Financial Secretary Office News

Financial Secretary Office News

Shipping Subsidy 2019

Two subsidised voyages to the Northern Group to support the Palmerston House opening

The Ministry of Finance and Economic Management (MFEM) today announced that the Cook Islands Government has agreed to provide Taio Shipping with a subsidy for two voyages from Rarotonga to the Northern Group to coincide with the opening of the Palmerston House in Rarotonga in early July 2019. This subsidy follows in the footsteps of the Northern Group pilot shipping subsidy project implemented by MFEM in 2018 with vessels operated by Cook Islands Towage and Taio Shipping. 

Palmerston House is owned and operated by the Palmerston Charitable Trust and has been built with funds mobilised by Palmerston families on Rarotonga and in New Zealand and Australia. The House will provide a central base and much needed accommodation for Palmerston families when visiting Rarotonga. Palmerston House is scheduled to be officially opened on 8 July 2019.

“To help celebrate this important event, the Government is delighted to be able to assist the Northern Group communities to transport their contributions such as fish, uto and pare rito”, Financial Secretary Garth Henderson, said.
The first voyage, on the MV Lady Moana, to Penhryn, Rakahanga and Manihiki is expected to leave Avatiu Harbour on Friday 21 June 2019. The second, on the MV Grinna, to Palmerston, Nassau and Pukapuka is expected to depart on Saturday, 22 June 2019. Both vessels are expected to be back in Rarotonga in time for the opening ceremony.

The subsidy funding, equivalent to 60 percent of expected operating expenditure for each voyage, has been made available from the 2018/19 Budget Inter-island Shipping Subsidy appropriation administered by MFEM. The overall objective of the subsidy program is to improve the regularity, reliability and affordability of shipping services to the Northern Pa Enua. 

The Government intends to extend the shipping subsidy in the 2019/20 financial year, and has appropriated $500,000 in the 2019/20 Budget for this purpose.

Future inter-island shipping plans

The Government’s longer-term goal is to provide a regular, reliable, modern, efficient and safe interisland shipping service. Recognising that a shipping subsidy is only suitable as a temporary measure that will not in itself achieve this goal, the Government flagged two additional measures in the 2019/20 Budget. 

Landing craft cargo vessel 
The first is $2.5 million of Cook Islands Government funding for the procurement of a medium-sized landing craft vessel, with crane facilities, designed to transport heavy equipment and construction materials. The landing craft will support the implementation of the Government’s planned Pa Enua infrastructure projects over the 2019/20 estimates and forward budget period. 
The procurement of the landing craft vessel, and arrangements for its operation, will be subject to the standard Government Procurement Policy. This sets out a fair, transparent playing field for public procurement where everyone has a fair chance of bidding for public goods and services and provides competitive pricing to ensure value for money for the tax payer dollar. 

Purpose-built passenger/ general cargo vessel
The Government has requested support from the Government of Japan in developing a project to deliver a purpose-built shipping vessel that will provide passenger and general cargo inter-island services.
The Government anticipates that this will be a two-stage project. Stage 1 will deliver a comprehensive business case to inform a Government decision on proceeding to Stage 2. The second stage would involve funding arrangements, detailed design, construction and operation of the vessel. While discussions are at an early point, $250,000 of ODA funding has been allocated for 2019/20 in anticipation of Stage 1 technical assistance from the Government of Japan.

19 June 2019
ENDS


Deposit Instrument of Accession with World Customs Organisation

On Monday 13th May 2019, at the Oceania Customs Organisation annual conference held in Saipan, Commonwealth Northern Mariana Islands CNMI, the Cook Islands became the second non-World Customs Organisation member, and the 118th country to accede to the Revised Kyoto Convention.

The Cook Islands was represented by Associate Minister of Finance, the Honourable Tingika Elikana who deposited the Instrument of Accession on behalf of the Cook Islands Government.

WCO

Associate Minister of Finance Honourable Tingika Elikana deposits the instrument of Accession
with World Customs Organisation Deputy Secretary General Mr Ricardo Trevino

The Revised Kyoto Convention is the global blueprint for the simplification, harmonization and modernization of customs procedures. The original Convention was concluded in Kyoto in 1973 and entered into force in September 1974. It was reviewed over a period of years and amended in 1999.

In June 1999, the Council of the World Customs Organisation approved the Revised International Convention on the Simplification and Harmonization of Customs Procedures Revised Kyoto Convention. The Revised Kyoto Convention has been developed in the face of mounting pressure from the international trading community to minimize the level of customs intervention in cargo movement and to maximize the level of trade facilitation. The Revised Kyoto Convention came into force on Feb 3, 2006.

The Revised Kyoto Convention has the following objectives:

  • Eliminating divergence between the customs procedures and practices of Contracting Parties that can hamper international trade and other international exchanges;
  • Meeting the needs of international trade and Customs for facilitation, simplification and harmonization of customs procedures and practices;
  • Ensuring appropriate standards of Customs control; and
  • Enabling Customs organizations to respond to major changes in business and administrative methods and techniques.

The Revised Kyoto Convention incorporates important concepts of contemporary compliance management. These include the application of new technology, the implementation of new philosophies on customs control and the willingness of private sector partners to engage with customs authorities in mutually beneficial alliances. Central to the new governing principles of the Revised Kyoto Convention is a required commitment by customs administrations to provide transparency and predictability for all those involved in aspects of international trade. In addition, the customs administrations are required to:

  • Commit to adopt the use of risk management techniques;
  • Co-operate with other relevant authorities and trade communities;
  • Maximize the use of information technology; and
  • Implement appropriate international standards.

The revised Convention benefits many people. Traders will benefit from improved facilitation and reduced costs. Shippers and transport operators will benefit from uniform Customs control and quicker movement of cargo and people. Government will benefit from more effective controls that increase border security and reduce revenue leakage. In summary, Revised Kyoto Convention will provide international commerce with the predictability and efficiency that modern trade requires.

[END]
7 June 2019

Call for submissions on the draft Telecommunications Market Competition Policy 2019

The Ministry of Finance and Economic Management (MFEM) today released the draft Cook Islands Telecommunications Market Competition Policy 2019 for public consultation.

The Cook Islands has been serviced by a single telecommunications operator, partly-owned by the Government, under a legislated monopoly since 1989, with limited independent oversight. While this approach has served the Cook Islands well to date, the telecommunications landscape, both here and abroad, has changed considerably since the Telecommunications Act 1989 came into force.

Innovation and development in the telecommunications industry in the form of new services – such as the ‘app’ economy – are posing new challenges and opportunities for established regulation. The local infrastructure landscape is also changing. The Manatua Cable, which is expected to start service in mid-2020, will provide fast, reliable and affordable internet services. In addition, experience elsewhere in the world has demonstrated the benefits of competition in the telecommunications industry: for consumers through access to new services and lower service prices, and for business through new investment opportunities.

“The Government is committed to opening up the telecommunications market to competition to secure these benefits, and at the same time adapting the regulatory framework so that it is fit for purpose in this 21st Century environment”, Acting Financial Secretary Lavinia Tama, said.

The Government’s proposals in this regard are set out in the draft policy, on which the Government is seeking industry and community feedback.

“The closing date for submissions is Friday 14 June 2019. Written submissions received by the closing date will be considered in the development of the final policy. The Government is also planning to hold a number of public forums at dates and venues to be announced. This will provide another opportunity for comment”, said Ms Tama.

The draft policy is available on MFEM’s website at http://www.mfem.gov.ck/economics or can be obtained by either contacting the MFEM Economics Unit on 29511 or via email at mfem.economics@cookislands.gov.ck.
Submissions can be sent to MFEM by post at PO Box 120, Avarua, via e-mail at mfem.economics@cookislands.gov.ck, or lodged in person at Level 1, MFEM Building, Avarua.

ENDS
8 May 2019