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Less tax could keep people here: DPM

Wednesday May 01, 2013 Written by Published in Economy

The solution to the exodus of Cook Islanders to Australia is to adjust the tax system in the Cooks, said the Deputy Prime Minister.

Recent meetings about the Australian mining industry, organised by a group called Awaiki Reo Recruiters, were flooded with hundreds of people interested in finding out about jobs in Australia.

Deputy Prime Minister Tom Marsters said the main reason Cook Islanders move to work in the Australian mining industry is the attraction of a larger pay cheque.

He said the government has been discussing whether to raise the minimum wage, but is also looking at other ways to make it easier for Cook Islanders to pay their bills and service their loans.

“Of more importance to us at this stage (than raising the minimum wage) is the lifting of the taxable income threshold. At the moment it’s non-taxable up to $10,000. (If the threshold was raised), you could earn more without being taxed. That is one real possibility.

“Another possibility is no tax on second and third source of income. I think that would be more attractive Our officials have been asked to look at that.”

He said some people struggle to pay their bills because of the level of tax.

“They find it difficult even having two or three jobs. Because of the tax, there’s no real advantage. So they might as well pack up and go. I believe if we were able to allow them to keep all they’re getting from their second and third source of income, it would be a huge help towards them servicing their loans, and they may not decide to leave. We are talking about it at the moment.”

Acting director of immigration, Vasie Poila, said many people who enjoy the Cook Islands lifestyle leave for financial reasons.

“It’s more so the pull factors from Australia than it is the push factors from this end. There’s a mining boom going on in Australia and everybody wants to get a slice of the cake so to speak. That is an opportunity for them, and how it’s been promoted – not necessarily by this recruitment agency, but by word of mouth. (Cook Islanders) are getting anecdotal evidence from people who are already experiencing that lifestyle (in Australia). So they’re enticing our people, they’re pulling our people.”

She said the exodus to Australia has occurred in other places in the world.

“A lot of people from New Zealand are struggling with the same issue, and even their government is now trying to draw their population back.”

However, she said the mining industry in Australia is starting to slow down.

“That’s probably something that our people don’t really understand, if they’re not keeping up to date with the trends that are occurring overseas, they might find themselves stuck in it, between a hard place and a rock.

“I’ve seen predictions that yes, Australia is slowing down, and even more so they are tightening on foreign workers and certain visas into Australia for work purposes – because the Australian population themselves are actually starting to find it a lot more difficult to find jobs, because of the competition being drawn in from outside Australia.”

She said more people would choose to stay in the Cook Islands if their incomes were higher.

“A lot of us Cook Islanders choose to stay because of the lifestyle here – it’s priceless. For a lot of people who leave, if it was not for loan and mortgage payments, they’d definitely stay.”

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