Cook Islands financial secretary Garth Henderson cannot quantify if debt will be back to pre-pandemic levels despite assurances from Prime Minister Mark Brown that it will be.

Henderson said he is confident Cook Islands will get back to pre Covid-19 Gross Domestic Product (GDP) growth by 2025/26 but stopped short of saying debt levels would return to pre-pandemic levels.

His comments follow a “much rosier” economic outlook from PM Brown, who last week said debt will be back to normal by 2025/26.

PM Brown said the latest economic forecast estimated the net debt ratio – which is debt measured against GDP – to reduce to 22 per cent in 2025/26.

In June this year, the net debt ratio was 41.9 per cent and the current public debt is $280 million.

Henderson said he could not confirm if debt would be back to pre Covid levels in that year.

“These are estimates, it is challenging.

“We are running a country on debt.”

PM Brown told Cook Islands News he expected a much faster reduction in net debt ratios than forecasted in this year’s budget with the border reopening.   

Improvements in economic modelling were now providing a much more optimistic forecast as was shared with Cabinet on Wednesday last week, he added.

Henderson said he believed the issue was not about debt, but about recovery and growing GDP.

That included rebuilding the workforce.

Policy makers were looking at ways to retain and attract people, he said, suggesting a targeted approach to school leavers.

“Nobody has looked at the 150 school leavers we have each year.

“There is no effort for us to retain them.”

Henderson would not elaborate on what, if any policies were being proposed, or timelines.

“We are working on a policy to retain them.”

He said key parties had met recently and were looking to set up a committee in a combined effort to tackle ongoing labour shortage challenges.

“It requires input from different perspectives.”

Henderson said there were constraints as the same people working on policy changes were those working to get the border reopened.

He said there was a suggestion Fiji could be utilised to prop up the domestic labour market, but reiterated his point of looking closer to home.

“Let’s make better use of our school leavers.

“There is also talk of encouraging our government employees into secondary employment.

“The reality is that this is not easy work.

“It requires the support of industry and we might have to organise a charter flight.”

Henderson said he was confident the nation could address the border reopening.

“We have a solid market and experienced operators.”

He said the decision to reopen the borders to fully vaccinated Kiwi travellers aged 12 and older from January 13 could pose challenges but he believed there was a strong interest in the higher end tourism market.

“Whether tourists come or not will depend on competition.

“How do we measure our current financial position? People are spending money, we have retained the public sector on salary and we have provided business with support.

“They are all still here, the majority are here and we are still in the game. “We still have labour here, the wage subsidy and the public service salary has kept this economy afloat.”