Editor's Picks



Monday 27 June 2016 | Published in Letters to the Editor


Political antics detract from budget


While social media is rampant swapping notes on the antics at Parliament this week, the budget print run is complete.

The three volumes of budget books are available online. No-one is querying the significance or otherwise of this budget to the Cook Islands’ growth.

Under the MFEM Act, Cabinet returns to MFEM a fiscally responsible budget aligned with the guiding principles of managing government debt, maintaining levels of Crown net worth, and pursuing policies that are consistent with a reasonable degree of predictability, or in another way, managing the Crown purse with integrity. MFEM then places this budget before Parliament for final scrutiny.

The Budget Policy statement for FY6/17 tells us that our economy is small and open and dependent on tourism, ‘in which it has a natural comparative advantage’ (BPS 16/17).

What is a natural comparative advantage? An example: a country that produces something, is said to have a comparative advantage if what it produces is produced at a lower cost than any other country. So I’m assuming the “natural” in front of the term “comparative advantage” refers to our natural geophysical and human beauty: our land, sea, air, and human environment.

I’ve been given over a year to prove to the University of the South Pacific that the economic models our country runs off are outdated and disrespectful of the wealth of natural, physical and infrastructural assets we own. Studying the Budget Policy statement and the budget books helps this case.

This financial year’s Budget is bold. It assumes the natural comparative advantage of our ecological and environmental assets.

Yet there is no effort to factor this value into the baseline formula for national and island-by-island budget allocations.

It is Rarotonga-centric. Most of the spending will be on boosting the tourist numbers and spend that add to the country’s wealth. Yet there is no effort to value the cost of tourist numbers and the spend on maintain the environment. Example: we see non-government groups waging campaigns against the Styrofoam containers that will clog up landfills and poison our land. But like many well-intentioned environmental concerns, when the money runs out, the TV ads and campaign will become silent.

The Budget has the right language, but misses the mark. On page 144 (Book 2), a breakdown of the Pa Enua funding model outlines the cautious allocation of resources while devaluing the existence of each Pa Enua and the span of ocean and ecological resources they harbour and protect to ensure the “natural comparative advantage.” Not including this important ecological truth in the Pa Enua formula shades our economic and tourism horizons.

Climate science confirms that our atolls will disappear first as carbon dioxide concentrations in the air accelerate the pace of global warming and continue to influence the rate of sea level rise.

While our higher southern islands will survive a bit longer through a variety of adaptation measures, unpredictable weather patterns and temperature will continue to cause havoc. A consequence of investing in our natural comparative advantage will be our ability to claim our Exclusive Economic Zone (EEZ) as ours when the last atoll is washed over. Will there still be almost two million square kilometres of ocean surrounding the Cook Islands?

I searched the 3rd National Sustainable Plan for some hints on this expectation. I commend the effort to produce this targeted document and the admission that the goals interplay with each other.

Goals 12 (managing our ocean), 13 (strengthening our resilience) and 15 (sustaining our population in the development of our nation), are immediate concerns for all our islands. Some of our planners await the 2016 Census results with concern to check whether the past outmigration trends, from the Pa Enua especially, have continued. Although difficult to link to climate change, in some of our neighbouring Pacific Island countries, migrating to higher places is an adaptation mechanism when all else (including respectable resource allocations from the budget), fails.

But no-one is paying attention to the Budget these days. The fiasco involving the boys and girls at parliament has taken front stage as the people enjoy the cartoon spreads and stoke the evening gasbag sessions with why the Members of the House might have done what they did: Were they driven by greed? Were they hungry for power? or were they trying to avoid court cases?

These appear to be the more important development issues being discussed in our nation!


Kia Mau!