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Appropriation Bill Appropriations and Commentary

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Appropriation Bill Appropriations and Commentary COOK ISLANDS GOVERNMENT BUDGET ESTIMATES 2014/2015 Book 1 Appropriation Bill Appropriations and Commentary Hon. Mark Brown Minister of Finance October 2014 Table of Contents 1 STATEMENT OF RESPONSIBILITY 1 2 APPROPRIATION BILL 2014/15 4 3 GOVERNMENT FINANCIAL STATISTICS OPERATING STATEMENT .............................. 10 3.1 GFS Net Operating Balance ..................................................................................... 10 3.2 GFS Operating Revenue ........................................................................................... 11 3.3 GFS Operating Expenditure ..................................................................................... 11 4 FISCAL UPDATE ...................................................................................................... 11 4.1 Overview .................................................................................................................. 11 4.2 Fiscal Responsibility Ratios ...................................................................................... 17 5 ECONOMIC UPDATE ............................................................................................... 23 5.1 Introduction ............................................................................................................. 23 5.2 Gross Domestic Product (GDP) ................................................................................ 26 5.3 Consumer Price Index (CPI) ..................................................................................... 29 5.4 Tourism .................................................................................................................... 30 5.5 Marine Resources .................................................................................................... 37 5.6 Agriculture ............................................................................................................... 41 5.7 Goods Exports and Imports ..................................................................................... 42 5.8 Banking and Finance ................................................................................................ 46 5.9 Financial Services Industry ...................................................................................... 48 5.10 Sensitivity Analysis ................................................................................................... 49 5.11 Special report: Depopulation – Income and cost of living ...................................... 50 6 CLASSIFICATION OF FUNCTIONS OF GOVERNMENT (COFOG) ................................... 55 7 REVENUE ............................................................................................................... 58 7.1 Total Revenue .......................................................................................................... 58 7.2 Revenue Initiatives for 2014/15 .............................................................................. 61 7.3 Taxes ........................................................................................................................ 63 7.4 Social Contributions ................................................................................................. 66 7.5 Grants ...................................................................................................................... 67 7.6 Other Revenue ......................................................................................................... 67 8 EXPENDITURE ........................................................................................................ 73 8.1 Total Expenditure .................................................................................................... 73 8.2 New Expenditure Initiatives .................................................................................... 79 8.3 Savings in Expenditure ............................................................................................. 82 8.4 Ministerial Support Offices ...................................................................................... 83 i 8.5 Payments on Behalf of the Crown ........................................................................... 83 9 TAX EXPENDITURE ................................................................................................. 94 10 CROWN DEBT ........................................................................................................ 96 10.1 The Crown Loan Reserve Fund (LRF) ....................................................................... 96 10.2 Gross Debt owed by the Crown ............................................................................... 99 10.3 Net Debt ................................................................................................................ 104 10.4 Crown Debt Exchange Rate Sensitivity Analysis .................................................... 105 10.5 Future Borrowings and Fiscal Responsibility Ratios relating to Debt .................... 106 10.6 Other State Owned Enterprise Debt ..................................................................... 111 10.7 Net Worth .............................................................................................................. 112 10.8 Specific Financial Risks ........................................................................................... 113 11 CIIC AND STATE OWN ENTERPRISES....................................................................... 114 11.1 CIIC ......................................................................................................................... 114 11.2 Airport Authority ................................................................................................... 115 11.3 Bank of the Cook Islands ....................................................................................... 116 11.4 Ports Authority ...................................................................................................... 117 11.5 Te Aponga Uira ...................................................................................................... 118 12 PUBLIC SECTOR STAFFING ..................................................................................... 119 12.1 Public Service Departments, Crown and Statutory Agencies and Others ............. 119 12.2 Employee Data ...................................................................................................... 120 12.3 Remuneration ranges ............................................................................................ 122 13 COOK ISLANDS TECHNICAL ASSISTANCE FUND ....................................................... 123 14 NATIONAL SUSTAINABLE DEVELOPMENT PLAN 2011-2015 (NSDP) ......................... 125 15 PA ENUA............................................................................................................... 128 15.1 The Pa Enua Funding Model .................................................................................. 128 15.2 Other agency support targeting the Pa Enua ........................................................ 130 15.3 The Economics of the Pa Enua .............................................................................. 134 16 OFFICIAL DEVELOPMENT ASSISTANCE (ODA) BUDGET 2012/13 - 2015/16 ............... 139 16.1 Introduction ........................................................................................................... 139 16.2 Variances ............................................................................................................... 141 16.3 ODA Activity Detail ................................................................................................ 153 16.4 Airport Authority ................................................................................................... 154 16.5 Cook Islands Investment Corporation ................................................................... 154 16.6 Cook Islands Tourism Corporation ........................................................................ 155 16.7 Ministry of Agriculture .......................................................................................... 156 16.8 Ministry of Education ............................................................................................ 156 16.9 Ministry of Finance and Economic Management .................................................. 158 ii 16.10 Ministry of Foreign Affairs and Immigration ..................................................... 163 16.11 Ministry of Health .............................................................................................. 163 16.12 Ministry of Internal Affairs ................................................................................ 164 16.13 Infrastructure Cook Islands ............................................................................... 166 16.14 National Environment Service ........................................................................... 166 16.15 Office of the Prime Minister (OPM) .................................................................. 169 16.16 Cook Island Police Service ................................................................................. 172 16.17 Office of the Public Service Commissioner ........................................................ 173 16.18 Seabed Minerals Authority ................................................................................ 176 17 STATEMENT OF ACCOUNTING POLICIES ................................................................
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