NEW ELECTION POSSIBLE IN NIUE AS GOVERNMENT FAILS TO PASS BUDGET

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ALOFI, Niue (August 8, 2002 – Radio New Zealand International)---Niue is facing a constitutional crisis after a controversial budget failed to pass today and Deputy Premier Sani Lakatani was removed from the Cabinet.

Niue is facing a huge deficit and the budget, already delayed a month, contains cuts to child allowances, requires tests for pension eligibility, and cuts grants for village councils and churches.

One of those to vote against it was former Premier, and until this morning current Deputy Premier Sani Lakatani, whose previous administration was severely criticized for its lack of financial controls by the Finance Minister Toke Talagi, as he tabled the budget.

Premier Young Vivian said he called Mr. Lakatani soon after the vote, told him he was a "naughty boy" and told him he had voted himself out of a job.

"I thought that he was with me and that we had been getting along well and I had brought him to Cabinet despite some very very strong opposition. I didn't have any inkling about this until we had the vote on the first reading."

Young Vivian said he believes they will be able to successfully pass the budget once four MPs currently overseas return, but this has to be achieved by next Monday to satisfy constitutional requirements.

Meanwhile, the Opposition says Young Vivian should resign, while the Premier says a new election is a possibility he is considering.

For additional reports from Radio New Zealand International, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Radio New Zealand International.

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