Yesterday, a press conference where the costings were to be released was cancelled after one of the political parties chose not to have their MFEM-prepared analysis disclosed to the public.
As a result, MFEM said in a media release issued yesterday they will not publish the costings, as they, “... are now with the parties and they may publish them if they so desire”.
Neves says MFEM offered to cost all policies presented to the electorate to assist parties with their policy formulation and all agreed to be part of the process.
Costings had been completed for the Cook Islands Party, Democratic Party, One Cook Islands Movement and Teina Mackenzie.
“This is the first time such an approach has been taken in the Cook Islands and it is a positive step in the overall management of the nation’s public finances. The parties have interacted with the team in the Ministry in good faith and I am confident the costings that have been provided to the parties reflect the wishes of the political candidates on each initiative in their manifestos.”
He said a Budget process often takes months to finalise, and the estimates at the start of the process are often different from those at the end due to policies being refined as more information comes to light. In contrast, the process for costing the policies for the 2014 election occurred over just two weeks.
“It needs to be acknowledged that all parties to some degree have not had the luxury of time to alter, refine, or reprioritise their policy positions as they would during a full budgetary process.
“The costings which have been provided are the best estimates which can be done with the current data within Government (including MFEM and other agencies) and discussions with party officials. New information may come to light that could affect the estimates, and while much effort has been made to ensure accuracy, they should be seen as an approximate costing.
“In some cases, MFEM has been unable to cost policies simply because there was insufficient information or lack of detail to enable a credible estimate to be made. Nevertheless, we have indicated to the candidate what the nature of the impact on the Budget would be, ie increase or decrease revenue and expenditure.”
“I would like to thank the parties for their approach in working with MFEM,” Neves says, “and I would also like to thank James Webb, Lavinia Tama, Krystina Tatuava and Angelia Williams. They did a good job and hopefully instigated a new process which will be seen as good practice and adhered to in years to come.”
The policy costing exercise follows the publication of the 2014 Pre-Election Economic and Fiscal Update (PEFU) 14 days after the dissolution of Parliament, as required by the MFEM Act, to ensure no “surprises” for an incoming Government.
The PEFU outlined the fiscal and economic conditions and included all savings and expenditure decisions taken by the Government prior to that date. The PEFU outlines that on current assumptions the net underlying operating balance of the Government (that excludes spending on capital and infrastructure) was a deficit of $112,000 in 2013/14 rising to a deficit of $1,468,000 in 2015/16 and then a return to surplus in 2016/17.