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FINANCIAL STATEMENT APPROPRIATION BILL 2010-11 SPEECH by the HON. WILKIE RASMUSSEN Parliament Sitting on Wednesday 11 August

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FINANCIAL STATEMENT APPROPRIATION BILL 2010-11 SPEECH by the HON. WILKIE RASMUSSEN Parliament Sitting on Wednesday 11 August FINANCIAL STATEMENT APPROPRIATION BILL 2010-11 SPEECH BY THE HON. WILKIE RASMUSSEN Parliament Sitting on Wednesday 11th August 2010 Extract from Hansard – Proof Only ORDERS OF THE DAY Second reading of the Appropriation Bill 2010-11. I call upon the Minister of Finance Honourable Wilkie Rasmussen. HON W. RASMUSSEN: Kia Orana again to you Mr Speaker and all the staff members of this House. Kia Orana also to our Prime Minister and Deputy Prime Minister Robert Wigmore, to all Ministers of the Crown, Kia Orana. Members in Government Kia Orana. To the Leader and Deputy of the Opposition the Honourable Tom Marsters and the Honourable Teina Bishop respectively and to your colleagues in the Opposition Kia Orana. Kia Orana to all of us in this Hon. House and I commend us for gathering together as we continue to look at the appropriation for the next financial year. Kia Orana also to all our people who are listening in to our deliberation this afternoon to the Ui Ariki, Ui Mataiapo, the Ui Rangatira and the Aronga Mana Kia Orana. To all our people both in the north and the southern groups and to all our people in Rarotonga I extend greetings to you in the love of our Lord. Mr Speaker, I move: That the Appropriation Bill for 2010-11 be read a Second time And in doing so Mr Speaker, I seek your indulgence to make a statement in relation to that Bill. But first of all I just wish to again commend and say thank you to all Members of this House for the cooperation and the understanding of the situation that we are currently in with regards to the need for the Supplementary and Validation Bill that we had just passed and I say thank you to all that supported that. When we get to the debates on the principles and merits of this Bill I will reflect on some of the questions that were asked earlier because most of those questions I believe were covered in this Appropriation Bill. But I believe over the few days now since we have had a copy of the Appropriation Bill that we have familiarised ourselves with its contents, it may not be that difficult a Bill to pass. But let me say that this new fiscal year 2010-11 will not be one without its challenges. Indeed when I discussed the national economic and budgetary situation with the Ministry of Finance and Economic Management team some six months ago, the sobering and somewhat gloomy prediction was that this current year 2010-11 would be quite a challenging one or a difficult one. With an indication of a down turn in the arrival of tourists in the early months of this year the excitement of record breaking tourist numbers in the previous year started to look like something of the past. And of course who can forget the devastation caused by Cyclone Pat on Aitutaki combined with a series of cyclones and warnings and with the destructive force of 1 winds of Tropical Depression10F on Tongareva within that same period and amongst other things, it deepen the economic gloom that appeared to be taken form around us. In addition the Order by the High court and indeed by the Court of Appeal for Government to honour the terms of the settlement agreement between Government and Apex Agencies Ltd operating as TOA Petroleum, and TRIAD, further served to immerse a national budget into further gloom. And yet Mr Speaker, from the deepest part of all of that gloominess, there was a spark and it quickly burst into flame, I would say a flame of inspiration. In the wake of cyclone Pat devastation of Aitutaki and the resulting despair amongst the people of that island we the people of the Cook Islands came together as a united nation of one people with one objective to support the people of Aitutaki in their time of great need. From Pukapuka to Palmerston, Penrhyn to Manihiki and Rakahanga, Nga-Pu-Toru to Mangaia and to us here in Rarotonga we were as one. The sense of unity of purpose permeated through our communities in Australia and New Zealand and we as one people were galvanized into action through an outpouring of support for the people of Aitutaki that I, for one, have not seen since Cyclone Martin’s tragic visitation of Manihiki. Mr Speaker and Honourable Members of this House, it is that sense of unity of purpose that inspires us to work as one people in response to catastrophic events that visit some of our people that I am referring to as the “flame of inspiration”. Honourable Members, I ask this question with us in this House – in debating the merits of the Appropriation Bill before us, must we do so with a sense of unity of purpose for the benefit of all our people or must we create our own cyclone of disunity before we can recognise that the flame of inspiration to work together for the common good of all our people. I believe Mr Speaker that over the last few days we have demonstrated that spirit of unity and the Opposition of this Honourable House stand united and open minded behind this Appropriation Bill. I also have no doubt that those on the left hand side of this Honourable House that is the Government side are imbued with that same sense of purpose in pursuing what is best for the people of the Cook Islands. Mr Speaker, it is these types of actions and cooperation that we as Members of Parliament must demonstrate to the people of this country and to the voters of this country that we do actually care as Members of Parliament about our people. And that we are not as many of them or some of them have criticised people with particular self interest and particular personal agendas, instead we are here because we have been given the mandate by the people of this country to lead and to act on their behalf. If I may add, I know every Member of this House has obligations and sometimes their pay does not stretch to the end of fortnight because of the obligations that they have to the community at large. So I humbly ask our people out there to give it second thoughts as to their sometimes dismissive attitude of the jobs that we had to do. Mr Speaker I am not saying that there should not be any debate on this Bill, but on the contrary I believe that our capacity to respond adequately to questions from the floor on the merits of the Bill will serve to reassure all including our people out there 2 listening, I know they are listening in the Northern Group islands on radio that the contents of the Bill are for their best interests. It is for that reason that I stated earlier that we stand united and open minded behind this Appropriation Bill noting that the operative word in this regard is open mindedness. We must also acknowledge that there may be times when we may have to agree to disagree in the spirit of our parliament tradition. Mr Speaker and Honourable Members let me now briefly outline the projected economic settings within which budget 2010-11 is expected to operate. Despite a contraction in 2008-09, the economy has bounced back into a positive growth albeit at a much lower or slower pace than the growth rates expected prior to the Global Economic Crisis. Real GDP growth in 2009-10 is estimated at 0.8% with the expectation that output in 2010-11 will wee a gradual growth to 0.9% moderating to around 1.5% in the future years. Following a spike in 2008-09 of 10.3%, inflation is estimated to significantly slow to 0.4% n 2010-11 and moderate to below 3% in the outer years predominantly as a result of lower global fuel prices brought about by slower demand in response to the GEC. Visitor arrivals for financial year 2009-10 are estimated to be 99,500 people, an increase of 2.7% when compared to 2008-09 while Visitor arrivals for the 2010-11 are projected to be 101,400 people an increase of 1.9% in compared to the previous year. The trade deficit on the other hand is expected to deepen with limited prospects to increase the value of exports in the short term combined with an expected continual increase in the imports aligned primarily to growth in tourism-related activities. Mr Speaker and Honourable Members, overall our economy is on a positive track and with the uncertainty in global trends, a higher level or variability against estimates is expected but projections are conservative. Mr Speaker, in perusing the fiscal strategy report, it is pertinent for this Honourable House to note that Budget 2010-11 was developed within the context of a tightening fiscal environment and of an uncertain economic environment while, at the same time, seeking to meet Government’s policy objectives outlined in the Budget Policy Statement. So from a fiscal perspective Honourable Members, allow me to point to the key features of Budget 2010-11. First, operational revenue is expected to increase by 1.7 per cent to $101.8 million mainly through the additional revenue expected to be collected in higher dividends from State-owned enterprises of $1.1 million. Second, actual taxation revenue is estimated to come in higher than the original estimates by about 3.2 per cent in 2009-10 through one-off receipts in company tax.
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