Should all Cook Islanders be paid a share of the sea bed mineral revenue?
Considering the enormous wealth the commercialization of our sea bed minerals will generate, should all Cook Islanders be entitled to a share of this revenue, how do we justify this share and how could it be structured and administered?
Although commercialization may not begin until after 2015, we need to consider this issue now, debate it and form some views.
Sea bed minerals advisor at the DPM’s Office, Darryl Thorburn’s personal view is that any debate on the social impact of the wealth created, should include some debate on the concept of a public shareholding involving the resource. If not a public shareholding of the actual resource (government is responsible) but perhaps a public shareholding in the body which invests the income from the resource.
Government has already signaled that it proposes a five per cent levy on the income from our sea bed minerals to fund government programmes especially in health, education and welfare with the remainder being deposited in a Sovereign Fund controlled by special administrators for the future.
In the initial stages it is estimated that yearly revenues could amount to about $300 million. Government’s share at 5% would be $15 million. Over just five years at the rate of $285 million per year, the Sovereign Fund would grow to around $1.5 billion, more if interest is added.
The question still to be decided, is what to do with this asset?
The Cook Islands could become a donor of development funds to other Pacific countries. We could assist other Pacific nations develop industries, jobs and to raise their standard of living. What is clear is that Cook Islander’s standard of living will rise and this may attract other Pacific Islanders to migrate to the Cooks in search of higher paying jobs and a good standard of living.
The social impact of a raised standard of living, free health care, free education, higher super payments, higher salaries, needs to be carefully considered.
Preparing the younger generation to understand and cope with what’s to come will also be important if the next generation is to administer such a valuable asset responsibly.
While a Sovereign Fund will protect the funds for the future, how can Cook Islanders derive some direct benefit from the revenue so they do not become alienated from the wealth generated and feel like they have some ownership for the asset?
A suggestion might be to look at the schemes operated by the various Maori Iwi in New Zealand, where funds or assets derived from Treaty of Waitangi settlements provide for economic assets and businesses which generate revenues for the Iwi. These schemes then return a dividend each year to Iwi members.
Members of an Iwi must apply to be registered which requires evidence of tribal connection to the Iwi.
The size of the dividend paid out depends upon earnings and also how many members are registered.
Can such a scheme work here? What criteria could be applied?
Here are some informal suggestions which have been proposed by members of the public approached by the Herald;
(1)Be 20 years and over (There are about 11,000 in this age group).
(2)Be a Cook Islander (may include a PR).
(3)Be resident in the Cook Islands.
(4)If not a resident Cook Islander, serve a qualifying period of 5years (or 10 years).
With over 100,000 people who can claim Cook Islands descent living overseas, the question is how these people should be treated. Many of these people were born overseas, have few ties to the Cook Islands, do not recognize the Cook Islands as “home.”
Some suggestions are,
(1)Pay any Cook Islander a dividend no matter where they are overseas.
(2) Pay any person of Cook Islands descent living in NZ as like resident Cook Islanders, they are NZ citizens.
(3)Those not born in the Cook Islands may return but the dividend will only be paid to any of their children born in the Cook Islands.
(4)Cook Islanders born overseas may return and become resident and receive free health care, free education, superannuation, but no dividend.
One possible controversial issue is that should the Cook Islands become independent, the obligation to pay persons of Cook Islands descent who are resident overseas, will cease.
Another issue is how to treat those NZ Maori who wish to claim Cook Islands descent. An excluding factor may be if they are already a member of the Iwi scheme or entitled to be a member of an Iwi scheme. (Much like the current super rule that you cannot receive both the NZ pension and the Cook Islands pension).
Note: If the dividends were restricted to Cook Islands residents 20 years of age and over, and the payments began once the Sovereign Fund reached $3 billion, and if the yearly dividend was $1,000, then the cost would be $11 million. -Charles Pitt

Herald Issue 608 21 March
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