Download Cook Islands Planning and Budget

Government of the Cook Islands
Workshop on
Medium-term Expenditure Planning for
National Sustainable Development
2-6 November 2015 at Novotel Hotel, Nadi
Presenters: Mr. Siva Gounder (MFEM) and Ms. Mii Nimerota (OPM)
Outline
• Overview; CI Policy, Planning, Performance &
Budgeting framework
• Policy and planning cycles; the link between long-term vision
and medium-term planning
• The National Sustainable Development Plan
• Budget Policy Statement; annual prioritisation of resources
• Government operating expenditure
• Operating Expenditures; Current and medium-term outlook
• The Cook Islands Context; Socio-Economic trends affecting
medium to long-term expenditure
• Challenges
CI Policy, Planning, Performance
& Budgeting Framework
Policy and planning links to legislation (Internal/OPM)
NSDP
(5-10 yr; National Goals;
OPM – Internal & Public
use)
Budget Policy
Statement
(Annual priorities derived from
NSDP – Public Use)
National Budget
(MFEM –Public Use)
Prioritisation of Resources
National Policy
Suite
(10 yr; Wider Suite of Indicators;
OPM – Internal & Public use)
Legislation- Acts &
Regulations
Long/Mid term
Strategies
(5-10yr; Mid term Actions,
investments - Internal)
Policy Outcome
Indicators
(Agency/PSC - Public use)
Final Business Plans
and Appropriations
(PSC/Agency/MFEM - Internal)
Performance Indicators
Output based)
Work plans /
Divisional plans
(Agency – Internal & Public Use)
(Agency - Internal)
Performance Management (Internal/PSC)
Policy and Business Plan cycles for monitoring and evaluation
REVIEW
POLICY
APPROVE
POLICY
LEARN
EVALUATE
POLICY
YR4
POLICY
IMPLEMENTATION
CYCLE
(4 YEARS)
LEARN
STRATEGIC
PLAN
(4YEARS
YR1
LEARN
YR3
LEARN
YR2
REPORT
ON YR 1
BUSINESSPLAN
YEAR 1
BUSINESS
PLANS
IMPLEMENTATION
1 YEAR
The National Sustainable
Development Plan 2016+
Te Kaveinga
Nui National
Vision 2020
NSDP 20072010
NSDP 20112015
NSDP 20162020
National
Outcomes
2020
The National Sustainable
Development Plan 2016+
Te Kaveinga
Nui National
Vision 2020
NSDP 20072010
NSDP 20112015
NSDP 20162020
National
Outcomes
2020
•Identifies our medium term goals and objectives;
•Presents national and sector strategies for achieving these
goals and objectives;
•Proposes outcome indicators to measure performance over
the medium term;
•Identifies actions for the medium term; and
•Presents a framework for its implementation, monitoring and
evaluation.
Budget Policy Statement
• The Budget Policy Statement (BPS) 2015/16 was published in
February 2015.
• Broad strategic priorities are to:
• * celebrate our people;
• * celebrate our environment;
• * celebrate our economy and improve economic productivity;
and
• * put in place the means to progress our priorities.
In determining these priorities, implicit in our efforts is the
recognition of the integration of the social and cultural,
economic and environmental pillars of sustainable
development.
Budget Policy Statement continued...
Summary of New Initiatives
GFS Contribution Increase
Technical Adjustments
Celebrate Our Environment
Improve Economic Productivity
Improve Service Delivery to the Community
Improving International Obligations
Celebrating our people
Improving Public Sector Service Productivity
Official Development Assistance
Total Expenditure
2015/16 2016/17 2017/18 2018/19 Total
44
21
295
3,753
1,957
147
-432
387
8,910
15,082
44
-45
220
1,055
1,566
62
5
-523
9,275
11,659
44
-183
320
675
1,568
62
5
-513
9,270
11,248
44 176
-183 -390
220 1,055
675 6,158
1,570 6,661
62 333
5 -417
-513 -1,162
- 27,455
1,880 39,869
Overview
• The Cook Islands is a small open economy largely dependent
on tourism, its natural comparative advantage.
• The economic dependency on tourism has benefitted the
Cook Islands greatly. Despite this success, the lack of economic
diversity or economies of scale make any progress fragile and
reversible.
• Labour market constraints across various areas of the
economy also present major limitations on economic growth.
• Increasingly, large capital works have also become a driver for
economic growth which is evident in for 2015/16.
• As a result of the lack of economic diversity, the reliance on
imports to support local consumption makes Cook Islands
extremely vulnerable to external price shocks.
Overview continued...
• Tax Revenue to GDP – 27.6% in 2015/16 (The benchmark
agreed to work within is to maintain collections to within 25%
of GDP)
• Underlying Net Operating Balance is anticipated that the
Government has an underlying operating surplus of $1.5
million for 2015/16.
• Net Servicing to Revenue- benchmark 5% of Revenue. 3.84%
for 2015/16 , however the ratio of debt servicing over short to
medium term is breached in 2017/18. Loan Repayment
Fund(LRF)
• Net Debt to GDP- 24.7% for 2015/16. The agreed benchmark
is to maintain net debt within 35% of GDP
Cook Islands Government Operating
Expenditures
• Operating expenditure refers to expenditure
on the delivery of government’s core outputs
of the public service.
• Operating expenditure is predominately made
up on
* Compensation of Employees
* Use of Goods and Services
* Consumption of Fixed Capital
* Debt servicing Payments
Total Operating Expenditure 2015/16
Current and Future Spending
Compensation of employees
Use of goods and services
Depreciation
Interest
Subsidies
Grants
Social benefits
Other expense
Less ODA Current
Underlying Expenditure
2014/15
Budget
48,704
42,242
9,785
2,137
15,026
0
17,501
5,323
140,722
17,527
123,195
2015/16
Budget
50,183
48,964
9,775
2,087
14,926
155
17,887
5,457
149,437
21,481
127,956
2016/17
Estimates
48,975
46,594
11,768
1,962
14,926
5
17,746
5,457
147,434
17,899
129,535
2017/18
Projected
48,851
45,680
11,784
1,686
14,926
5
17,748
5,457
146,139
18,222
127,917
2018/19
Projected
48,685
33,249
11,771
2,085
15,026
0
17,570
5,267
133,654
3,817
129,837
Economic and Social Trends
affecting Expenditure
• Outward Migration is a major factor affecting
government expenditure in the Cook Islands.
• Labour market constraints across various areas
of the economy.
• Aging population (increase old age pension
payments)
• Airline Subsidy
Natural Disasters
• Cook Islands, like all other countries in the
region are affected by natural disasters.
•
•
•
•
•
Contingency funds
National Disaster Trust Fund (ODA)
Disaster Management Insurance
Emergency Response Trust Fund
Reserve Trust Fund
Official Development Assistance
(ODA)
• The Cook Islands Official Development Assistance
(ODA) Policy 2011 adopts an approach where the
national Budget includes all known sources of
development finance planned for use in the Cook
Islands.
• The New Zealand/Australia forward aid
programme represents 50% of ODA
• ODA Budget for 2015/16 $49,115 million
Cook Islands Debt
• Total gross debt by the Cook Islands is estimated to reach
NZ$109.1 million as at 30 June 2016.
• Loans are composed of USD,EUR,RMB and SDR
• Lenders are ABD, Export Import Bank of China and
Government of France
• Unfavourable changes in exchange rates
• Loan Reserve Fund(LRF)..Loan Repayment Fund Act 2014
• Net Debt to GDP- 24.7% for 2015/16. The agreed benchmark
is to maintain net debt within 35% of GDP
Challenges
• Execution of medium-term budgeting and
planning requires improvement
• Impact of fluctuations in global economy and
capital, currency and commodity markets
• Political Will
Meitaki Maata!
Vinaka!
Mr. Siva Gounder
Crown Accounts Manager
Treasury Management Division
Ministry of Finance & Economic Management
E: [email protected]
Ms. Mii Nimerota
Senior Policy & Planning Advisor
Central Policy & Planning Office
Office of the Prime Minister
E: [email protected]