ADVICE ON THE BUDGET BID PROPOSAL AS DEVELOPED BY THE PACIFIC ECONOMIC DEVELOPMENT AGENCY You have requested that
a budget bid proposal be drawn up that seeks to appropriate funds to support a list of projects developed by the private company, Pacific Economic Development Agency (Pacific EDA Ltd). This paper provides information and advice on the proposal, with background information, issues, opportunities, benefits and risks associated with the project. Date Briefing No 25 March 2010 BO64 2009/10 Priority Deadline URGENT 25 March 2010
Recommended Actions Minister of Pacific Island Affairs It is recommended that you: a) Note that there is an opportunity for further funding for economic development projects under the Ministry s Auckland Strategic Plan. b) Note that a budget bid for the 2010/2011 period is currently being prepared within agreed timeframes with the Treasury. c) Agree potential benefits for Pacific communities from additional resources to support further economic development opportunities. d) Agree that there risks and implications for Ministers and government in dealing with the entity known as Pacific Economic Development(Pacific EDA Ltd) e) Agree that to minimise risks, a purchase agreement that sets out obligations will be negotiated between the Ministry and Pacific EDA Ltd, and f) Agree that the Ministry must play a central role in the management of funds, monitoring and reporting on the progress made in the implementation of the projects.
Minister s Office Comments
25 March 2010 Hon Georgina te Heuheu QSO Minister of Pacific Island Affairs
ADVICE ON THE BUDGET BID PROPOSAL AS DEVELOPED BY THE PACIFIC ECONOMIC DEVELOPMENT AGENCY Purpose 1. We understand that you have requested that a budget bid proposal be drawn up that seeks to appropriate funds to the set up of a taskforce and support a list of five projects developed by the Pacific Economic Development Agency (Pacific EDA Ltd). This paper provides advice on all these issues. Background 2. The Minister of Finance has allocated $1.2 million per year for 4 years for the implementation of a set of proposed projects from the Pacific EDA Ltd. This is a much needed opportunity to further develop opportunities for Pacific people with a focus on activities in Auckland. 3. Pacific EDA Ltd s core business is the provision of Independent analysis of policies and programmes that affect the quality of life for Pacific peoples to highlight opportunities as well as obstacles facing Pacific people. 4. The Ministry of Pacific Island Affairs (the Ministry) currently funds and monitors the activities of the Pacific Business Trust as the primary vehicle for economic and business development for and by Pacific New Zealanders. Some of the projects proposed by Pacific EDA Ltd could potentially duplicate activities already provided by the PBT and other agencies, such as the Pacific Co-operation Foundation. 5. Pacific EDA Ltd does not have a good record of working collaboratively with other agencies and the Ministry will work with them to nurture effective relationships to successful outcomes for the proposed projects. The Proposed Pacific Economic Taskforce 6. In addition to specific projects, Pacific EDA Ltd has also proposed the establishment of a Pacific Economic Taskforce for NZ as part of the suite of projects presented to the Minister of Finance. The purpose of the Taskforce is to monitor trends in economic and living conditions, promote policy development and advise Ministers on development opportunities for Pacific peoples in NZ. Most of these activities are currently provided by the Ministry and related agencies such as the Department of Labour. 2
7. The Pacific EDA Ltd has proposed a list of potential members of the Taskforce and a budget proposal of $100,000. All but one of the proposed members are Samoan with one female member. You are aware that the Ministry has been working with you to establish a Ministerial Taskforce for a similar purpose. There is little added value by having two separate tasksforces focusing on economic development. Proposed Projects 8. The following are initiatives that have been put forward by Pacific EDA for consideration in this year s budget round. These are outlined below.
Pacific Skilled Employment Scheme This is an upskilling initiative. It aims to improve the skill levels of Pacific people so as to expand their employment options and incomes. It is proposed a budget for this intiative is approximately $715,000 per annum reduced from the original proposal of $1 million dollars. The Leadership Plantation The intiative is a leadership programme emphasising practical learning and application. This is targeted at mature potential Pacific leaders between the ages of 19-40 years. This will be a year long programme. The proposed budget for this initiative is $65,000 per annum. Buy Pacific Made This intiative to promote people and their ideas in a Pacific market. This consist of an expo in Auckland, anticipated for late 2010. The proposed budget for this intiative is $65,000 per annum. Village Framework Ethnic Community Framework The village development frameworks focus on the social, economic and cultural challenge. The proposed budget for this initiative is $60,000 per annum Performing Arts and Cultural Pathways Pacific communities have strong connection with their culture, either in a traditional or emerging contemporary style. This intiative seeks $85,000 per annum.
Ministry Comment 14. These projects over-lap with many programmes that are currently being run by through the PBT and other local and central government programmes. For example, the Pacific Skilled Employment Scheme aims to upskill pacific workers. The Department Department of Labour and the Ministry have projects that are addressing this now. Buy Pacific Made overlaps with Pacific Cooperation Fund s
Pacific Brand project and Leadership Plantation overlaps with PBT s Plantation Challenge . 15. The Ministry will work with Pacific EDA and other relevant organisations to ensure that activities are not duplicated and projects are complementary. Detailed work and negotiations need to be completed before signing of the Purchase Agreement between the Ministry and Pacific EDA Ltd. There will be the significant additional work needed before a final agreement will be reached. Benefits, Risks and Implications 16. The Minister of Finance has signalled the preferred provider for the delivery of these initiatives to be Pacific EDA Ltd. A provider that registered as a limited liability company in 2007. 17. Potential benefits from this proposal enables the availability of additional resources to address the economic development needs of Pacific people and provides an opportunity for Pacific EDA Ltd to work collaboratively with other providers working for Pacific in addressing economic development needs. 18. There are however, a number of significant risks which are detailed below. These risks include:
y y y y y
Pacific EDA Ltd has only been in operation since 2007 and it has not delivered on any projects of note, except for the Auckland Pacific Economic and Social Transformation Agenda Conference 2008 and the formation of the Auckland Pacific Forum; They are untested and unproven in the capability to deliver on projects of this scale as such there is a significant risk of non-delivery; The majority of the members of the Pacific EDA Ltd, are of Samoan ethnicity, and may not be inclusive of other Pacific ethnicities; There are potential political ramifications for government to be seen to channel funds to an agency with no track record; Past experience of local and central government agencies indicates that Pacific EDA Ltd do not work well with other groups; Pacific EDA Ltd is closely linked with the Auckland Pacific Forum, a body that has been set up in anticipation to advise the unitary council. The Auckland Pacific Forum does not have full support and is not rep resentative of the Pacific community. Pacific EDA Ltd will use this partnership with central government to legitimise the Auckland Pacific Forum. The inability to tender for an appropriate provider or range of providers capable of delivering these initiatives may be inconsistent with government procurement procedures.
Mitigation of risk through negotiation of Purchase Agreement 19. The Ministry will ensure that a purchase agreement will be negotiated with Pacific EDA Ltd and will require significant additional work to minimise duplication. The purchase agreement will set out duties and obligations on each party with an appropriate exit clause. 20. It is essential that the Ministry retain oversight of these proposals to ensure administration of funds, monitoring functions are performed and expectations are clear.
Recommendations 21. It is recommended that you: a) Note that there is an opportunity for further funding for economic development projects under the Ministry s Auckland Strategic Plan.
b) Note that a budget bid for the 2010/2011 period is currently being prepared within agreed timeframes with the Treasury.
c) Agree potential benefits for Pacific communities from additional resources to support further economic development opportunities.
d) Agree that there risks and implications for Ministers and government in dealing with the entity known as Pacific Economic Development(Pacific EDA Ltd)
e) Agree that to minimise risks, a purchase agreement that sets out obligations will be negotiated between the Ministry and Pacific EDA Ltd, and
f) Agree that the Ministry must play a central role in the management of funds, monitoring and reporting on the progress made in the implementation of the projects.