Friday 27: Handouts are political suicide

Dear Editor,

Further to the letter by Don Carlaw (CINews March 24), I would totally agree that the $3m stimulus package put aside by parliament in early February be utilised for something far more beneficial than handouts to a select few businesses.

The example quoted was on a loan of $500,000 at an interest rate of 14.5% (14.5 PER CENT!), an annual subsidy of $47,500 be given – WHY? The interest rates in the Cook Islands are out of all proportion to other areas (home loan rates in NZ by the major banks are 5.99% for example), and perhaps the government should look into the situation of bank rates and charges – but that is another matter entirely!

This idea of using public funds as handouts to poorly run and over-committed businesses I would think would be political suicide, due to the backlash from all the taxpayers – businesses and the general public alike who are not recipients of such a handout.

The world economic crisis has been generated by the greed, arrogance, incompetence and complete mis-management of the banking and financial institutions world-wide, and by so many people living way beyond their means which has been encouraged by these financial institutions. An important aspect has been the failure of the controlling and regulatory bodies to prevent this melt-down, and also the massive billion dollar frauds that have surfaced.

In the Cook Islands, as everywhere, there is a large misuse of public funds; huge sums wasted in pay-outs to overseas consultants/experts/advisers, poor performance by some departments (and even outright corruption in some cases) which unfortunately goes undetected year after year due to the lack of resources of the regulating bodies.

Any organisation spending tax payer money should be subject to an audit every year without fail, to ensure this money is being spent wisely and in the best interest of the country. Also you have the situation whereby laws are enacted and bills passed which never come into force due to the lack of funding and resources.

There would be three major regulatory, investigative and controlling bodies in the Cook Islands – Audit(PERCA), Justice, the Ombudsman – and if parliament were to go as high as doubling the appropriations of these departments this would come to less than the $3m put aside, and would be of far, far more benefit than handouts to failing businesses!

Finally, the Cook Islands is well situated to ride out this economic downturn and hopefully even come out stronger eventually, provided there is strong fiscal management by the government and a positive and proactive attitude by businesses and the people generally.

The DMP’s initiative in negotiating very low interest rate loans with the Chinese for infrastructure development projects (especially in these difficult times) should be of great benefit to the country if utilised correctly.

Brian Coker

Avana