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Surplus for resilience: Brown

Wednesday April 10, 2019 Written by Published in Politics

Finance minister Mark Brown says the surplus government is making on a quarterly and annual basis is used for strengthening the financial resilience of the country.

 

Brown was responding to a question from Matavera MP Vaitoti Tupa, who in Parliament on Monday asked whether the recent surplus could be used to fund extra costs, if any, associated with the Te Mato Vai project.

The government posted a surplus of $23.63 million in the second quarter of the 2018/19 financial year ending December 31, 2018.

In the recently released Cook Islands quarterly financial report, the government said it recorded $12.82 million more in surplus than what was estimated for that quarter.

Brown said the estimated surplus produced from the Half Year Fiscal Update by the Ministry of Finance was just an estimate figure.

He said they expected that figure to be finalised at the end of the financial year.

“I don’t expect that figure to change much and this is due to the very good economic policies of this government that led to the surplus situation,” Brown said.

“Secondly, the government has no intention to use this surplus to fund activities for Te Mato Vai. Appropriation for Te Mato Vai has already been done and work is already on its way to completion this year.

“The purpose of any surplus that we raise at the end of this financial year will be put aside to help build our fiscal resilience strategy and also utilise in next year’s Budget that will be tabled in June.”

The government’s latest surplus is mainly due to a high increase in “other revenue” collection including from fishing licenses and underspending of capital expenditure as well as a hefty saving from the Crown-operating expenditure.

The report stated capital expenditure for the period was below expectations by $4.91 million due mainly to timing of spending related to a number of projects.

The government also saved $8.88 million from the Crown-operating expenditure for the period, which totaled $74.61 million.

The total Crown revenue collected for the December quarter was $98.24 million, above Budget estimate by $3.94 million.

The government recorded $78.93 million from taxation alone, an increase of $414,000 than the estimated amount.

The variance reflected a high collection of other revenue for the period by $3.01 million, the report said.

This is mainly due to revenue collected from fishing licenses which was above Budget estimates by $2.47 million.

The report said this was due to end of the calendar year rush to purchase bilateral purse seine days following the high presence of skip jack tuna in the Cook Islands EEZ in November and December last year.

The country also gained $650,000 on foreign exchange rates activities.

The consolidated group – state owned enterprises – returned a net operating surplus of $4.93 million, $2.01 million above Budget estimates for the December quarter.