The premier of Niue, Young Vivian, has easily withstood a vote of no confidence, winning 12 votes to 7.
An opposition MP, Terry Coe, had brought the motion saying years of economic mismanagement was the fault of successive governments and a new approach was needed.
Last month, the government agreed to cut workers salaries by ten percent as it struggled with a budget blowout and Mr Vivian says he believes this will ease the island's financial problems.
Next week he is to bring a delegation for discussions with the New Zealand government where the prioritising of aid spending is expected to be discussed.
This comes as the country tries to cope with ongoing power outages after the failure of one of two diesel generators.
The Niue works minister, Fisa Pihigia, says New Zealand needs to move more quickly to get a promised third generator to the island.
