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PM confident economic outlook will be ‘ahead of forecast’

Monday 27 June 2022 | Written by Matthew Littlewood | Published in Economy, National

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PM confident economic outlook will be ‘ahead of forecast’
(File photo) Prime Minister Mark Brown. Photo: LOSIRENE LACANIVALU / 21031938

Cook Islands Prime Minister Mark Brown expects the Government’s books to be better than expected, with the Pre-Election Fiscal and Economic Update due to be released today.

The update, which is released prior to each election, outlines the fiscal outlook for the country. The election is set to take place on August 1.

Brown said he had not seen the update yet, but “anecdotally looking at how busy the island is, I expect we would be ahead of what we forecast”.

In this year’s Budget, the Government projected a fiscal deficit of $39.8 million in 2022/23 that will be funded through the Government’s cash reserves at the end of 2021/22 and an operating deficit of $0.7 million and fiscal deficit of $5.2 million is projected in 2023/24.

However, Brown said things had been picking up of late, particularly with the arrival of tourists.

“I think the biggest thing we did in terms of putting money back into people’s pockets is opening the borders,” Brown said.

“By opening the borders, we’ve allowed the tourists come in to spend their money and we’re starting to see the benefits of that all the way from the top-end hotels and resorts, right the way from stall-holders at markets. You can see it at the food markets at Muri, they’re positively buzzing.”

He said the majority of those employed were now earning above the wage subsidy.

Brown said the Government’s decision to open up in January was “bold”, knowing that Covid-19 would come with the tourists, “and sure enough it did”.

“But we also knew with the vaccination programme we had put in place; we would be prepared. The results have vindicated our decision, although we have had more than 5000 cases of Covid-19, we have had no hospitalisations and only one death,” he said.

“We’ve allowed people to get back to the business of business. From here, the greater our economic productivity, the more money we’re able to put into people’s pockets.”

Brown also said the increase to the minimum wage from $8 per hour to $8.50 per hour and an increase in the Old Age Pension by an extra $20 per month, would help address cost of living issues.