Top tourism executive Bob Taylor has taken a massive pay cut after the coronavirus outbreak forced his resort to close down.
The general manager of The Rarotongan Resort and Spa is on minimum wage of $7.60 per hour and 35 hours of work per week like all the rest of his staff, the company confirmed, carrying out refurbishment works.
In the public sector, too, Airport Authority Joe Ngamata has offered to take a pay cut of up to 50 per cent alongside all his staff, if they cannot restore revenues or obtain a government bail-out in coming months.
Now calls have been made for political leaders to do make the same sacrifices, as the country tightens its purse strings. Former finance minister Wilkie Rasmussen, in a letter to Cook Islands News, asks: “Have Henry Puna and Finance Minister Mark Brown got the gumption to make those sacrifices?”
Responding to questions from Cook Islands News readers, Opposition leader Tina Browne said she would taking a 15 per cent pay cut over the next six months.
Browne collects $123,250 a year. She would be advising the finance ministry to redirect 15 per cent of that to the Rakahanga constituency fund to support the island as needed.
Other Democratic Party MPs could decide for themselves if they want to take a pay cut, she said, but had a strong message for them: “It is only right that we parliamentarians also make a sacrifice given that the entire country has undergone belt tightening, hundreds have lost their jobs and have uncertain futures.”
She called on Prime Minister Henry Puna to impose a 15 per cent pay cut on himself, his Cabinet and government MPs, and all heads of ministries.
Puna, whose salary is $152,250, said they were looking into the matter but stated reviving the economy through the stimulus package was their major priority.
Finance Minister Mark Brown, who is paid $137,750, said the Cabinet had discussed taking pay cuts, but officials said this was at odds with their economic stimulus package.
“The public service payroll is an important component of our economy,” he said. “Any attempts to reduce government payroll will only hurt our economy, not help it.
“It will mean people have less money at a time when they need it. A downturn in the economy is not the time to be making cuts – that is like trying to cure a sick person by bleeding them.”
Tina Browne said the government should follow the lead of New Zealand prime minister Jacinda Ardern, who is taking a 20 per cent pay cut – but the finance minister rejected that as political posturing.
He said Ardern “is obviously making a political statement” by saying she was taking a 20 per cent reduction of pay over next six months, which he said was actually just 10 per cent of her annual salary. “Even she admitted it is a symbolic gesture.
“Instead of collecting $500,000 she will collect now $450,000. Her pay cut goes back to Treasury to offset their deficit. It doesn’t really help anyone.”
Brown said Cook Islands MPs spend far more than 20 per cent of their pay on helping their constituents. That was better than returning it to financial secretary Garth Henderson to offset the government deficit – that would not help anyone at all, he said.
“Far more effective to allow MPs to direct it to people in need. We are all well aware that it is not unusual for people to ask their MP for help – power bill, shop kaiou, motorbike payments, airfares etc.
“This is what it means to be an MP in our country, this is how we serve. I do not think anyone asks the New Zealand Prime Minister to pay their power bill or help them pay for an airfare.”
Last month, the New Zealand Government donated $7 million in additional aid to Cook Islands, to help with the country’s economic support package.
Brown said the government strategy in this time of economic turmoil was one of stimulus.
“This is a strategy being adopted by every country on the planet,” he said. “It essentially sees government pumping money into the economy to prop up business and put money into households. We have seen this in wage subsidy and business support and increase in welfare payments.”