KAP. 4.

TOURISM. The government pursues a policy of ‘controlled tourism’,
aimed at ensuring a harmonious development with the rest of island
life. Impetus to development of the tourist industry came from the
opening of the first Cook Island jet airport in 1973 and the opening of
the Rarotongan Hotel in May 1977.
Since 1980 tourism has become a major revenue earner. In 1987
gross earnings from tourism amounted to over $27 m, compared to $6
m for all other exports. Increase in visitor arrivals from 1983 to 1985
was more than 50 per cent. The number of tourists and visitors arriving
in the islands during the 12 months to December 1987 was 32,100
compared to 28,782 in 1985. New Zealanders formed the largest group
in 1985 (11,884), followed by visitors from Australia (4147), Canada
(3092) and the United States (3030).
OVERSEAS TRADE. The Cook Islands suffer from an adverse balance
of visible trade. The financing of imports 6.5 times the value of
local exports is made possible by aid from New Zealand and funds
transferred by Cook Islands workers in New Zealand.
About 80 per cent of exports go to New Zealand. Foodstuffs are the
major class of imports. New Zealand provides more than 61 per cent of
the imports.
Customs tariff. There is free trade with New Zealand. Import licences
are required for good imported from countries other than New
Zealand.
FINANCE. Revenue raised in the Islands is supplemented by aid from
New Zealand in the form of grants and loans. Revenues are raised
locally from import duties, import levies, income tax, company tax,
turnover tax, use tax, off-shore company registration fees and sale of
postage stamps. Revenue and expenditure figures are set out in an
accompanying table.
Income tax is assessed on a sliding scale with rebates for a dependent
wife and for children. Superannuation contributions are not taxed.
Company tax is 20 per cent.
GOVERNMENT REVENUE AND EXPENDITURE ($NZ MIL-
LIONS)
1980–81 1981–82 1982–83 1983–84 1984–85
Revenue 19.4 21.1 24.9 29.4 34.0
Expenditure 18.7 21.4 24.9 29.3 34.1
392