Cook Islands Government Quarterly Financial Reports - September 2019

The Cook Islands Government (CIG) preliminary financial outcome for September 2019 quarter is now available.

Net Operating Balance and Fiscal Balance of General Government

September 2019 Quarter

Budget

(‘000)

Actual

(‘000)

Variance

(‘000)

Operating Revenue $49,381 $49,133 -$248
Operating Expenditure $46,721 $41,604 $5,117
Net Operating Balance $2,660 $7,529 $4,869
       
Add Depreciation $3,435 $2,482 $953
Less Capital Expenditure -$6,445 -$4,464 -$1,981
Fiscal Balance -$350 $5,547 $5,897

The net operating balance for the period ended 30 September 2019 was a surplus of $7.53 million, which represents $4.87 million higher compared to the surplus estimated for the quarter.

Fiscal Balance

The overall fiscal balance[1] however was $5.55 million and represents $5.90 million higher than the fiscal balance estimated for the quarter.

In addition to underspending in operating expenditure, spending on capital projects were also below budget estimates by $1.98 million in the first quarter, mainly due to scheduling of major projects especially projects administered by Cook Islands Investment Corporation (CIIC). These capital projects are forecasted to be implemented in the second half of the financial year.

Official Development Assistance

Official Development Assistance (ODA) was appropriated at the total value of $65.22 million in the 2019/20 Appropriation. This value includes the Core Sector Support Grant Funding Arrangement with New Zealand for Education, Health and Tourism.

The first quarter for the financial year 2019/20 reported a total spend of $2.21 million. The low spending for ODA in the first quarter of the financial year was a result of delays in ongoing negotiations on priorities and the design of individual grant funding agreements. Spending is expected to pick up as we progress towards the second half of the financial year.

Financial Position

Overall cash balance was $176.19 million and includes funds that are committed of $140.51 million. Committed funds relates to funds set aside for specific purposes which includes the Reserve Trust Fund, the Loan Repayment Fund (LRF), Stabilisation Account Disaster Response Trust and other Trust accounts.

Total Gross Debt was $96.33 million at the end of 30 September 2019. This represented actual disbursed loans only adjusted for debt service repayments. There are other loans that government has committed to but are yet to be drawn of $18.99 million. The undisbursed loans are made up of $13.95 million for the Disaster Recovery Management (DRM) loan, which is only triggered and drawn down in the event of a catastrophe, and $5.04 million for the Undersea Broadband Cable loan which is expected to be drawn in early 2020/21.

Net Debt was reported at $47.47 million at the end of the reporting period. Net debt adjusts the Gross Debt for the effect of the LRF held against those loans and the loans held on behalf of SOE’s.

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