May day for the

Region

May day for the Cooks money crisis

By Lisa Williams

Scratch every politician in the Cook Islands and a would-be teacher, planter, lawyer or doctor is under neath.

Lately, considering the way the politi cians have been running the country, those secondary careers may yet get a chance as government appoints a committee to look at the issue of trimming back on the num ber of seats in parliament.

Amongst those hanging on despite

some strong public sentiment that it’s time to go is Cook Islands prime minister and its most charismatic leader yet. Sir

Geoffrey Henry.

Just weeks after an internal coup in early March where 12 MP’s from his own cabinet signed a letter agreeing that he should step down, (the coup broke up in the wake of media attention and party sol idarity), Henry had another strong call from the Head of State, who penned a let ter on behalf of traditional leaders and non-govemment groups in the country saying government should step down.

“The issue is economics, not politics,”

Henry said to that, while admitting his own family was feeling the pressure of his wan

ing popularity.

“It’s not as if this exercise has not cre ated personal pressures within our family, but this is a problem that happened during my time (as leader), and I decided it would be a dereliction of duty to walk away from it.”

But while he insists that the country will make it to the next budget, economic and private sector soothsayers are predict ing d-day soon for the Cook Islands gov ernment.

For the last few months of the last year, depending on whether you ask politicians

or businesses, government has been paying its 3000-plus public servants on money coming in through Turnover taxes and Customs revenues.

Come mid-May, the money coming in apparently isn’t going to be enough to meet the money being spent - but with Treasury officials nervous at any mention of figures being released to the media it’s difficult to pinpoint just how much gov ernment will fall short when it comes to

putting pay into pockets.

And while cabinet pledged a new atti tude on releasing facts to business and a union-type body without muscle which represents the interests of government employees continues to lead the push for more accountability and more action, now.

The Cook Islands Public debt was SNZ23 million when Henry took on the reins of leader and finance minister after his government came into power in 1989 one and a half political terms later, the country is in the midst of its worst eco nomic crisis as Asian Development Bank and New Zealand experts fly in to get an exact hit on how much the country owes in 1996 - more than $l6O million in overseas debt of a package put at SNZIB6 million in total.

That figure was gauged after govern ment guesswork and a New Zealand expert was especially flown in to do the job years of financial fiddling had ignored.

Much of that comes from the SNZII3 million and rising Sheraton debt - a deal for a five-star luxury hotel to boost the country’s number one industry - tourism.

It was an ill-fated deal, one which the pre vious government entered into and Sir Geoffrey’s regime hooked on to sign and seal the fate of generations of Cook Islands taxpayers.

The Sheraton loan was, and still is, the

very exclusive baby of the Canberra-based High Commissioner Vincent Ingram, sim ply because nobody else between Rarotonga and Rome knows about the complex nature of the drawdowns, the cur rency changes, and the constant changes in the banks, people and governments involved.

But it’s not just the botched loan on the former Sheraton (now called the Vaimaanga Hotel) that has Cook Islands taxpayers up in arms - calls are also being made for the accounting of the millions that were drawn down through an entity called ECIL - an entity that came into prominence in the 1994 elections when the Alliance party published a “Book of Shame” showing receipts of money spent by ECIL officers as they lived high and spent large across Europe tying up deals for the hotels furniture, trimmings and linen.

The ECIL spending is dwarfed by fur ther revelations which Henry’s govern ment has been slow to make public - part ly because they didn’t realise just where the money was coming from while order ing an overworked and under-pressure finance crew to find the money.

Still, the same Public Service Association (PSA) that warned govern ment two years ago of the current crisis is already planning how the shortfall will be coped with. One source says there’s no way the union will accept the scenario of workers turning up at the banks to pull money out and being told there’s nothing there. What’s hoped for if the worst hap pens is that the money that is in the kitty will be divided up by all workers - and top to bottom, everyone gets the same pay.

It’s far more likely, however, that Henry is still crossing his fingers for a historical ly benevolent New Zealand to come to the

rescue.

Despite the lack of co-operation on the Winebox deals and international embar rassment over the Letters of Guarantee scam, Wellington has said it cannot desert an island nation in so much trouble. With more Cook Islanders in New Zealand than in the home islands and many more leav ing as the economic situation worsens, it’s likely the Cooks will want to make a final push for sovereignty and take out their own passports. Under a constitutional arrangement with NZ and much to the cha grin of those who agree with Winston Peters, the decision to give up their New Zealand citizenship has to be made by Cook Islanders.

As Finance Minister and leader Sir Geoffrey Henry has floundered since pub licly admitting the fact of the current crisis did not really hit home until he returned from a PIDP conference in Hawaii in February. Losing the plot has not endeared Henry to his people, his political oppo nents, and especially his cabinet and their party supporters.

But even more scary for private busi ness are signs that Henry had no intention of moving as fast as he should have - pub lic consultation as far back as February threw up suggestions to start attacking the Cook Islands predicted budget shortfall of $7 million come the 1996/97 budget at the end of next month.

None of the suggestions were specifi cally agreed to, and only glossed over in general or ignored altogether, in a critical “State of the Nation” speech delivered by Henry in mid-March.

While the speech fell short, it did set up committees on trimming back expenditure in the hope that government can present a balanced S6O million budget come June.

But while business leaders and govern ment workers stamp their feet in frustra tion, government refuses to make cuts on

“unnecessary” expenditure which would

also give it some measure of public sup port, and show that like the people who are now having to accept the consequences of their gross mismanagement, the directors are suffering too. ■