Cook Islands Government Spending Risks Overheating Economy

by Mary Swire, Tax-News.com, Hong Kong

11 November 2002

Financial Secretary of the Cook Islands, Kevin Carr warned last week that increasing government spending could cause the jurisdiction's economy to overheat, citing the growing number of public servants employed by the government as a potentially serious problem.

Speaking to the Cook Islands News service on Thursday, Mr Carr explained that the authorities are 'spending too much on ministries and the public service is again being inflated,' concerns which were supported by the Chamber of Commerce.

Cook Islands Public Service Commissioner, Maine Brown has reportedly estimated the number of civil servants employed by the various government ministries at around 1,460. Although the Commissioner admitted that there were 'quite possibly more', Ministry of Finance figures in April of this year recorded 1,555 'Crown-funded entities' on the payroll, suggesting that the Public Service figures are, in actual fact, quite far off the mark.

According to Cook Islands News, the Chamber of Commerce also recently expressed concerns with regard to the growth rate shown by the jurisdiction's economy.

'The popular opinion is that real GDP growth of 4% is necessary to maintain our standard relative to other countries,' CoC President, Ewan Smith explained, adding that: 'We have achieved an average of 2.5% over the past 10 years.'

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