Tokelau is dependent on New Zealand assistance, which makes up some 90 per cent of its budget. Tokelau is working towards generating greater income from commercial activities especially through development of its fisheries sector as well as smaller income streams such as stamps and coins. In future, Tokelau will access revenue from the Tokelau International Trust Fund, established with New Zealand in 2004.
New Zealand’s development support for Tokelau for 2011/12 is NZ$17million.
Support to Tokelau is provided in accordance with New Zealand's constitutional obligations outlined in the 2003 Joint Statement of the Principles of Partnership between New Zealand and Tokelau (Principles of Partnership).
The New Zealand and Tokelau governments have signed a Joint Commitment for Development (PDF 82KB) draws from the Tokelau National Strategic Plan (2010-15) and establishes a shared vision for achieving long-term outcomes.
Tokelau is receiving an advance in funding from New Zealand to address its almost 100% total reliance on fossil fuels. Together, Tokelau and New Zealand are initiating a solar power project which is expected to make Tokelau a leader in renewable energy solutions in the Pacific. This project is being carried out by New Zealand company, PowerSmart. By the end of 2012, the three atolls of Tokelau will be using almost entirely renewable sources of energy to generate electricity.
Since July 2003, New Zealand has provided the Government of Tokelau with funding to manage and supplement its government recurrent budget and resources, including developing and maintaining infrastructure, providing education and health services and capacity, and undertaking economic development activities.
Tokelau is reliant on shipping to connect with the wider world. New Zealand and Tokelau are working to ensure reliable, adequate and efficient transportation. While New Zealand is supporting Tokelau to build a new passenger ship, charter services are in place to provide continuity of services in the interim. Work on improvements in infrastructure between ship to shore are also ensuring maritime safety.
With support from New Zealand, Tokelau has been building a new hospital on Nukunonu, and new schools on Fakaofo and Atafu to replace the existing aging infrastructure. New Zealand is also providing technical assistance to support numeracy and literacy development in schools.