimination of the 15 per cent withholding tax.

Introduced by the government in 2011 to pay the nation’s outstanding fuel bill to Toa Petroleum, the tax will cease to exist as of January 2014, said Brown, fulfilling an earlier pledge made by the government.

Based on information provided at the press conference, the biggest beneficiaries appear to be public and private school teachers and the healthcare system.

The education system is poised to receive an extra cash injection of $3.9 million, to be rolled out over the next three years, as the government seeks to increase remuneration of teachers to bring salaries in line with others in the industry.

Doctors, specialists, and specialist nurses will also have salaries adjusted when the health ministry receives an additional $1.5 million.

Brown said the spending boost fulfils budget priorities made in 2011 when the finance minister increased the salaries of justice ministry employees and police services. It was said at the time workers in the education and health ministries would receive similar treatment in future budgets.

Monday’s announcement also substantiated earlier reports of the re-opening of the Cook Islands nurse training school. Closed since 2008, Brown said funding for the school will begin flowing on July 1.

Import levies on tobacco and soft drinks introduced in 2012 have also been set aside for health ministry programmes dedicated towards non- communicable diseases, said Brown.

Regarding social welfare programmes, the government is allocating an extra $50 per month for pensioners aged 70 years old and over, bringing the monthly allotment to $500.

Providing funds for today’s spending announcement, Brown said revenue receipts have come in roughly in line with budget estimates.

“We’re tracking quite well in terms of revenue collection,” he said.

Pre-budget discussions were described by the finance minister as “intense,” as cabinet spent roughly three weeks assessing recommendations made in a report produced by the budget support group, which is composed of private sector and government officials.

Monday’s announcement will be followed up on June 5, when the budget is presented before parliament, which sits on June 4.