2012-13 budget consultation - · pdf file2012-13 budget consultation ... ppp public private...

2012-13

Budget Consultation

Government of the Cook Islands

Ministry of Finance and Economic Management

12 October 2011

To seek the input of Cook Islanders into the future of the Cook Islands

www.mfem.gov.ck

Cook Islands Government Budget Consultation 2012-13 2

Message from the Minister of Finance

Kia Orana,

Today, I would like to announce the commencement of the process for developing the

2012-13 Budget with the release of our first ever Budget Consultation Document.

It is the Government‟s desire to get more input into the budget process from across the

community. I and other members of the Government have been provided with many good

ideas across the country for our ongoing development. Responsible government

encourages community discourse allowing those across the community to get a good

understanding of different ideas and the choices faced by the Government.

It is in this sense of community consultation that I would like to take the opportunity to

invite individuals, the business community, the church, non-government organisations and

other representatives of civil society across the Cook Islands to present a submission to the

Government on the formulation of the 2012-13 Budget.

The Budget Consultation Document prepared by the Ministry of Finance & Economic

Management contains some base facts to inform people on how the nation is progressing.

This will normally be a succinct document, but for this year I have included two further

pieces of work to inform the community.

Firstly, the Government has provided a summary of the specific actions recommended by

the Economic Task Force and Economic Summit held in April 2011. These actions have been

recommended and initially costed by the Economic Task Force. The Government intends to

explore these options further, and will consider the short and medium term priorities

outlined by the Task Force in the development of the budget. The Government is grateful

for their efforts which have resulted in an impressive list of actions.

Secondly, we have included the guiding principles underlying the current Functional Review

of the Public Service. It is the intent of the Government to improve productivity and focus

the public service on its core business and to provide opportunities for new initiatives.

This Government will always be fiscally prudent. We have seen in the recent past how the

poor state of public finances can quickly get out of control and cripple a country; we are

seeing exactly this playing out in many parts of the world.

At this point in time of our national development the government is strongly advocating

wise investment in key infrastructure as it is the key to our continued national prosperity.


Following the Budget consultation the Government will publish its master infrastructure list,

much of which is already identified in the Economic Task Force recommendations. This list

will outline the major works we would like to undertake, and and an approximate costing for

that infrastructure.

In a break from the past, the Government will release the Budget Policy Statement on 1

December along with an update on the Government‟s financial and economic projections.

This document will take into account feedback we received from the community in the

preceding weeks. We will also be asking our development partners to meet with us in late

January of 2012 to work through coordinating their investments for the continued

development of the Cook Islands. I would like to see both the Government and development

partners working cohesively to ensure that we get the best return from our investments.

I have recently announced the Government will assist Parliament in re-establishing the

Finance and Expenditure Committee. This will add an additional level of scrutiny of

Government and provide a more effective Parliamentary process for the review of the

Government‟s budget.

The Government is aiming to get the budget to Parliament in early June 2012, well in time

for the Committee, and Parliamentary debate. We are aiming to have the budget passed and

ready for implementation on 1 July 2012.

I encourage you all to contribute and participate in the development of the budget, it is in

this manner and spirit that our national will continue to develop and advance.

There is no set format to a submission, they can be brief or as long as the author desires.

These will be made public and posted on the Ministry of Finance and Economic Management

website: www.mfem.gov.ck.

Honourable Mark Brown

Minister for Finance and Economic Management

12 October 2011


ABBREVIATIONS

ADB Asian Development Bank SOE State owned enterprise

BCI Bank of the Cook Islands SOI Statement of Intent

BSG Budget Support Group STE Small Tourism Economy

Capex Capital expenditure TA Technical Assistance

CE Crown Entity TAU Te Aponga Uira

CEO Chief Executive officer TechNZ NZ trade and enterprise

CIGPC Cook islands Government Property Corporation TOR Terms of Reference

CIIC Cook Islands Investment Corporation USP University of the South Pacific

CILMS Cook Islands Library and Museum Society VAT Value Added Tax

CISNOC Cook Islands Sports and National Olympic

Committee

Watsan project Water and Sanitation project

COC Chamber of Commerce

DFCI Development Finance Cook Islands

e-commerce electronic commerce

EDC Economic Development Corporation

EDS Economic Development Sector

EEZ Exclusive Economic Zone

e-government Electronic government

EIB European Investment Bank

E-knowledge electronic knowledge

ETF Economic Task Force

FAD Fish Aggregate Device

GDP Gross Domestic Product

GE Genetically Engineered

HOMs Heads of Ministries

ICT Information Communication Technology

KPI Key performance indicators

MEPS Minimum Energy Performance Standards

MFEM Ministry of Finance and Economic Management

MMP Mentor Matching Program

MMR Ministry of Marine Resources

MOCD Ministry of Cultural Development

MOIP Ministry of Infrastructure and Planning

MOU Memorandum of Understanding

NGO Non Government Organisation

NSDC National Sustainable Development Commission

NSDP National Sustainable Development Plan

NZ New Zealand

NZD New Zealand Dollar

PERCA Public Expenditure Review Committee Assessment

PPP Public Private Partnership

PS Public Service

PSC Office of the Public Service Commission

ROBOC Revenue collected on behalf of the Crown

All monetary references in this document are expressed as New Zealand Dollars.

The fiscal year of the Government begins on the 1st July and ends 30 June.


1. Introduction

The purpose of this document is to engage the people of the Cook Islands in

developments managed by government realised through the government‟s annual

budget. Your input will be considered by relevant managers of the machinery of

government to inform future planning of service delivery to the people of the Cook

Islands.

The document provides a short overview of how the Government of the Cook

Islands sources funding and where it invests it in, what plans for developments are

being developed within Government that are intended to shape the future for Cook

Islanders.

If you would like to make a submission, please send these through to

[email protected] before the 31 October 2011 (noting that all submissions

will be made public via the MFEM website and will include authors unless requested

otherwise).

•Population

•Health and Education

•Economy

Cook Islands

Community Profile

•Where does our money come from

•Where does government spend its money Page 7

•Fiscal Setting

•Governments Fiscal Strategy

What makes up the

Annual Budget

•National Sustainable Development Plan Page 11

•Economic Summit Outcomes 2011 Page 14

•Functional Review of Government Page 47

Upcoming

Developments

•Submit your input before 28th October 2011

•[email protected] Page 55Having Your Input

mailto:[email protected]


2. Cook Islands Community Profile

The Cook Islands has a relatively small economic base

due to its isolation from key global markets and limited

primary resources including land space. The economy

has evolved from one where growth was mainly driven

by public sector expenditure to one that is now largely

private sector driven. In 2010-11 it is estimated that

the Cook Islands economy has grew 3.4 per cent in nominal terms (2.9 per cent real

terms) over the preceding year despite the instability in the global markets in 2008-

09 which impacted on the global tourism market. The key industries underpinning

the economy are tourism, financial services, marine and agriculture.

The National Census will be conducted on 1 December

2011. The results will provide government with a revised

baseline for our population projections. MFEM estimate

the total population of the Cook Islands to be around

26,0001 in June 2011, consisting of residents and

temporary visitors (who stay more than 10 days). In the 2006 population census

the count of the resident population was approximately 15,000. It is difficult to

accurately estimate the current resident population due to the free movement

between New Zealand and Cook Islands which is difficult to monitor. Immigration

data suggests the resident population has declined by approximately 27 per cent,

suggesting the current estimated population of 26,000 is made up of approximately

40 per cent residents and 60 per cent visitors.

With the distribution of islands divided into the Northern and Southern regions,

covering a total land area of 240 km² and scattered across an Exclusive Economic

Zone (EEZ) of 2 million km² the population based on the 2006 census is vastly

urbanised. It is estimated that 72 per cent of the total

population resides on Rarotonga, it is expected that the

2011 census will unveil further urbanisation.

A management review of the Cook Islands Heath system in

2007 found the health status of the people of the Cook

Islands to be comparative to the health status of other

1 Source: Cook Islands Statistics Office, Table 1.1 Population Estimates & Vital Statistics, June 2011


Pacific Islands populations in the region. Chronic diseases and associated risk

factors continue to be the most serious challenge to the health and well being of

people including obesity, diabetes, cardiovascular and respiratory diseases2.

The increasing rates of cancers and the ability to intervene early and provide

curative care represents a major challenge to the Cook Islands health system2.

Another issue is the continuing rise in motor vehicle related trauma will require a

cross sectoral community response and the social issues of alcohol and tobacco

continue to have an impact on the health system. The ability of the health sector to

respond to emerging new diseases, emergencies and natural disasters all provide a

significant challenge for a relatively small Pacific Island nation with limited health

resources2.

To date, the Ministry of Health confirm that the findings of the review in 2007

continue to be the same challenges faced by Cook Islanders in 2011.

The diagram below summarises the main characteristics of the Cook Islands, in

terms of its population, social and economic features.

2 Cook Islands Ministry of Health Management Review, 2007

Population

•As at June 2011

•Estimated total population

26,000

•Estimated resident population

10,900

• 5,559 male

•5,341 female

•As at December 2006 (Census)

•Median age 27.5 years

•Urban population 72%

Health & Education


•Life Expectancy at birth

•male 69.5

•femaile 76.2

•Proportion of population aged

15+ is 69% having

•trade and business certificate

and professional certificate

18.4%

•Tertiary qualificatiion 28.6%

• Year end 2010

•65% passed national grade 4

English

•72% passed national grade 3

Numeracy

Economy

•2010-11 Nominal Gross Domestic

Product (GDP) NZD357million

•2010-11 GDP per capita

estimated to be $13,729

•2010-11 % change in Consumer

price index 0.5%

•2010-11 Visitor arrivals 106,000

•2010-11 Trade defcit estimated

to be $355.9million


•Labour force participation rate

70.2 % (2006 Census)

•Unemployment rate 6.9% (2006

Census)


The MFEM publishes Economic and Fiscal Updates three times a year, in December,

March and June with all budget publications. The next update will be provided in

the Half Year Economic and Fiscal Update to be published on 1st December 2011.

3. WHAT MAKES UP THE ANNUAL BUDGET

The annual budget (Appropriation) sets the upper limit of public expenditure from

July to June each fiscal year. In 2011-12 the upper limit of expenditure passed by

the Parliament of the Cook Islands is $172.1 million, which is funded through

various sources.

Where does the money come from?

Government finances public expenditure through various manners, these include

imposing taxes, receipt of assistance from donors, raising loans and other sources

of revenue such as user chargers. In 2011-12 the estimated revenue and funding

streams is $172.1million

Table 1 : Where our funding comes from ($ millions)

Funding Sources Estimate 2011-12

per cent of total budget

Taxation 90.0 52 per cent Official Development Assistance 44.0 26 per cent Loan Proceeds 14.3 8 per cent Interest and Dividends 5.5 3 per cent Other Crown Revenue 5.4 3 per cent Sale of Goods and Services 5.2 3 per cent Reserve Funds 1.6 1 per cent Other 6.0 4 per cent TOTAL 172.1 100 per cent

Where does Government spend its money?

Government uses its funds to provide various public goods and services, invests in

assets and services debt. The Governments priority areas are guided by focus

areas identified in the annual Budget Policy Statement. Table 2 reflects the

expenditure commitments in the 2011-12 Budget Estimates:


Table 2 : How funds are allocated by sector

Sector 2011-12 ($ million)

per cent of total budget

Social 44.0 26 per cent

Education 13.4 8 per cent

Health 13.4 8 per cent

Other 17.2 10 per cent

Economic 20.5 12 per cent

Tourism 14.3 8 per cent


Infrastructure 32.3 19 per cent

Infrastructure 30.4 18 per cent

Environment 1.9 1 per cent

Law and Order 6.6 4 per cent

Policing 4.1 2 per cent

Justice 2.2 1 per cent


Outer Islands 11.2 7 per cent

Governance 19.3 11 per cent


Debt servicing 3.8 2 per cent

Contingency 0.2 0 per cent

Emergency Response 0.2 0 per cent

Other3 34.0 20 per cent

Grand Total $ 172.1 100 per cent

Source: Budget Estimates 2011-12, Appropriations and Commentary, Government of the Cook Islands, July 2011

The 2012-13 Budget Policy Statement is intended to be published on 1 December

2011 to provide updated policy and economic parameters for the allocation of

resources in the development of the 2012-13 national Budget. The 2012-13

Budget Estimates document detailing where the Government has committed its

available resources will be tabled in Parliament on the 1 June 2012 and publicly

released at the same time.

Fiscal Setting

Table 3 demonstrates current resourcing available for new expenditures from

2012-13. It does not include any savings which may arise from Government

decisions.

3 Includes contingency funding, unclassified donor funds, and debt servicing.


Table 3: Budget Balance Forecasts ($ million)

2011-12 to 2013-14

2011-12 2012-13 2013-14

Budget Forecast Forecast

$m $m $m

Operating balance 0.0 0.6 2.6

Overall budget balance 0.4 0.1 0.0

Source : Budget Estimates 2011-12, Appropriations and Commentary, Government of the Cook Islands, July 2011

Current revenue streams are likely to be insufficient to cover improved services

going forward without structured reforms to the public service and the overall

modality for funding the delivery of public services.

What is government‟s fiscal strategy?

As stated in its Budget Policy Statement 2011-12 and reflected in the Fiscal

Responsibility Ratios, the Government of the Cook Islands fiscal strategy is

Size of governments pocket

Maintaining taxation to GDP ratio of 25 per cent to control the size of

governments operating expenditures and limiting the withdrawal of resources

away from the private sector

Expenditure control

Continuing to maintain recurrent expenditures within operating revenues to

keep within affordability

Keeping cost of the public service within 40 per cent of total revenue to ensure

that significant sums are flexible for development programs

Prudence

Undertake new borrowings within the country‟s debt carrying capacity, within

35 per cent of nominal gross domestic product

Debt servicing costs for new and existing debt levels are kept within 5 per cent

of total revenue noting that the value of debt servicing is expected to increase

over the medium term.

the rate of debt accumulation will be balanced across the country‟s debt carrying

capacity and the cost of debt servicing


2012-2013

Budget Policy

Statement

To be released

1 December 2011

2012-2013

Budget

To be released

1 June 2011

The 2011-12 Budget documents can be downloaded off the MFEM website:

http://www.mfem.gov.ck

http://www.mfem.gov.ck/


4. WHAT DEVELOPMENTS WILL SHAPE THE FUTURE

The Government is working on various policy documents that are intended to guide

and shape the future for Cook Islanders.

The Government intends to specify development outcomes for Cook Islanders

through the National Sustainable Development Plan 2011-2015 that will also take

into account the outcomes of the Economic Summit 2011.

The Government intends to align the machinery of government to deliver on these

outcomes through the Functional Review currently being undertaken by the Office

of the Public Service Commission.

The Government is also considerate of its ability to effectively position limited

resources towards the highest most effective and efficient programs.

Improvements to the Government of the Cook Islands funding systems are intended

to come through a road map for better Public Sector Financial Management, and the

release of the Cook Islands Official Development Assistance Policy governing the

receipt and use of donor funding.


I. NATIONAL SUSTAINABLE DEVELOPMENT PLAN

2011-2015


2011-2015

NSDP

To be released

1 December 2011

i. NATIONAL SUSTAINABLE DEVELOPMENT PLAN 2011-2015

In 2007 the Cook Islands launched its 2020 visionary framework - Te Kaveinga Nui,

articulating the development outcomes desired by the Cook Islands which would be

realised through a three phase medium term planning approach.

The Te Kaveinga Nui was accompanied by the first National Sustainable

Development Plan 2007-2010, a strategy on how to progress towards the 2020

outcomes during the first phase. This will be followed by NSDP 2011-2015 and

finally 2015-2020.

The purpose of a National Sustainable Development Plan is to set national goals, the

expected results and effective strategies to guide policy decisions over the medium

term that aim to deliver on Te Kaveinga Nui.

The National Sustainable Development Plan 2007-10 can be downloaded off the

Office of the Prime Minister‟s website: www.pmoffice.gov.ck.

Drawing to the end of the first phase of the planning period, the Government has

reviewed the performance of the NSDP 2007-10, and drawing on this review intends

to release the second phase of the planning period, NSDP 2011-2015, on 1

December 2011.

This second phase of planning is expected to draw on the key strategies from the

Economic Summit outcomes held in April 2011 and on other extensive community

consultations undertaken by the Office of the Prime Minister over the past year.

The NSDP 2011-15 will set the priority areas for this planning period aligned to the

Te Kaveinga Nui outcomes.

Te Kaveinga Nui

Vision 2020

NSDP

2007-2010

NSDP

2011-2015

NSDP

2016-2020

Outcomes

2020

http://www.pmoffice.gov.ck/


Through the consultations undertaken by the Office of the Prime Minister, the

recommended goals for 2011-15 are as follows:

The working draft of the National Sustainable Development Plan 2011-15 can be

downloaded off the Office of the Prime Minister‟s website : www.pmoffice.gov.ck

Strategic

Goal 1

•„A COOK ISLANDS WHERE ALL OUR PEOPLE CAN BUILD BUSINESS AND ENTERPRISE TO CONTRIBUTE TO NATIONAL

ECONOMIC GROWTH WHILE RESPECTING OUR ENVIRONMENT AND CULTURE‟

Strategic

Goal 2

•„A COOK ISLANDS WHERE ALL PEOPLE CAN ENJOY OPPORTUNITIES TO FULFIL THEIR POTENTIAL, PROSPER AND

PARTICIPATE IN THE SOCIAL, ECONOMIC, POLITICAL AND CULTURAL LIFE OF OUR COMMUNITIES AND NATION‟

Strategic

Goal 3

•„A COOK ISLANDS WHERE WE SUSTAIN OUR ECOSYSTEMS AND USE OUR NATURAL RESOURCES EFFICIENTLY‟

Strategic

Goal 4

•„OUR INVESTMENT IN INFRASTRUCTURE WILL MAXIMISE ECONOMIC RETURN, IMPROVE LIVELIHOODS AND BUILD

RESILIENCE‟

Strategic

Goal 5

•„A COOK ISLANDS WHERE THE PRINCIPLES OF GOVERNANCE ARE PRACTICED TO ENSURE SUSTAINABLE DEVELOPMENT‟

Strategic

Goal 6

•A COOK ISLANDS WHERE THE RULE OF LAW ENSURES JUST, SAFE, SECURE, STABLE AND SUSTAINABLE COMMUNITIES

Strategic

Goal 7

•A COOK ISLANDS WHERE OUR PEOPLE ARE RESILIENT TO DISASTERS AND CLIMATE CHANGE TO ACHIEVE SUSTAINABLE

LIVELIHOODS


II. ECONOMIC SUMMIT OUTCOMES 2011


ii. ECONOMIC SUMMIT OUTCOMES 2011 – A SUMMARY OF THE ECONOMIC TASKFORCE

OUTCOMES

The Cook Islands is referred to as a Small Tourism Economy (STE). Since the

investment in the Rarotonga International Airport in the 1970‟s, tourism has

become the core driver of our Nation‟s transition from subsistence to a sustainable

economy. This transition remains in progress today and our economy must achieve

significant growth to reach the parameters of a sustainable economy delivering the

outcomes and expectations of our people. By international standards today we fail

to achieve the status of economic independence. Solid economic foundations have

enabled our economy to grow but we must now focus on investing in our

infrastructure and driving key industries that will guarantee economic returns in the

short, medium and long term.

The Economic Task Force identified the following key industries to grow and

transform the economy:

Tourism

Financial Services

Agriculture and Horticulture

Marine Resources and Fisheries

Cultural, Creative and Tertiary Education Industries

Trade and Enterprise

There are some fundamental strategic directions that must be followed if we are to

achieve growth and transformation of the economy from an STE to a sustainable

economy. The following pages reflect the specific actions which the Economic Task

Force identified as being the priority for the short, medium and long term.


Table 4: Economic Taskforce Specific Actions and Programming

Sector NZD

Agriculture 5,600,000

Short/Medium Term Initiatives 300,000

Medium/Long Term Initiatives 5,300,000

Trade and Enterprise 20,840,000

Short/Medium Term Initiatives 19,580,000


Culture and Creative Industries 4,090,000

Short/Medium Term Initiatives 140,000


Financial Services 4,010,000



Infrastructure 546,565,000



Marine Resources 6,890,000



Public Sector 7,255,000



Tourism 22,800,000



Grand Total 618,050,000

*Source: Taskforce Spreadsheet – 2011 Second Edition 5th October 11## Version 2.xls

Agriculture and Horticulture

The Task Force believes the agriculture sector has the capacity to develop as

Tourism and financial services have done with the arrival of modern, innovative,

researched and technically engineered farm units valuing our resources, our

landowners, our agricultural expertise combining technology and new labour. Made

in the Cook Islands will drive up Gross Domestic Product (GDP) as we become a

contributor to overall global food production. The Task Force recommends the

following specific actions.


Short/Medium Term Initiatives

1. Introduce Government policy in support of the EDS. National, Island, Vaka, Village based

Cooperatives and Farm Public Private Partnerships (PPP) will be supported enabling

larger scale national Cooperatives/PPP's and smaller village scoped Cooperatives/PPP's.

The Commercial Farm Cooperatives and PPP‟s are the core private sector investment

vehicles.

This may come at no cost, or may still require further costing

2. Provide national policy support for biological and organic production


3. Regulate the introduction and use of GE seeds and products


4. The Economic Development Corporation (EDC) will establish Agriculture, Creative and

Marine sector mentoring programs. In partnership with the NZ Government and its

Forward Aid program to introduce into the Aid program schemes that provide

mentoring, technical support and knowledge and capacity building. These are new

initiatives that directly support the new Economic Development Strategy (EDS), Growers

Associations, Farm Cooperatives and PPP's,. Facilitate the delivery of appropriate

programs in primary and fishing production, stock and crop management, marketing

including freight-to-market solutions.

Estimated Cost $300,000

Medium/Long Term Initiatives

1. Adopt an EDS "Farm Model" Policy: Either PPP's or Cooperatives combining stakeholders

(farming/primary producers community and business sector) intending to jointly

develop, innovative, research and technically engineer "model farms" that value our

resources, (people, land, traditions and agricultural expertise) create modern business

enterprise. Consider 200 per cent deduction of the direct costs and labour costs; 5year

grant term; status approved by EDC; Applies to existing and new companies engaged in

the Pa Enua; incentives recognise risks and extra costs of doing business in the Pa Enua;

Incentive is to develop new products, in consultation with Growers Associations,

acknowledges farm development and marketing costs to reach Rarotonga, Papeete,

Auckland, Sydney, Los Angeles.

Estimated Cost $ 3,000,000

2. EDC: Through these PPP's will manage promotion/marketing, Crop pricing, subsidies

and grants to farmers that guarantees minimum prices at the farm gate to farmers at the

time of planting the crop. A scheme is already approved that incorporates crop planning,

pre production targeting, production costs, sales contracts and freight contracts.


3. EDC: Adopt policy for the better utilisation of our natural resources - Land use,

cooperatives, land bank, land corporation



4. EDC: Negotiate and complete PPP's or Memorandum of Understanding (MOU) with Private

sector and Growers Associations, Farmers Cooperatives for resources and support from

the Government, these agreements will also include production, (including bio-energy

fuels), supply quantities, prices and delivery.


5. EDC: Provide grants towards the transition costs (moving a business unit into the Pa

Enua) to establishing Pa Enua production units

Estimated Cost $ 500,000

6. Establish Green Energy crossover applications in EDS - Agriculture etc

Estimated Cost Estimated Cost $200,000

7. Grow Bio fuels – select suitable island location, plan cost and establish technical

specification. Government fund these costs in the Budget Appropriation


8. Legislation. Government will review existing and consider new legislation to support the

EDS and Agriculture policy. Food, Fair Trade, Import Levies, Price Control, VAT, Taxation

etc will be reviewed to simplify and create appropriate investment environment for EDS

products "Made in the Cook Islands" to expand. Consider direct incentives via grants

and exemption, and the removal of taxes and Import levies.


9. The EDC will facilitate grants and support to farmers to develop farms and products in

the Pa Enua. Estimated Cost $200,000

10. The EDC will provide EDS support during transition and crucial business building phase

by a system of freight subsidies to Rarotonga/Auckland/Sydney for exports to these

destinations


Trade and Enterprise

The Task Force believes there are a number of opportunities to improve the

capacity and management of the trade and enterprise sector. These include

cooperatives and public/private partnerships in all economic development sectors,

land use and land banking, telecommunications, transport, residential and

commercial property portfolio. The Task Force recommends the following specific

actions.

These major sectors require the basic underpinning of improved infrastructure.



1. As the Holding Company Cook Islands Investment Corporation (CIIC) will hold all

public investments in State Owned Enterprises (SOE), Crown entities and

Agencies and will be responsible for their management. The holding company

(CIIC) will establish an Statement of Intent (SOI) with the Cabinet and the

Chamber Of Commerce (COC) that establishes the Government's National

Economic and Commercial policies for the SOE's, Crown Entities and Agencies.


2. CIIC Develop a National Telecommunications Policy with a particular focus on

high quality, low cost broadband internet access available nationally, specifically

addressing:


3. CIIC is the holding company for Government's trading entities and assets and its

functions and board of directors composition will be restructured to reflect its

commercial significance in the National Economy. SOE's, like the private sector

are commercial businesses producing revenues from the sale of products and

services and they are a significant key to our wealth, economic growth and GDP.

Public sector business enterprise policy will be aligned with Government and

Private Sector through CIIC by the appointment of a board of 7 people, 3

Ministers of the Crown appointed by Cabinet and 3 Directors from the Private

Sector appointed by the Chamber of Commerce, plus a chairman appointed

jointly by Cabinet and the Chamber of Commerce.


4. CIIC manage SOE financial and economic policy, pricing, profitability, capex,

return on investment and dividends given the monopoly position


5. Commercially innovate tertiary education, research and scientific development

supporting job creation, higher educational skills and broader qualifications,

population growth and rising incomes.


6. Employment Policy: employee benefits, minimum wage, maternity leave etc,

these principles to be incorporated into legislation whilst leaving the employees

and the private sector to implement these policy of rewarding experience,

qualifications, training and acceptance of responsibility. Employees In the Public

Service, contracts must be robust; specify obligation to adopt new policies;

acceptance of responsibility for outputs; collective responsibility for sustainable

practices, environmental preservation, renewable energy; Economic

Development policies; minimum training and CE obligations; all as conditions of

continuing employment.



7. Encourage the University of the South Pacific (USP), Tertiary sector and the

Ministry of Education‟s Schools System to develop training programs for EDS's


8. Establishing these policies at CIIC will require structural and operational review

to streamline and centralise Governments Investments in SOE's and companies

and to reposition all management operations within the SOE's Entities and

Agencies. A peer review advisory services have been offered as part of the

review. Implementing new policy will include the appointment of Boards of

Directors and CEO's to each entity, SOI's and a 10 year business plan that

integrates to the NSDP.


9. Explore options to provide cheaper, quality telecommunications, broadband and

technologies including fibre to homes and businesses in Rarotonga and the

whole of the Cook Islands


10. Explore Telecom broadband service improvements that will reduce latency and

cache local internet network and deliver free wifi and charge only for

international traffic used


11. Form new business PPP for Disaster reconstruction projects and many other

projects restricted by capacity


12. Implement policy that places Telecom within CIIC new management structure

(refer elsewhere in this document) enables and clearly defines

Telecommunications sector future plans and defines role of Telecom CI as level

1 provider of international connectivity, the backbone infrastructure for service

delivery and applications and enables wholesale and retail applications (level 2

and 3) to be contested/delivered by private enterprise


13. Initiatives that innovate private sector growth in Tourism, Financial Services and

the new Economic Development Sectors.


14. Introduce a new Information and employment website - a portal to be funded by

Government and operated jointly by Ministries and the Chamber of Commerce

on behalf of all employees in the Cook Islands whereby entrepreneurs and

employers advertise new business ventures, capital funding opportunities, job

vacancies, management positions, training options and incentives, new projects

listings, Business Plans, Business Plan updates, share trading, RFI‟s, RFP‟s,

tenders, discussion documents, information memorandums, MOU‟s PPP‟s

contract negotiations, and executed contracts.



15. Introduce Competency based - Training to be practice-oriented, including

attachments to companies and work on real projects to reinforce learning.


16. Investigate Governments investment in upgrading the communications

infrastructure while service providers lease access for usage


17. Investigate Lower telecommunications costs by de-regulating the

telecommunications market as soon as possible


18. Investigate selling Telecom share holding – government to move to being the

regulator only in a competitive market


19. Investigate Telecom Cook Islands to be separated from the Government

regulatory function


20. Justice Ministry research and innovation of Births, Deaths and Marriages

database developing online web based technology enabling revenue service to

all Cook Islanders


21. Justice Ministry upgrade of services. On line Land registry, Justice land transfer

system merged with MOIP survey classification system. Unify and upgrade.

Tenders to private sector for integrated web based technology


22. Knowledge Solutions for Ministries, HOMs, Crown Agencies and Private Sector,

a Mentor Matching Program (MMP): Mentors located in NZ who will be matched

to a counterpart partner in the Cook Islands to provide an E- knowledge

solution; MOU between NZ and CI Government about providing access to both

Public and Private Sector to enable exchange and sharing of knowledge, an

additional on line source of skill and capacity; assist technical capacity building,

continuing education, project management, ICT Website managing and

bringing these resources into CI online net.


23. Manage monopolies by the introduction and enforcement of relevant Commerce

Act and other legislation. Empower a suitable body to investigate matters and

enforce legislation, dealing with anti-competitive practices etc.


24. Ministries and Crown Agencies annual business plans be audited for compliance

with policy, legislation obligations, and refocused to include Economic

Development Sector growth functions and only those "should do" functions

whilst ensuring that all business plans strategic policy is contained in the NSDP.

Plans must support economic development. Estimated Cost $100,000


25. Ministry or Agriculture form new farm business PPP's for Ministry activities better

placed in business. Agriculture nurseries, seeds, fertilizer and other farm inputs,

supplies, crops, and production


26. Negotiate with aid donors an arrangement, to contribute to a development fund

(the grow fund concept) that negotiates grant funding from organisations like

ADB and EIB. Fund managed by Bank who will add their management margins,

and manage a Development Finance Fund of low cost finance for development

Estimated Cost $5,000,000

27. On-going review of TCI's monopoly position, and introduction of competition if

and when appropriate


28. Opportunities to allow a wholesale/retail relationship between TCI/local

businesses at profitable rates for all parties, and for resellers to have a clear run

at the market


29. Positive policy to ensure Government creates capacity, adds value, gain

expertise through cooperation and collaboration. Always adopt and use PPP's

and tendering processes to seek information, collaboration, innovation,

research, capacity partnerships and performance of any given Government

Ministry output.


30. Principles that will stimulate a renewed understanding and economic growth.

One Country and One Economy. Taking time right now to learn about our

economy. Understand the urgency around the need for change. Be open minded

to new attitudes and innovative ideas. Collaborate with people and organisations

in new sectors of our society. Seek business and community solutions. Involve a

wider circle of associates and partners in economic discussions, decisions and

policy formulation. The economy is starved of employees. There are so many

opportunities that no one needs fear change or the future. No one needs to fear

loss of a job, but we all may have to change our job or the way we do that job.


31. Promote and form business PPP‟s with the private sector for drivers licenses


32. Provide Policy to direct that existing China Grant fund for Equipment and

Technology assistance is applied by EDC to the EDS's eg Agricultural -

Equipment and Farm Coop systems, Creative, Marine Resources. Tertiary

Education, Trade and Enterprise, Renewable energy etc.



33. Provision of very high speed / low cost LOCAL internet for e-commerce, e-

government, security systems, video streaming at local rather than international

traffic rates


34. Quarantine, heat treatment facility to be offered for tender as a PPP by EDC


35. Recognition of the essential nature of effective telecommunications to the

Financial Services Sector.


36. Removal of Public Sector overlaps by effective cooperation and collaboration

between Public and Private sector intending to achieve a $5m reduction in

operating costs and a $5m growth in revenue.


37. Run a Public health campaign to achieve 51 per cent of the population to achieve

a healthy weight according to the Body Mass Index (BMI).


38. Student Visa category created for study in the Cook Islands.


39. The Economic Task Force be empowered to monitor and conduct a mid term

2011-2012 evaluation and performance assessment during the last quarter

2011 with the view to providing Government with an early assessment in 2012

of the Economy's performance towards economic development and Private

sector led growth. This report to be timed to coordinate with the annual Budget

Policy Statement and the 2012-2013 Appropriation Bill.



1. Align proposed new USP Schools to our EDS and with Ministries and Agencies

new capacity and resources. Research efforts to maximise our business and

trades academic, vocational training and economic opportunities. Private sector

growth requires innovation and diversification in education curriculum and

tertiary programs that support economic development sectors engineering,

technical and scientific practical studies and research.


2. As part of Tourism route underwrite negotiations Government through EDC, will

Introduce policy of support to primary producers in Government underwrite

negotiations with airlines/shipping companies for concessional freight rates for

exports.



3. Centralise via a modern designed Data Computer Centre providing accounting

and data services; consider establishing a PPP. Estimated Cost $200,000

4. EDC will develop Mini Grants and Micro Finance schemes to the economic

development sector for new initiatives - Agriculture, Culture, Marine.


5. EDC will work with Airlines to grow export freight to Rarotonga, Auckland, Los

Angeles and Sydney markets.


6. Establish as a subsidiary of CIIC the Economic Development Corporation, (EDC)

governed by a board of Directors representing all stakeholders. Encompass the

new economic development sectors, ie Agriculture, Culture, Creative Industries

and Tertiary Education and Marine Resources.


7. Extension and diversification of Scholarship contracts and contractual terms to

be aligned to include educational sectors suited to both the Private and Public

Sectors and to provide best solutions for student's post qualification

professional practical experience and best practice educational training.


8. Form new business PPP for Agriculture research and development.


9. Form new business PPP for Procurement and contract management.


10. Form new business PPP for project management, design, engineering and

consultancy services.


11. Form new business PPP for the permitting, inspection, and registration of

building, wiring, plumbing, and drain laying.


12. Form new business PPP for Training programmes, TVET and other tertiary

services.


13. Government will include in the Banking sector review the value of a Development

Finance entity (DFCI) managed by BCI that will offer finance to the EDS. PPP's

and cooperatives generally, with lending based upon supply contracts with

Private sector purchasers, secured by production/outputs. These loans will be

low interest, unsecured; development loans limited to direct production costs.


14. Health Medial insurance and Medivac Scheme. Establish Trust or PPP with

Government and Private sector, integrate with insurance review.



15. Improving Import substitution. A strategy to avoid leakage and maximise growth

in the domestic economy from tourism, export of financial services, agriculture,

fishing, marine resources and cultural and creative industries. Increase local

production and reduce trade barriers.


16. Research and Scientific Development. Government to formulate a RandD policy

and enshrine this policy as a CIIC responsibility delivering expertise to the

Private Sector and deploy PPP's as effective delivery mechanisms. In establishing

RandD policies align and request NZ Government to extend its NZ Trade and

Enterprise (TechNZ) support schemes to the Cook Islands: The Cook Islands

Government to also appropriate budget to manage the scheme .


17. The EDC will coordinate all Pa Enua Economic Development Plans, Government

capex investment programs in each Economic Development Sector,

Cooperatives/PPP's business plans and support these initial, first step, business

models transitions and strategies on an Island by Island basis. The EDC will

ensure the EDS have representation at NSDP and CIIC.


Culture, Creative and Tertiary Industries

The Task Force believes that this is an exciting and innovative new economic

development sector, and that there are great openings for the expansion of creative

industries and the preservation of our cultural heritage to work side by side.

Cultural creative and tertiary education industries provide exciting opportunities for

major innovation of our core culture through education to enterprise. Our People,

our heritage, our future, our priority, our actions to sustain; Value our Creative

Nation, our Art, our Artists, their Intellectual Properties; Traditions, Values, essence

of our independence; Polynesians, voyagers, vibrant, academic, entrepreneurial,

sporting nation. In five years creative industries will have contributed significantly

to our Made in the Cook Islands brand and in 10 years this sector‟s contribution will

continue to grow. The Task Force recommends the following specific actions.


1. EDC to establish Policy and Legislation for Intellectual Property Rights,

Traditional Knowledge Rights, Copyright.



2. Establish a Cultural and Creative Industries Council and establish a strategic

a direction for Creative Cook Islands.


3. Establish the status of the gifted land to USP for the Pacific Studies Campus

at Tuikatoti, Titikaveka and research feasibility of establishment of new USP

Campus. A condition of the gift is to establish Traditional Knowledge as the

centre of the Campus.


4. Introduce Copyright legislation and enforcement.


5. Provide support for artists and the arts, both direct and indirect, through

encouragement of private sector partnerships. eg incorporation of artworks

into public buildings as in the new airport; the improvement and

enhancement of public spaces through government commissioning of public

art.


6. Redesignate the Ministry of Cultural Development as the Ministry of Culture

and Creative Development to emphasize the dynamic nature and economic

significance of cultural and creative industries.



1. Align College curriculum and USP subjects to provide pathways that develop

cultural and creative expression.


2. Designate and develop the precinct comprising The National Museum and

Library, MOCD, USP, CILMS and Galleries, as a national creative hub.


3. Develop a Creative Industries Workforce Skills Qualification - Identify the key

competencies needed for different occupations and for career advancement

in the creative industries.


4. Develop Standards and training programmes introduced to enable workers to

acquire industry recognized competencies.



5. For the Cook Islands to prosper as a creative private sector led economy,

requires specific actions: Introduce a programme for the retention and return

of the creative class – artists and knowledge workers; establish policies to

promote and prefer Cook Islands Made products; start up fund offering

grants and tax incentives for people taking up business ventures based

solely on the creation, production and promotion of cultural products; run a

program of competitive skills development and business development grants

or commissions, allocated annually; support creative and cultural hubs in

the Pa Enua with promotional and marketing centres in Rarotonga; place new

emphasis on creativity, art and design in the school curriculum and in

teacher training; Introduce opportunities for students to develop and

showcase cultural knowledge and creativity in the production of viable

market products through a National Secondary School Culture and Creativity

Competition; develop a Culture and Enterprise course („Art‟s Business‟) for

school leavers incorporating a period of internship in local creative industries

as a means of creating innovation enterprises, employment and economic

growth; promote the creation of the Creative Cook Islands brand.


6. Government to support Creative industries and their contribution to the

sustainable cultural development of cultural assets, from minority languages

to artworks, artefacts and heritage sites. Creative industries are also

environmentally friendly as the primary input is a service (non-finite

creativity) not a finite natural resource.


7. Government to support in policy and PPP's a promising documentary industry

exists in the Cook Islands and provides an important vehicle for cultural

preservation and creativity, with the capacity for onselling to both Cook

Islands Television and Pacific Television to the Tourism sector marketing, UN

agencies with social messages to be delivered.


8. Government to support in policy and PPP's Fashion labels, independent

record labels, visual and performing arts etc can become the foundation of

the Cook Islands Creative industry growth and investment;


9. Government to support in policy and PPP's the Cook Islands, in particular, the

Pa Enua (outer islands) to become a destination for art, culture and

educational tourism.



10. Government to support in policy and PPP's the development of art and craft

provides an opportunity to effectively integrate the Pa Enua into the national

and international economy and sustain their current populations.


11. Government to support in policy and PPP's the Direct marketing to the Cook

Islands population overseas for the sale of music, books, documentaries, art

works, language resources, online podcasts, and on-island cultural,

educational and creative tourism.


12. Increase focus on developing museums and cultural centres on a business

model including incorporating museum shops, cafes, organized tours.


13. Infuse Design Thinking in the Schools and Workforce - Design thinking is

essential to developing a creative and innovative workforce, and improving

business and work processes, customer-centric services and new products.


14. Research and Formalise Preservation and Promotion of cultural heritage and

history – marae, vaka ocean voyaging, performing arts, music in conjunction

with the proposed Cultural, Creative and Tertiary Education Industries

Council


15. Set aside affordable spaces/hubs in Rarotonga and Pa Enua, to encourage

enterprises and designers to collaborate and work towards cutting-edge

design-driven innovation. These Hubs to be supported with prototyping

facilities, incubator programmes and showcase events organized to

encourage cross-pollination of ideas and the creation of innovative products

and services.


16. Set up Campus's in conjunction with USP including: Agriculture School,

English Language, Marine science, Polynesian Navigation, Traditional

knowledge, Chinese Studies, Sports Science and Management, Creative and

Performing Arts.


17. Support appropriate institutional and regulatory frameworks to establish a

“creative nexus” that attracts investors, technology, and businesses.


18. Support Creative Industry Scholarships for advanced learning


19. Support spaces, places and conditions for networking for the development of

the creative industries.



20. Support the Creative sector in developing the following industry sectors,

publishing industries (book publishing houses, newspaper publishers,

publishers of CD records and music); film industries (film, TV, video

production, distribution, cinemas); broadcasting industries (radio/television);

music, visual and performing arts (independent artists, private theatres,

nightclubs, theatrical agencies, technical stage enterprises); journalists /

news agencies; museum shops, arts exhibitions (commercial museum

activities and arts; exhibitions; retail trade of cultural goods (music stores,

book stores, galleries, art trade); architectural offices (interior, garden,

landscaping, design, building and civil engineering architects); Design

industries (industrial, product, fashion, textile and similar design);

advertising (advertising agencies etc.,); Manufacture of software/games

(development of software, games including consultancy, excluding hardware

and data processing services)


21. Through EDC Introduce mini grants and micro financing of small and

medium-sized creative businesses


Financial Services

Financial services have expanded over 30 years and matured into a core economic

sector. It retains significant knowledge and expertise, human resources, and is a

professionally driven industry operating to international standards.

The Task Force believes that international financial services have enormous capacity

to immediately expand and contribute significantly to economic growth. A targeted

investment in legislation and marketing will deliver these benefits to the economy.

Investment in Finance Sector is simple to monitor, faster to convert to a Return on

Investment, and has little to no impact upon the environment. The Task Force

recommends has outlined the following investments. The Task Force recommends

the following specific actions.



1. Achieving improved governance, fiscal control and Standard and Poors

rating. PERCA reporting to Parliament and Select Committee processes re-

established


2. All Ministries and Agencies will support and contribute to the Public sector

achievement of MFEM economic benchmarks for the Crown. Eg MFEM

Personnel benchmark is 40 per cent of revenue and actual 2010--2011 is

43 per cent (proj). PSC targets should be set at "benchmark less 5 per cent"

creating headroom to the benchmark. Therefore personnel target for 2011-

2012 equates to a 38 per cent of revenue and a saving to Government of

approx $2m.


3. Amend Foreign Investor Policy: Foreign capital must enter and remain in

Cook Islands with preference to equity investments. Foreign investor to

contribute to business knowledge. Agree to mentoring obligations and

voluntary contribution of specific expertise to our nation building economic

strategies


4. Captive Insurance as a means of extending risk management strategies and

lowering (and capping) the cost of Government Insurances


5. Conduct a special review into banking with the purpose of achieving a broad

range of lending options for the market in a competitive environment.


6. Create a Foreign Investment Policy that prioritises capital inflows, makes the

Cook Islands an attractive place in which to invest and enables partnerships

with Cook Islanders to also invest in their country.


7. Encourage a savings-based economy and capital inflows by making interest

tax-free for non-residents in the domestic economy.


8. Establish a National Reserve Fund for disaster management, climate change

adaptation and National Sustainable goals under the auspices of legislated

charter and independent trustees



9. Establish a Review (Taskforce) to evaluate various models to meet the long

term social welfare needs of the Cook Islands peoples while creating a large

pool of savings to underpin economic growth: Incorporating

superannuation, Accident Compensation, Health Insurance, Life Insurance,

Asset insurance, Education, Health services and Housing.


10. Establish an Insurance Review to examine appropriate level of Public and

Private Sector insurance particularly in regard to natural disasters, major

risks, limiting Government expenditure. TOR to include options to lower

Insurance cost in the Cook Islands, Joint Venture insurance company to

insure both Public and Private sector assets, eg 51 per cent IC Government,

25 per cent CI Public and 24 per cent International Insurance Company.


11. Establish Monetary policy regarding Cook Island savings and deposits;

incentives to encourage savings; tax free deposits for Cook Islanders

investing at home; economic development fund tailored as an option for

development partners; disaster relief trust fund; environment protection

trust fund; education trust fund; supporting policy of CI Government

appropriation to specific Funds in plan to effect appropriate advertising and

marketing of these funds for development objectives amongst foreign

investors and tourists;


12. Experienced advisor engaged by Government to work with Development

Partners and international agencies to achieve an appropriately risk adjusted

interest rate structure for capital development finance


13. Explore a joint venture for BCI with an overseas bank or sell it: 51 per cent CI

Government, 25 per cent CI Public, and 24 per cent Intl Bank


14. Foreign capital enter the Cook Islands with preference as equity


15. Increase Finance Sector marketing efforts internationally to raise the profile

of the jurisdiction and diversify our client base.


16. Investigate benefits of bringing Superannuation funds back into the country


17. Investigate Development Partners lending to the private sector via BCI



18. Mentoring program with appropriate NZ Government Financial institutions

and consider amongst others: capital raising, enabling public deposit funds,

encouraging and expanding savings and domestic deposits, Cook Islanders

come home fund, land deposits fund


19. MFEM Accounting and Reporting responsibilities, decentralised or centralised

accounting, reporting, financial control. Review the Public Sector Financial

Reporting Consultants TA report. Estimated Cost $100,000

20. Policy for BCI to be the CI Government Bank of First Choice


21. Public Sector and Public Service internal economic review in 2011-2012. A

time for Research and Innovation within the Public Service. Research topics

(a) review KPI's and Ministry Objective, (b) challenge principles behind all

2011-2012 budget appropriation, existing functions, process and methods

(c) innovate new solutions and technologies, (d) simplify outcomes and

reduce cost, (e) engage with Private sector to seek solutions and alternatives


22. Reintroduce 100 per cent depreciation to stimulate capital investment and

construction


23. Reviewing the Charter of BCI, technology systems, banking products and

services to fit the future economic needs of the economy and contribute to

the greater expansion of our economy


24. Single Depository into BCI of all Government Treasury functions (including

ministries, SOE‟s and Crown agencies), funds.



25. Ten ways to approach operational expenditure decisions, budget cuts and

taking on new policy or new functions. (1) Identify, understand and review

the way you discharge Regulatory obligations. (2) Identify and adopt

applicable Government policy. (3) Analyse and prioritise the "must do"

functions. (4) Review all major budget cost items, challenge processes,

systems, established methods, apply rigor, innovation and new technology

solutions to this analysis. (5) Seek to simplify operations and administration,

reduce the number of divisions, committees and reporting agencies. (6)

Consider mergers, closures, privatisation, contracting out as solutions,

achieve expenditure savings and reduce staff numbers. (7) Take all options

into a wider group discussion and involve other Ministries, private sector and

civil society in these new ideas. (8) Stop doing functions if the objective or

benefit is not certain or clear to you. (9) Seek to secure a revenue stream for

any or all functions. (10) Convert tasks into business units, cooperatives and

Public Private Partnerships (PPP's) removing all operating costs from the

budget, placing the function into the private sector and creating an ongoing

shared revenue cashflow for Government from the partnership.


26. The Audit of the Government Crown accounts is near approaching 4 years in

arrears and an unacceptable example of fiscal non-compliance and PSC

appalling standards of performance with severe consequences upon the

Economy. The MFEM Act specifies reporting standards and Government must

introduce new accounting and audit standards to apply from the

commencement of the 2011-2012. The Audit Office and MFEM will

immediately tender all CIIC Holding and subsidiary company Audit and

Accounting services to the Private sector ensuring that standards are raised

and obligations are fundamental to the existence of these institutions.


27. The fall in our Standard and Poors rating has direct implication on the cost of

finance, a key economic component restricting business growth. The Crown

Audited Financial Statements for the year ended 30 June 2012 will be signed

off and tabled at Parliament by 30 November 2012. Therefore Audit for year

ended 30th June 2009 and year ended June 2010 will be contracted to the

private sector. Tenders will require completion of the June 2009 and 2010

audit by 31st December 2011 to enable the audit for the 2011-12 year to

complete unimpeded. Tender document will be released to the private sector

by 31st July 2011.



28. The recent MFEM Act Economic Policy statement releases require significant

changes in the way we administer Government and how we do business. To

achieve these all our impact upon the economic must change. The Economy

has been forecast to achieve growth. Revenue from taxation is forecast to

rise by $8.4m a10 per cent rise in total taxation. However cost of

Government is forecast to take up 90 per cent of those gains. These revenue

targets are fundamental to how we do business in the future. They require a

commitment from every sector especially the Public sector to support and

guarantee this growth. The Cost of Government (operational expenditure)

can only be justified expenditure if that investment contributes to economic

growth. In 2011-2012 Budget Expenditure that does not achieve these

targets should not be incurred enabling saving. A target of $19m savings to

the Public Account should be the 2011-2012 target.


29. Undertake a review of the regulatory framework in the banking sector with a

view to a) understanding the factors that influence interest rate setting, and

b) managing the negative impacts of high interest rates.


30. Undertake immediate review in 2011-2012 of BCI and Banking sector,

engaging services of Sam Knowles (ex Kiwi Bank CEO).


31. Update existing Finance Sector legislation and create new legislation to allow

for new products and services that generate revenue for the trust companies

and fee income to Government.



1. A Strategic Review of Superannuation - Compulsory participation and level of

employer contribution: Allow Cook Islanders to choose to go into the Cook

Islands National Superannuation scheme or any Australian or NZ Government

approved scheme: Portability with NZ: Lower the fund administration costs

through a PPP: Allow the Cook Islands scheme to be invested within the Cook

Islands through ANZ or Westpac (which are currently guaranteed by the

Australian Government - ie lower risk than current investments):

Superannuation Funds would only be available for lending on residential

mortgages within the Cook Island; Arrange reciprocal portability of

superannuation with New Zealand.


2. EDC: Provide a fund for no- or low- interest loans for business in the

Economic Development Sectors (Agric, Creative, Marine) for machinery and

development projects.



3. Encourage new entrants to the Finance Sector both in primary and ancillary

roles.


4. Enter into trade agreements with regional and global partners to stimulate

exports, particularly from the Pa Enua.


5. Establish and Fund an Economic Development Fund with our Development

partners to support and stimulate transition grants to new and existing

businesses with feasible plans and strong people behind them establishing in

the EDS's.


6. Provide tax incentives to encourage a dramatic increase in local savings.


7. Reduce the cost of regulating the International Finance sector; There are 3

SOE‟s / Government Agencies regulating this Finance Sector and their

responsibilities overlap and could be delivered cost effectively with a

rationalisation of these entities into one Regulatory Authority, retaining the 3

regulatory disciplines in separate divisions.


8. We have no alternative other than to prioritise planned investment in our

economy and change institutional view of our economic performance.

External assessments and comparisons of our economy against international

standards result in the damaging SandP view that states we are threatening

our fiscal stability through (1) weakening institutional settings, (2) erosion of

quality and unacceptable performance levels of key Public Service

appointments, (3) declining population, (4) weakening political culture, (5)

narrow tourism based economy, (6) deepening debt burden and an inability

to appreciate the urgency over the last 10 years of investment into economic

infrastructure. Our institutional framework will determine our economic

future and the cost of doing business for every Cook Islander in the Country.

Our economic policies must therefore be so aligned as is the National

Sustainable Development Plan and a reformed National Sustainable

Development Commission. These are the point of commencement of our

economic recovery.


Infrastructure

The Task Force believes the infrastructure investments of the country must be

scoped to existing industry and new economic development sector needs. These

investments will need to be prioritised, costed and funded in consultation with our

Development Partners. Infrastructure investments should also be tendered and built

to acceptable international standards with benefits of private sector participation,


and business growth within the economy. Infrastructure investments are overdue;

planning for them must be implemented and completed as a priority in 2011-2012

with the physical investment completed within ten years. The Task Force

recommends the following specific actions.


1. Address the building code to raise minimum building standards to align with

NZ and Australia building standards. With adverse impacts and devastation

from cyclones and natural disasters the economy must invest wisely and

build better, achieving sound solutions that deliver long term sustainable

building practices.


2. Adopt policy avoiding support for experimental, trial, or pilot renewable

schemes, and implement only proven technology forming part of the overall

100 per cent renewable energy policy.


3. Adopt policy ensuring maximum opportunity for suitable qualified local

contractors to implement renewable energy projects.


4. Adopt policy to pursue lower energy cost through implementation of

renewable green energy, by using solar, wind and hydro technology.


5. Cook Islands Investment Corporation (CIIC) restructure to include activation

of Cook Islands Government Property Corporation (CIGPC) as the Corporation

with board and responsibilities for property investment and management.

Includes policy of non-competing with the private sector Landowners and

developers, thus policy for divestment to landowners. This may come at no

cost, or may still require further costing

6. CIIC: Will own/manage Watsan Infrastructure assets; consider subsidiary

Water Corpn under CIIC; Consider all options is determining Watsan Project

delivery include Build, Operate and Transfer basis.


7. Continue the rollout of Mini grids in all the Pa Enua – north.


8. Develop Donor partner 10 year budget estimates of blended grants and low

cost development partner loans to support a nationally scoped, designed,

costed, fiscally prudent infrastructure capital works plan (achieved in 2011-

0212) that incorporates agreed priority capex works for water, waste,

sanitation, renewables and transport.



9. Develop the alternative reef access in Arorangi to open up opportunities to

grow our cruise business, marketing on a more reliable basis. Enable fishing

and water based activities are less weather dependent.


10. Emergency Management and Disaster recovery projects.


11. Endorse a net metering policy throughout the Cook Islands to allow private

sector grid connection for small scale energy „storage‟.


12. Endorse the Te Aponga 100 per cent renewable energy policy, with Te

Aponga as the lead implementing agency.


13. Establish a private sector tax rebate for renewable energy managed by RMD,

funded by donor funds.


14. Fast track renewable energy engineering and feasibility for the Pa Enua

Tonga.


15. Form new business PPP's for Road and Water works.


16. Introduce policy that ensures that government purchases of energy

consuming equipment is compatible with utilization of renewable energy and

is energy efficient. Prefer electric equipment over fossil-fuel fired equipment

to allow transition to renewable energy.


17. Ministries and MOIP to amend their business plans to cease undertaking

services deliverable by the private sector, and restrict their functions to

regulatory, planning and supervisory.


18. Undertake a study to assess the feasibility of upgrading the airport at

Aitutaki to full international status.




1. A National Transportation Policy with public/private participation. Core

principles include that infrastructure capital plan is implemented,

Assumptions include - tourism numbers rise to 150,000, 100 new rooms in

Aitutaki and Pa Enua, - airports upgrade in Atiu, Manihiki, Aitutaki, Mangaia,

Penrhyn and Pukapuka. - roads in Rarotonga and Aitutaki, - economic

development sectors supported, considerable private sector investment

required.


2. Adopt an energy-efficiency standard similar to the NZ/Australian ‟Minimum

Energy Performance Standard‟ (MEPS) to govern the importation of appliances

and equipment.


3. Aitutaki Port and CBD


4. Atiu Airport upgrade, seal strip to Aitutaki standard. Atiu becomes a hub for

Mitiaro and Mauke, with services operating ex Atiu.


5. Harbour Developments - Mauke, Mitiaro, Penrhyn, Avitu, Avarua, Pukapuka,

Rakahanga, Estimated Cost $54,000,000

6. Implement renewable energy projects - Aitu Estimated Cost

$3,525,000

7. Implement renewable energy projects - Aitutaki Estimated Cost

$8,000,000

8. Implement renewable energy projects - Mangnia Estimated Cost

$3,455,000

9. Implement renewable energy projects - Manihiki Estimated Cost

$2,500,000

10. Implement renewable energy projects - Mauke Estimated Cost $4,000,000

11. Implement renewable energy projects - Mitiaro Estimated Cost $1,500,000

12. Implement renewable energy projects - Nassau Estimated Cost

$350,000

13. Implement renewable energy projects - Palmerston Estimated Cost

$350,000

14. Implement renewable energy projects - Penrhyn Estimated Cost

$2,500,000

15. Implement renewable energy projects - Pukapuka Estimated Cost

$2,400,000

16. Implement renewable energy projects - Rakahanga Estimated Cost

$1,100,000

17. Implement renewable energy projects - Rarotonga Estimated Cost

$200,500,000


18. Implement renewable energy projects - Suwarrow Estimated Cost

$35,000

19. Investigate small scale hydro on Rarotonga for primary generation and

energy storage and integration of renewable energy to the grid


20. Mangaia Airport Upgrade, Relocate and seal new airport


21. Manihiki, Airport Upgrade and seal new airport. Incorporate Airport

Management within CIIC/Airport Authority


22. Penrhyn, Airport Upgrade and seal new airport. Incorporate Airport



23. Pukapuka, Airport Upgrade and seal new airport. Incorporate Airport



24. Review existing proposals for purpose designed built Ship for the Pa Enua.

Complete feasibility for operating service.


25. Upgrading roading for Rarotonga


26. Roads on Rarotonga, plan to complete following Watsan, TAU, Telecom ring

main investments


Marine Resources and Fisheries

These resources are our lagoons, oceans and potentially our seabed. The Task

Force believes that these are all significant underutilised assets that are available to

contribute to growing and sustaining our economy. The Task Force believes it is

imperative that a well researched and managed marine sector flows through to the

economy by way of collaborative partnerships and Cooperatives. The Task Force

recommends the following specific actions.


1. EDC: Expansion of FAD placement and maintenance program, activate by private

sector contracts


2. EDC: Research Pearl management programs identified and initiated, with focus

on: increased productivity, pearl quality, improved husbandry practices



3. EDC: Support Marketing efforts for stimulus and rejuvenation of the pearl

industry.


4. EDC: Undertake a review of Licensing system to maximise the economic benefits

from licenses to reflect the real value of Cook Islands Fisheries to the Cook

Islands economy


5. EDC: Undertake research program to assess effectiveness of management plans

– including water quality, disease, and stock status


6. Introduce the concept of Economic Development Sector (EDS). Agriculture,

Marine Resources, Culture and Creative Industries Tertiary Education and

Commercial and Residential Property will be a approved Economic Development

Sectors. These sectors will be managed by the EDC. During a reasonably long

development period, say 5 years all revenue from these EDS in the Pa Enua will

be VAT exempt and labour engaged in the sectors in the Pa Enua will be tax

free. The MFEM will cost these exemptions and confirm to Government that they

are sustainable exemptions that do not reduce or deplete the tax revenue

estimates. In partnership with Government our development partners will be

encouraged to provide support during the development period.


7. MMR: Complete the exploration, boundary delineation and sovereign

negotiations to secure the nations EEZ and Cook Islands seabed .



1. A focus of the EDC to Improve EDS income generating opportunities for the

private sector particularly in the Pa Enua, increase technical and scientific

assistance and support new industry establishment.


2. EDC and MMR - Marine conservation, biodiversity and eco-tourism: Support the

protection and conservation of our natural marine biodiversity, it‟s affiliated

customary practices and knowledge and potential commercialisation such as

marine eco-tourism.


3. EDC and MMR support: Plan a strategy for exploration of other mineral or

petroleum resources.


4. EDC: Develop the strategy to advance Cook Islands business interests, expand

economic development and fulfil its international and regional obligations in

regard to offshore fisheries Estimated Cost $50,000


5. EDC: With support from Marine resources Offshore industry development plan

prepared and implemented in PPP's with fishing industry, licence holders and

stakeholders: infrastructure, USP Marine School, markets, products, capacity

building in private sector.


6. EDC: Build stakeholder capacity to develop, operate successful business in this

sector; integrated with development and implementation of appropriate fisheries

management plans.


7. EDC: Commercialise potential business opportunities using Cooperatives and

PPPs active in marine eco-tourism, pharmaceutical and traditional medicine

research.


8. EDC: Develop and expand production base for profitable farming including

extending to other islands.


9. EDC: Develop Cooperatives/PPP's for sustainable fishing and conservation

practices resulting in long term food security and traditional subsistence

practices.


10. EDC: Functions to include Research programs to: identify and develop new

management and market opportunities, establish production/farming and

increase profitability, sustain and add value to the resource, Secure funding for

innovation and research.


11. EDC: Manage with MMR non-living marine resources (nodules). Policy support of

the wise research program into our non-living marine resources in cooperation

with private sector and recognised international corporations for our long term

sustainable development.


12. EDC: Merge Pearl Authority functions into EDC. Rejuvenate Pearl Industry

through a growers cooperative and improved productivity and environmental

management.


13. EDC: Record and protect the traditional knowledge and cultures of marine

resources.


14. EDC: representing the committed stakeholders (e.g. industry, Researchers,

Island Councils, Cooperatives etc) work to integrate and implement development

plans.



15. EDC: Support Pearl farmers management decisions using improved knowledge

and information, to improve profitability.


16. EDC: With MMR advisory support analysis and priorities for investment in the

development of new and existing aquaculture and commercial inshore fisheries

opportunities.


17. EDC: With Marine Resources - Inshore Fisheries and Aquaculture Development:

Develop Fishing Cooperatives Improving income generating opportunities and

scale of operations for the private sector particularly in the Northern Group,

through increased provision of technical and scientific assistance, direction of

machinery/Equipment Grants and utilisation and operation of Penrhyn research

station.


18. EDC: With Marine Resources acting in Offshore Fisheries Development: Expand

private sector income earning opportunities from sustainably managed offshore

fisheries through capacity building, and infrastructure and market development,

quota's, distribution and processing, associated businesses being supported by

Offshore Fishing Development.


19. EDC: With Marine Resources will promote and partner small scale fisheries and

aquaculture Cooperatives/PPP's; utilise where possible, knowledge of our license

holders to exchange knowledge gain experience and develop domestic fishing

using the international capacities and expertise of our partnering license

holders.


20. EDC: With Marine Resources will promote Marine eco-tourism links in Pa Enua

using PPP's and Cooperatives.


21. EDC: With support from Marine Resources will develop, expand and diversify

offshore fishing via designated and exploratory licences. The license enables

the fishing industry in the Cook Islands and new conditions of these licenses will

include guarantees to support, priorities and contribute to economic growth of

the Cook Islands business sector. Licenses shall be an avenue for growth of our

fishing industry, enabling fishing cooperatives and PPP's and overlaps into other

marine products and other businesses in the EDS of the Cook Islands.



22. Incorporate surveillance and monitoring systems within our CI industry

expansion plans to meet identified compliance and research needs, effective

management of offshore fisheries, and regional / international obligations,

consider privatisation and enabling private sector participation in these

functions.


23. MMR: Ensure monitoring and compliance of lagoon and management plan and

farmer code of conduct particularly on Manihiki.


24. MMR: Invest in Certification and sanitary systems to improve quality and market

access to international markets e.g. EU, USA and Japan.


25. MMR: Research development plans for species and opportunities identified as

having the most potential (chosen from tuna, deep sea fish, trochus, giant

clams, live rock, seaweed, prawns, milkfish, aquarium, parrot fish, snapper,

etc.), and support EDC to develop Cooperatives and PPP's with business.


26. MMR: Support the USP Maritime School, website and communications strategy

and Improve Marine industry analysis and policy advice to Government.


27. The EDC to facilitate research and development functions to Improve the quality

of Marine product through better farm husbandry systems, based on enhanced

techniques, capability building, resulting in increased production.


28. The EDC to expand income earning opportunities from sustainably managed

offshore fisheries, through Cooperatives, PPP's capacity building, infrastructure

and market development, fisheries management plans and innovative strategies,

research and monitoring.


29. With EDC support, access International Agencies and Institutional technical

advise for the establishment of a seabed nodule mining industry around

appropriate International environmental preservation standards.



Public Sector


1. An anticipated outcome of the new Economic Development policies will be the

resetting of priorities. Recognising these priorities will identify the clashes

between available time and capacity and budget capacity/appropriation and

finance. The recalculation of priorities towards those supporting private sector

growth and the economy will determine the ranking of these options and the

alternatives requiring further consideration and revised decisions.


2. Communication strategy to engage the nation with information about the new

economic development policy. Coverage specifically to all sectors from Public to

Pa Enua, Civil Society and communities in our economy. Strategy will inform the

country of economy's needs, the innovations and new policies and strategies

essential for the achievement of change


3. In adopting new Economic policy for the development of private sector led

economic growth, ministries will recognise that achieving these policy outcomes

requires not only adjustment to their business plans but also a refocus Ministry

resources towards domestic investment (expenditure) ie outcomes directed

specifically to growing the economy.


4. International representation and strategies to establish new international

relationships be deferred infavour of National objectives to balance the budget.


5. Ministries and Agencies will cooperate with Private Sector to align economic

strategy, development plans, business opportunities, partnerships, effective

collaboration, and "how to" solutions and capacity building,



6. Planning in the Economy. Economy growth requires a strategic coordination of

all sectors in the economy. The process of planned economic development

involves participation of all sectors of society in determining the best options for

the Nation. Whilst planning is a continuous process, to be effective it must drive

actions and outcomes otherwise it is sterile and meaningless. In the same way

the outcomes of a plan to action must be assessed, evaluated and be influential

in the physical performance and advancement of Government actions and well

as controlling the ongoing corrective cycle of strategic planning. The process is

dynamic, interactive, integrated, innovative and vigorous, demands action and

performance of all Ministries and Crown Agencies. Therefore the 5 year National

Sustainable Development Plan will be incorporated in every Ministry and Crown

Agency Business Plan who will each be tasked to achieve these outcomes. The

NSDC will be restructured to include representation of all sectors in the

economy, civil Society, the Private and Public sector; once the 5 year plan is

established it will be ongoing, critiqued, evaluated, adjusted and added to

annually, providing the strategic direction for sustainable social and economic

development. The National Sustainable Development Commission will receive

bi-annual reports from OPM supported by PSC and CIIC detailed reports

assessing their ministries and corporations performance in delivering the

business plan. The NSDC will maintain a website and provide an independent

updated report quarterly to the Public upon the progress to implement the

National Plan.


7. Population 10 year statistics . Change is an economic necessity. Population

Residents in 2001 - 18,027, PS employees 1,708, workforce then 9.5 per cent of

Population. Residents in 2011 - 10,800, PS employees 1,736, workforce now

16 per cent of Pop. 1,736 employees to administer 10,800 people is not

efficiency or economically justifiable.



8. The effective delivery by the Public Service Commission (PSC) of its functions

impact directly upon the efficiency of the economy. The PSC has a key role to

ensure regulatory responsibility is a core Ministry outcome. Ministry business

plans must be aligned to their regulatory requirements. PSC systems must

ensure compliance and timely performance are key deliverables. Business plans

must also align to Government policy. They must reflect what functions each

Ministry should administer. Therefore staff performance and continuing

employment should be subject to these requirements. Budgets must align only

to these outputs. The efficiency of the PSC and the public sector is best

expressed in the performance outputs of Ministries, employee work habits, team

spirit, respect for work standards. When comparing these to the size of the

workforce and labour cost to the economy the key performance indicators are

not good and could be significantly more effectively implemented. Better use of

procedures manuals, staff education and training programs to raise performance

level and accountability could quite likely reduce staff numbers.


9. The PSC current reform should coordinate its policy implementation with

Economic Task Force recommendations in establishing the functions to be

undertaken by each reporting agency, including functions and outcomes that

support economic development policy, modernise and centralise functions,

update employee contracts terms and conditions of employment, strict

performance evaluation, every employee to undertake training and continuing

education requirements, provision of service manuals and customer service

levels of standard.


10. This Communications strategy will include employing a Press Secretary solely

responsible for managing the communication strategy, the website, an economic

development newsletters, specific training programs to be effective immediately

and coordinating the planned focus during 2011-2012 Budget year.


11. To achieve rising incomes and economic performance invest in education. The

Ministry of Education will review their budget strategy and capacity to meet the

market and employ appropriately qualified teaching staff. This outcome is

fundamental to raising the academic teaching standards. Transition costs to be

met by Development Partners.


12. Up skill and focus resources of ICT Department to manage communications

strategy for Economic Development policies and strategies, coordinate with ETF

and CIIC.




1. Develop a 10 year national sports and events development plan and assist with

its implementation with a view towards specific performance goals in; Cook

Islands Games, Pacific Games, Commonwealth Games, Olympic Games, World

rankings in prioritised team sports and individual sports.


2. Establish a Sports Institute and Integrate with CISNOC, Institute of Sports

Excellence, USP School of Sports Science, SENZ, Sports and Event Tourism,

National Federations and their International federations.


3. Implement the National Sports Policy and Sports Act; a framework for the

development of Sport.


Tourism

Whilst the tourism sector has matured over its 30 year life and appears well

established, and even mature in some aspects, it has not generally been able to

produce the returns essential for reinvestment of its aging plant and wealth

creation. The Task Force believes the sector holds significant potential for growth

and innovation and is the key to the comprehensive expansion of our national

economy. The Task Force recommends the following specific actions.


1. Construct Walk ways and cycle ways around Rarotonga, Aitutaki and all Southern

Group by linking in with the NZ Cycle Way promote eco-tourism, and co-

branding in international markets with Tourism NZ.


2. Continue aviation underwrites through government subsidy of the Los Angeles

and Sydney routes.


3. Coordinate Internet Marketing for the Cook Islands and include in all marketing

plans.


4. Develop a Cook Islands biological and organic foods brand for tourism, export

and local consumption.


5. Develop a Tourism Master Plan 2011-2021.


6. Enforce Lagoon Management Plans for Rarotonga and Aitutaki.



7. Implement Strategy to establish Bird Sanctuaries appropriately located

throughout the country.


8. Improve destination sales and marketing including restructured head office and

overseas offices.


9. Institute policy that supports the establishment of a retirement home industry

preferably in the Pa Enua.


10. Integrated Tourism strategy; Ensure Lagoon Management Plans and Raui

supported by Legislation on Rarotonga and Aitutaki.


11. Link environmental preservation and branding into the overall destination

development strategy and brand image.


12. Measuring Economic impact of tourism.


13. Revitalise Tourism and Cook Islands brand.


14. Tourism education programme; specialist hospitality training and education.


15. Tourism infrastructure development for Aitutaki, Aitu, Mangia, Mauke, Mitiaro,

Northern Group.



1. Develop a distinctive Cook Islands cuisine based on fresh, local, organic foods

and the best of international food trends.


2. Ensure Raui to be supported by legislation on Rarotonga and Aitutaki.


3. Establish Events Tourism drawing upon our Cultural and Creative Industries, our

expanded, refocused private sector developments in Agriculture, Fishing,

Natural Resources, Sport and Trade and Enterprise.


4. Management plan for reserves parks, flora and forna.


5. Redevelop Punanga Nui to a six day, all weather, day and evening market

including; specific markets for fashion, arts and craft, pearls; food court;

farmers market; produce auction house.



III. FUNCTIONAL REVIEW OF GOVERNMENT


Why the Government is undertaking a Functional Review

The Government has indicated from the outset that it is committed to reviewing the

machinery of government- particularly reviewing the public service and crown

agencies toward better defining what it „should‟ and „should‟ not do, and what is

best left to the private sector. The overall outcome of the review is to improve the

performance of government and to enable government to focus on what it must and

should do- and do it more effectively and efficiently.

This means that improved performance toward defined outcomes „drives‟ the skill

requirement of the public service. The number and type of staff required is

determined by the outputs set by government.

Improving the performance of the public service by re-defining its role and scope

and the manner by which it conducts its business requires a robust methodology. It

requires a set of „ Guiding Principles‟ directed toward achieving a public sector that

undertakes an agreed set of functions and with staff who understand and are

committed to outputs and quality performance.

With this in mind, the Government commenced in March 2011, a Functional Review

of the public service with the assistance of the Asian Development Bank. The

Functional Review is being undertaken in two phases:

Phase 1 – Assessing the current Public Service functions:

what government must do (as defined in the Constitution, Legislation and

binding bilateral and international Treaties;

Assessing what government should do (as required in key strategic

statements such as the National Strategic Development Plan, and as

suggested by reviews such as that conducted by the Economic Task Force);

Using decision trees and other tools to determine what is not the core

business of government and should be: left to the private sector; contracted

out or simply, stopped.

Phase 2 – Detailed design for implementation of the changes to the scope and

functions of government and implementation, to achieve a function based

performance- centered public service with staff that have the right skills for the job

and are committed to outputs and long term outcomes.


What the Functional Review Will Cover

Traditionally government is comprised of three distinct branches, the Judiciary, the

Legislature and the Executive. The Executive consists of the Public Sector which is

made up of the Public Service, Crown Agencies and State Owned Enterprises. The

functional review focuses on the Public Service and to a lesser degree on Crown

Agencies. It does not include State Owned Enterprises.

The Functional Review Team has established a set of guiding principles which will

underlie both their approach to the tasks, and their recommendations. The

principles can also be used in the future, after the recommendations of the review

are implemented, to determine the validity of proposed new functions or to

continue the process of reviewing existing functions to ensure government

continues to focus on what it defines as its core business.

Clarifying the Scope and Depth of Government

The scope of government relates to the overall functions of government. That is:

the range of functions that government undertakes. For example the government

performs functions in the health, education, justice, finance, economic,

infrastructure, environment, transport and policing sectors.

The depth of government relates to the functions that are performed within

individual organisations in government, for instance in education you may have

functions relating to the provision of pre, primary, secondary, vocational and

tertiary education.

Defining the current scope of government

Defining the role and scope of government requires addressing the three critical

questions:

What must government do?

What government „should‟ do?

What should government not do?

The answers provide a baseline of functions, clarifying what government is doing

currently, and outlines criteria on what it should and should not be undertaken.

Guiding principles 1 to 4 are the basic framework for determining the functions

that government must undertake; should undertake and should not undertake.


Relocating a function will require identifying which organisation- within or outside

government- would be best placed to undertake that function (e.g. contract it out;

a public private partnership arrangement; or privatisation).

Ceasing a function will then leave it for the market or civil society to determine

whether it needs to be undertaken, or it can become an individual responsibility.

The Functional Review Team have identified from the Constitution, and relevant

legal documents, all the functions that are contained in these documents and are in

the process of classifying them according to the Guiding Principles below.

Guiding Principles 1 – 4 for Determining the Scope of Government

Guiding Principle

1 –

What government

must do

The core role for government is in performing legal and

regulatory functions for the „peace, order and good

government of the Cook Islands‟ as defined in:

the constitution of the Cook Islands;

government legislation; and

regional and international treaties

Guiding Principle

2 and 3 –

What should

government do

Government „should‟ perform or facilitate the provision of

services required for planned development, whether

economic, social or environmental. This should link to the

National Strategic Development Plan (NSDP) and other major

bodies of work including the output of the Economic Task

Force (ETF), Budget Support Group (BSG) and commitments

made by Government during the election.

In some cases government will perform these functions itself,

in others it may facilitate the services but not perform them

(e.g. establishing a Hospitality Training school, which is of a

broad economic value); or regulate the function but not

deliver it (e.g. private health or education facilities).

Government should, in the interests of human rights and

equality of access to services, finance social obligations which

enable equitable or essential delivery of services which are not

undertaken by the private sector or NGOs.

Social obligations are the provision of finance or services by

government, where the potential revenue is outstripped by

cost of service provision.

In these instances government‟s obligation is to take up

unprofitable services that other sectors will not undertake, or

will only undertake if financed by government. These are


generally undertaken for social or law and order reasons (such

as unprofitable street lighting; inter-island shipping services;

and telecommunications to the Outer Islands) and are in

deemed in the public interest.

Guiding Principle

4 -

What should

Government not

do

Government should not compete with the private sector or

undertake functions that can be done by a functioning

market, to service standards determined by government.

This addresses the requirement for best practice government

and can be summarised as:

reducing the service delivery role;

strengthening the regulatory role to improve service

delivery;

eliminating duplication both within government and

between government and the private and NGO sectors;

consolidating services; especially of common functions and

outsource where effective and commercially viable ;

strengthening partnerships; and

encouraging innovation.

Defining the Depth of Government and Grouping Functions into Sectors

The Functional Review Team are utilising a commonly used framework4 for

grouping government functions.

The scope of government will be primarily grouped into policy, regulatory,

coordination, service delivery and support functions. Under each grouping will be

the grouping of functions this will assist in eliminating duplication and improving

efficiencies.

Group 1 - Policy functions: such as strategic planning, legal drafting, development

of performance contracts, minimum standards, norms, policy analysis and

evaluation, forecasting. These functions tend to be regarded as „inherently

governmental‟ requiring specialist skills, and are usually provided by core ministries

within central government.

Group 2 - Regulatory functions: such as licensing, certification, market sector

regulation, permissions, accreditation, inspection, compliance and financial audit.

These functions are also often regarded as „inherently governmental‟ and provided

by statutory commissions and other arms length bodies within central government.

It is widely maintained that regulatory functions should be separated from those

4 Methodology for Functional Review DAI 2006, Bannock 1999


policy functions that determine the regulations, and service delivery functions that

provide services to customers.

Group 3 - Co-ordination, supervision and performance monitoring functions: such

as coordination relationships between different bodies, monitoring the performance

of subsidiary bodies, facilitating and enabling subsidiary bodies to reach their

performance targets. These functions also tend to be regarded as „inherently

governmental‟ and undertaken by core ministries.

Group 4 - Service delivery functions: such as the provision of products or services

to internal (other public bodies) or external (farmers, foresters, fishermen)

customers. Service delivery is often provided outside of central government

through contracting arrangements or by sub-national government. When

undertaken by central government this is normally performed by supervised bodies

or executing agencies.

Group 5 - Support functions: such as financial management, human resources

management, information systems, infrastructure, staff training, efficiency review

and management audit; and secretarial services. These are increasingly contracted

out except when regarded as inherently governmental for security or other reasons.

Guiding Principles 5, 6 and 7 are aimed at consolidating linkages between and

within the above groups, and improving efficiencies of delivery of the function.

Guiding Principles 5 – 7 for Determining Functions of Government

Guiding Principle

5 –

Ensure Functions

are Vertically

Aligned

Ensure identified functions (what the Ministry does to achieve

its sector goals) are clearly linked to the sector goals.

In a whole of government review of the sector goals, the

scope of government must be identified first (Guiding

Principles 1-3) The functions - how it is done can then be

allocated to the appropriate sector and clearly aligned to the

scope and sectors of government.

Guiding Principle

6 –

What should

government do

Ensure Sector Ministry reviews focus on identification of:

Core functions, linked to an agreed scope

Non-core functions that must 'stay' since they are:

essential; or

cannot be better placed anywhere else.

In some cases a function may be core to government but

located in an inappropriate sector (non-core to the sector).


In other cases a non- core function may have to stay,

because it is essential and there is no better option for its

location

Guiding Principle

7 -

Identifying Non

Essential functions

Assessment of non-core functions which are „non-essential‟

and could be placed somewhere else to determine whether

to:

do nothing; but „ring-fenced‟ for further action;

integrate and consolidate within another internal function;

split the function to retain the core component;

transfer out;

contract out;

privatise; or

cease.

How the Functional Review Team will Move Forward

Using the above guiding principles the Functional Review Team will undertake a

process to identify what should be done by government.

1 If a function is identified as something government „must‟ or „should do it can

be confirmed as such through a simple analysis.

2 If a function is confirmed as valid, then a recommendation will be made as to

whether that function is best done within government or could be undertaken by

the private sector or NGO‟s

3 If a function is determined as best undertaken within government a decision

must be made as to whether it is a „unique‟ stand-alone function or whether it

can be merged with other common functions to improve technical breadth and

depth of the combined functional group and improve efficiency of delivery.

What the Functional Review Team will do

There are essentially six steps to be undertaken by the Functional Review Team in

making a recommendation to Government, they are:

Confirming functional requirements emerging from the Constitution; legislation

and treaties.

Confirming sectors using legal, constitutional and strategic planning

requirements (NSDP).

Comparing legal and constitutional requirements with business plan functions;

identifying gaps and overlaps and core/ non-core functions.

Grouping core functions under sectors and develop exit strategies for non-core

functions.


Functional Review

Final Report on

Structures to Cabinet

16th November 2011

Preparing high level function-based organisation structures for each sector.

Developing options for sector management.


Budget Consultation

Submissions due

31 October 2011

5. PROVIDING YOUR FEEDBACK

The Government of the Cook Islands welcomes your documented feedback on how

it can improve its delivery of results to Cook Islanders in the most efficient way,

submitted via

Email to : [email protected]

subject heading: Budget Consultation Document 2012-13

OR

Post to : Budget Consultation Document 2012-13

Ministry of Finance and Economic Management

PO Box 120

Avarua, Rarotonga

All submissions should be received by 31 October 2011 and will be considered by

relevant departments as an input into the planning process for the 2012-13

Budget.

All submissions and their authors will be uploaded and made publicly available on

the MFEM website www.mfem.gov.ck unless otherwise requested.

For further information please email [email protected] or call our Budget

and Economic Policy Division on +682 29511.


http://www.mfem.gov.ck/


2012-13 budget consultation - · pdf file2012-13 budget consultation ... ppp public private...

Documents